With the Public Procurement Act 2023 coming into force, a new set of rules has changed how public institutions in the UK must approach procurement. But beneath the regulatory surface lies a more fundamental shift: one that redefines the role of procurement itself.

This shift is not about procedures. It’s about priorities. And at TWS Partners, we believe it marks the beginning of a new strategic chapter where buyers must move from price-focused efficiency to holistic value creation.

One of the Act’s most striking elements is the replacement of the “most economically advantageous” tender with the broader “most advantageous” concept. This subtle edit reflects a substantial realignment, namely that non-commercial considerations now take centre stage.

Public buyers are now expected to pay closer attention to aspects such as social impact, sustainability, and inclusivity. Balancing quality and cost is no longer sufficient – there is a trade-off, and the extent of that very trade-off should be communicated to suppliers. The question to be answered now is:

How should we maximise quality and structure these trade-offs in a way that suppliers can respond to – transparently and competitively?

Communicating the Total Value of Ownership

Traditional public sourcing processes account for quality and other non-commercial aspects through various scoring mechanisms.

Does the software product from a prospective supplier include a unique structure for the ease of use of AI? That will grant them 5-10 points, depending on the evaluator. Does this raise the supplier’s costs? Remains to be seen at the end. Was it worth it for the bidder to offer such software? Hard to tell.

Without clear signals, suppliers are left to guess. And in procurement, guesswork means value is left on the negotiation table.

At TWS Partners, we adopt the Total Value of Ownership (TVO) approach. This methodology seamlessly combines non-commercial & commercial elements into comparable, holistic offers from bidders. While this may sound too good to be true, the approach is simple: assigning a monetary evaluation to each one of the qualitative criteria, instead of purely scoring.

Going back to the example of a special software, you can now tell suppliers that this is worth £50,000 annually to you. If they include it in their offer, you will artificially reduce their commercial offer by £50,000 per year, and they now have an advantage relative to other suppliers. They know now that they can increase their offer by at most £50,000 when offering such software, and they no longer have to guess the trade-off.

Asking the Right Questions

Well-intentioned buyers often ask open questions – e.g., “What will your organisation do to deliver social value?” – and receive vague, generic, often AI-generated responses. The evaluation becomes a subjective exercise in text interpretation, rather than a structured comparison of strategic offers.

The way to spare oneself from having to sift through a mountain of half-relevant information is to ask more precise and quantifiable questions. This is easier said than done, but the TVO approach naturally leads to precision. What is social value to an organisation? Is it a fair approach to the market of disenfranchised employees? Is it a quota, and how much is it? Or perhaps paying back to the community via volunteer work, and how much? By adding concrete questions with direct contract commitments that link to value, the procurement specialist can transparently communicate the advantages and disadvantages of offers, without relying on overly subjective point systems.

Rewarding KPI Commitments

All-encompassing and comparable offers from bidders are what we seek to collect – but these are promises, often disincentivised during the tender, or easy to break during the contract. KPI adherence should be part of the competitive offer, not a post-award obligation.

While this is traditionally incentivised with points and questions asking bidders to volunteer KPIs, KPIs and their financial penalties are way easier to be mandated by an organisation and rewarded via £-value advantages. One bidder might be ready to commit to paybacks if more than 5% of delivered parts are flawed every year – another one might be ready to do it if more than 0.5%! This contractual penalty is going to save the organisation money and further keep the supplier incentivised during the contract at the same time. Offering TVO advantages during a sourcing process in exchange for such KPIs shows suppliers precisely how much commitments are valued.

Final Thought

When designed well, this approach fosters competitive tension, aligns offers with actual priorities, and results in quality outcomes – often at a better long-term cost.

The Public Procurement Act is not just a new rulebook. It’s a new playing field. Buyers who recognise this will move beyond compliance and towards a procurement function that acts as a strategic value creator.

And that, in our view, is the real opportunity.

TWS Partners

At TWS Partners, we help public institutions design sourcing processes where the game is fair, transparent, and maximises value-for-money.

If you would like to find out more about the topic, please refer to the links below.👇

Register here for the recording of the full webinar.

Read here if you want to read more about the traditional scoring approach and its pitfalls.

Stay tuned if you want to learn how to unlock even more value – or contact us directly through ukprocurement@tws-partners.com

Kostas Karampelas and Álvaro Catalán Merino