Following the discovery stage and/or Preliminary Market Engagement, users should be sufficiently informed about which route to market would be most suitable to scale an innovative solution. For high-value procurements that are above the threshold, Public Contracts Regulations must be followed. Procurement Act 2023 has simplified processes where there are two procedures to follow. These processes ensure all suppliers are treated equally when bidding for a contract.
This section offers knowledge and guidance for public-sector professionals on:
The Competitive Flexible Procedure (CFP) consolidates all previous multistage procedures into a single framework.
Where a range of multistage procurement processes were previously in place, CFP is designed to encompass all such procedures but with less stringent rules. It shares many similarities with the Innovation Partnership Procurement process (outlined below) and can include the discovery/R&D stage and scaling. CFP therefore allows procurers to design the procurement process with a more innovative and commercially oriented approach.
With the introduction of the Competitive Flexible Procedure, some of the limitations of previous regulated procedures may be addressed through a more adaptable approach.
Notably, CFP permits modifications to tender criteria, enabling contracting authorities to refine award criteria before the final tender submission deadline—provided that any changes are not “substantial” and are clearly outlined in the initial tender notice or associated documents. This ensures that significant alterations, which could materially affect supplier participation, are not allowed.
Overall, this streamlined and flexible bidding process, with fewer complex rules and shorter timelines, can lead to better value for money and faster project delivery.
What are the limitations?
The procurement regime will continue largely as before. Procurers may still utilise the same multistage templates and processes just under CFP
Open Procedure is a one-stage procurement where bidders must respond to all the tender questions. This means that any organisation can respond to the advertised Contract Notice and submit a tender. This can be most appropriate if research has shown that there are relatively few bidders who could meet the solution needs.
What are the limitations?
Frameworks are often the first go-to procedure to consider for public procurers. They offer an established list of compliant suppliers where a mini-competition needs to be carried out — according to the call-off terms of the framework — in order to select and award a supplier.
Commercial frameworks under the Procurement Act 2023 are more open to prospective suppliers. Previously, once the framework was awarded, for the entire term of the framework only those awarded at the beginning can be called off under that framework to participate in a mini-competition. There is now the option for new suppliers to join the framework at least twice during the term when the framework reopens for new entrants to join. Open frameworks will also be permitted to run for up to eight years – twice the length of most traditional framework agreements.
Key features
What are the limitations?
The new Dynamic Markets replaced the lesser-used dynamic purchasing systems (DPSs) that exist in the current regime. This offers an even more flexible way for public sector to procure by creating a list of pre-qualified suppliers who can be readily accessed for future contracts.
The key changes include the ability to add new suppliers to the market at any time, a requirement for a new tender notice for each contract awarded, and the potential to remove suppliers from the market if they become non-compliant.
Key features
What are the limitations?
Concessions form a consideration in a contract and consist of the right to exploit the work, or services, that are the subject of that contract, or that right to exploit together with a payment. Examples of concessions might include car parks built on local authority-owned land, or toll roads and toll bridges.
This procurement is valued by the potential income the economic operator (concession holder) may gain. A significantly higher threshold applies compared to standard services procurement — details of these thresholds can be found here: Procurement Policy Note 11/23 – New Thresholds (HTML) – GOV.UK. The agreement is expected to encourage long-term partnerships and can help deliver income for the authority.
What are the limitations?
The procurement rules governing concession contracts in the UK are contained in the Act, which replaces the repealed Concession Contracts Regulations 2016. Concession contracts are defined at section 8 of the Act.
These multistage procedures were regulated under the Public Contracts Regulations 2015 (PCR 2015). The procedures outlined below will no longer be used under the Procurement Act 2023; therefore, this section has been greyed out. However, they are likely to be referenced referenced within the Competitive Flexible Procedure (CFP), as CFP consolidates these multistage procedures. For example, CFP may incorporate elements of Innovation Partnership Procurement.
This approach supports the development of a specific innovative solution to an existing problem and subsequent purchase of the resulting supplies. It allows for R&D with the partner(s) funded through the contract. IPP is more appropriate for high-value high-risk procurements with substantial investment from the authority and competition from the market
The process includes the trial and scaling, plus the authority can appoint one or several partners. The partnership approach promotes a long-term supplier relationship where innovation can evolve.
Restricted Procedure is a two-stage procurement process where bidders first respond to a Standard Selection Questionnaire (SSQ). This first stage is open to all suppliers to respond. Following which, only the down-selected suppliers are then taken through to the second stage to respond to the more detailed technical and price questions. Only bidders with the best capability and capacity will therefore need to complete that second section and be assessed.
Both are a multistage procurement process that typically follow a restricted procedure with two further stages — the Negotiation or Dialogue and the invitation to submit a Final Offer.
With CPN, the authority can skip straight to award if negotiation is not required following initial bids. This is not possible in a Competitive Dialogue procedure.
Competitive Dialogue is particularly suited for when the requirement is complex or not fully definable, as can happen with innovation. The contracting authority continues the dialogue until it can identify the solution that is capable of meeting its needs. For competitive dialogue, the regulation requires the use of process to be fully justified.
The negotiations and dialogue can help improve the bids and ensure that the enhancements form part of the submission and therefore the contract.
A handy guide to terminology and acronyms commonly used in the innovation procurement process.
Key ingredients for the procurement of innovation, from definition to engagement.
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Share your council’s innovative procurement success story and inspire others across the UK to adopt transformative approaches for their communities!
