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If you run a small construction business, you've probably been stuck in the age-old struggle of getting a foot in the door when it comes to government contracts. The process has historically been slow, opaque, and frustrating - favouring larger firms with the resources to navigate the red tape. But change is finally here. The Procurement Act 2023 is designed to level the playing field, and for businesses in construction, this could be a game-changer.
The Procurement Act came into force (and therefore now takes effect) on 24th Feb 2025 (despite it's misleading label!)
In simple terms, it's a new set of rules to make public sector procurement more transparent, accessible, and fair. The goal? To open up government contracts to a broader range of businesses - including smaller players who have often been shut out due to bureaucracy and excessive requirements.
For construction firms, this means fewer barriers to bidding on public sector projects and a system that genuinely encourages fair competition. If your business has been eyeing contracts for local authority work, infrastructure projects, or school and hospital builds but felt drowned in paperwork, this new Act could be just what you need.
1. More opportunities, less red tape
The new act simplifies the bidding process. Gone are the days of endless forms and confusing qualification criteria. The government wants to make it easier for small businesses to apply for and win contracts. That means less time wrestling with admin and more time actually doing the work that matters.
2. Fairer competition
Large firms won't automatically have the upper hand just because they have bigger legal teams or slicker application processes. The act ensures that smaller businesses aren't overlooked simply because they don't have the same track record of securing government contracts.
3. Faster payments
Cash flow is the lifeblood of any construction business. In the past, one issue with public sector contracts was the slow pace of payments, which made it difficult for smaller firms to manage expenses and keep projects moving. The new act includes measures to improve payment times, meaning you won't be left chasing invoices while trying to keep your business afloat.
4. Local business prioritisation
There's now a stronger emphasis on awarding contracts to businesses that contribute to local economies. This is particularly good news for construction firms looking to secure work in their own communities, rather than losing out to big national firms with little local presence.
Winning a government contract is a massive opportunity, but it also comes with the need for up-front investment - buying materials, hiring staff, and covering operational costs before payments start rolling in. This is where access to finance becomes critical.
With the Procurement Act 2023 making it easier to secure contracts, lenders are likely to view construction businesses more favourably. A confirmed government contract can act as a strong indicator of business stability, making it easier to secure funding. Whether you need a short-term loan to cover initial costs or a longer-term finance plan to scale up your business, having reliable revenue streams from public sector work puts you in a stronger position with lenders.
The Procurement Act 2023 is finally shifting the public sector bidding process to be more accessible and transparent. For construction businesses, it means fewer hurdles, better cash flow, and real opportunities to grow.
If you've previously shied away from bidding on government contracts because it seemed like a lost cause, now's the time to rethink. And if financing your next big project is on your mind, options are available to help you take full advantage of these new opportunities. This could be the moment your business has been waiting for.
