Understanding the transition and adoption
Early signs show mixed adoption. While many contracting authorities have moved to the new transparency rules and competition processes, some continue to rely on existing Dynamic Purchasing System (DPS) frameworks, such as Yorkshire Purchasing Organisation (YPO) and Crown Commercial Service (CCS).
These established routes enable them to operate outside the new competition structure for now, delaying full engagement with the updated regulations, as new legislation came into force on 24 February 2025. Any procurement process that was started before this date is allowed to be completed under the old rules.
Across the public sector, organisations are dealing with tighter budgets, rising rebuild costs, and more pressure to deliver value for money. The new thresholds set out in PPN 023, effective from 1 January 2026, are prompting procurement teams to reassess their contract structures, compliance processes and market engagement strategies1.
What we're seeing in practice
Legacy procurements launched before 24 February 2025 will continue under previous rules, which means organisations can operate two regimes in parallel for some time. To be noted, however, that Scotland remains under its own procurement framework, so cross-border institutions should confirm which rules apply to each contract.
Our analysis of the early market response indicates four clear shifts so far:
- Pre-market engagement: This is the key initiative that authorities are recognising and driving forward. It enables procurers to assess the market's capabilities and refine their requirements before the formal tender launch, resulting in better-informed specifications and outcomes.
- Greater use of the competitive flexible procedure (CFP): This is applicable particularly for complex, high-value procurements where early market engagement and negotiation help shape the final structure.
- Stronger focus on measurable, published KPIs: Transparency obligations require clear, reportable outcomes.
- Payment discipline is taking hold: 30-day terms are now becoming a consistent expectation across supply chains.
In insurance procurement, we're seeing clients prepare for these expectations and review KPI frameworks earlier in the process. Where tenders involve layered or alternative risk structures, the CFP is being adopted to allow structured dialogue and clearer alignment on service delivery metrics.
How you can prepare for insurance competitions
For insurance and risk programmes, the Act has direct operational implications:
- Expect more bespoke, multi-stage processes: The CFP enables contracting authorities to design procurement routes tailored to complex insurance placements. Early engagement, negotiation stages and structured clarifications are becoming more common.
- Plan for publishable KPIs from the outset: Contracts exceeding £5 million require contracting authorities to set and report on at least three KPIs annually2. Common metrics include:
- Claims handling and settlement timeliness
- Service level performance
- Premium stability and variation controls
- Apply evaluation rigour: The introduction of an eight-working day standstill period means evaluation summaries must be clear, consistent and defensible.
- Supply chain payment compliance: Brokers and insurers must ensure subcontractors are paid within 30 days, with contracting authorities able to carry out spot checks.
Transparency goes digital
The Act moves procurement to a 'transparency by default' regime. All procurement data is now published through a single Central Digital Platform (CDP), replacing multiple legacy notice sites and supplier registration steps.
Providing suppliers with clearer visibility of upcoming tenders and performance expectations, the Act confers additional transparency requirements on contracting authorities, as follows:
- Compliance: Contracts exceeding £30,000 for general authorities or £12,000 for central government must be publicly reported via a tender notice if there is to be a competitive process run3.
- Accessibility: All procurement opportunities and contract data are published on the CDP, replacing the previous fragmented systems.
- Accountability: New provisions permit faster direct awards in urgent situations, while the transition to Most Advantageous Tender (MAT) encourages a focus on overall value. A new supplier exclusion regime has also been established to address poor performance or misconduct.
Environmental disclosure data and due diligence
Important benchmarks like the Carbon Disclosure Project (CDP) datasets are increasingly being integrated into public procurement. CDP is a well-established framework for environmental disclosure, with over 24,000 companies voluntarily responding in 2024, demonstrating its global authority4.
Procurement teams are leveraging this extensive dataset to systematically gauge the carbon performance and overall sustainability of their suppliers. This practice is a direct result of Environmental, Social and Governance (ESG) reporting, which is now influencing scoring in competitions. This, in turn, is shaping discussions around long-term service standards while informing partnership commitments.
By connecting supplier due diligence with robust, transparent data, contracting authorities can ensure the new MAT principle includes strong environmental accountability.
Get ready for the new regime
Now is a great time for contracting authorities to evaluate their procurement strategies and consider transitioning to processes that reflect the Act's modernised standards and ensure that they're fully compliant. If you're preparing an insurance competition or reviewing your procurement approach under the new Act, we can support you with:
- Mapping and designing a compliant CFP
- Setting measurable, publishable KPIs aligned with claims and service outcomes (e.g., time to resolution, local employment rates and user satisfaction scores)
- Stress-testing evaluation documentation to ensure standstill resilience
- Preparing market engagement and supplier briefing materials
Get in touch with a Gallagher public sector specialist to discuss how you can maximise efficiencies while maintaining control, accountability and value for money.