Procurement can be a key driver of innovation, and at IPEC, we are developing the tools to harness this innovation. To do this, we need to understand what procurement is. It’s not just a process. Procurement is an enabler that gives suppliers the opportunity to work together more efficiently. It gives organisations the ability to deliver outcomes needed in their organisation.
The launch of the Procurement Act earlier this year gives us an opportunity to rethink how we approach procurement and adopt a more entrepreneurial approach to our work. One aspect of this is strategic market engagement, which is essentially an organisation selling itself as a client to the supply market.
Good procurement, particularly in an innovation space, is collaborative. But how can procurement professionals collaborate more effectively with their colleagues and suppliers to achieve those better outcomes, while also minimising organisational risk throughout the procurement journey? Fundamentally, this is achieved with transparency and openness.
There is a massive opportunity, both at a local and national level, to use procurement as a strategic lever. And that’s why we created the Procurement Dojo. This is a tool that was created as a safe and confidential space for local authorities to openly discuss and learn from procurement experiences. This will allow us to nurture and increase the volume of procurement of innovation in public sector.
The Dojo supports this approach, while helping implement change across the public sector. It develops procurement skills and increases confidence by recognising that procuring innovation is a nuanced, bespoke process based on a buyer’s needs.
When we have conducted a successful innovation procurement, this is shared more widely within the local authority or wider local authorities and government to show the art of the possible and further instil confidence in the procurement process.
The most common barriers to procuring innovation that are not related to the procurement team’s skills and confidence in buying more innovative products and services are cultural and governance barriers. For example, not allowing sufficient lead time to learn from pre-market engagement; not appreciating how an organisation can remain fully compliant whilst engaging in informal and ‘without prejudice’ dialogue with suppliers; legal teams that require overly prescriptive, risk avoidant, or onerous contractual terms that are not aligned with delivering innovation and a partnership approach.
This is why we developed our Preliminary Market Engagement (PME) Guide. The guide ensures that PME is not merely a tick-box exercise, but gives a chance to assess the state of the market and the alternatives available. Public bodies often go out to the procurement market asking for something that doesn’t exist or use terms and conditions that don’t work in the market. This means they aren’t getting value for money and aren’t fully understanding the nature of the procurement they need.
Given the increasingly uncertain world we are living in, where there are questions about the security and reliability of suppliers from not-so-friendly states, the PME also includes market research to develop an understanding of who is interested in the procurement opportunity and who the global ultimate parent of the company may be. For sensitive procurements that underpin National Security, consultation with security teams is imperative. The new Act also has a Procurement Review Unit which is intended to monitor compliance with the Act.
Open and dynamic marketplaces offer a catalogue of the most agile, innovative, and latest offerings. Traditional frameworks offer more carefully vetted suppliers with substantial and proven capability; however, they don’t necessarily offer the most innovative or cost-effective solutions.
At IPEC, we’ve also developed the Procurement Innovation Playbook to help public bodies with market engagement while minimising risk during the procurement process and giving public bodies the tools and confidence to champion innovation in procurement.
IPEC has built a network of more than 3,000 pioneers and practitioners who share learning and experiences, upskill service managers and decision makers from 50 local and combined authorities across the UK through direct engagements and many more through webinars, podcasts, publications and events. Changing ingrained organisational practices takes time. At IPEC, we continue to invest in providing practical upskilling opportunities for everyone involved in procurement, to help encourage this change and make procurement truly innovative.
Qflow is a cutting-edge software solution that leverages machine learning to help developers and construction teams track and manage waste and materials on live construction and renovation sites. Traditionally, this process has been manual, leading to incomplete and low-quality data, wasted time, and increased project costs.
With Qflow, materials and waste are digitally logged through simple photographs eliminating the need for hardware, barcodes, manual data entry, and ensuring complete supply chain independence. This innovation has saved project teams 80% of site administration time and on average £200,000 per project annually. Qflow supports cost and quality control, ESG and environmental reporting, and improves waste compliance by over 70%. It also provides valuable insights that help construction teams reduce carbon emissions in real-time.
Currently, Qflow is used on more than 200 construction sites across the UK and USA, serving major contractors and developers such as HS2, Landsec, GPE, Bouygues, and Berkeley Homes, among others.
Founded in 2018 by a civil engineer and an environmental scientist with backgrounds in construction, Qflow has expanded to a team of 50 professionals, including software engineers, data analysts, and construction experts, all dedicated to building a more sustainable future.
Skanska Costain STRABAG (SCS) and Qflow initially secured funding through an SBRI grant to support the first year of deploying Qflow’s innovative environmental monitoring technology. Within just six months, Qflow demonstrated significant value on one of the SCS Joint Venture (JV) sections. This success led to developement of a case study that quantified and qualified Qflow’s impact. The findings were presented to HS2 delivery partners at an innovation expo day, impressing stakeholders with the data insights generated from simple on-site photographs.
Following this success, Align and BBVS procured Qflow for their respective sections, and SCS expanded its use to include an additional section. This resulted in a fourfold increase in Qflow’s deployment across the HS2 project and established connections with contractors involved in these Joint Ventures (JV). Qflow continues to support multiple HS2 JVs and has successfully extended its proven value and learnings to the highways, critical infrastructure (such as flood defences), and utilities sectors.
We initially began working with the HS2 innovation team, where Qflow’s potential was trialled through a small pilot with CSJV (Costain Skanska JV) during the Enabling Works phase. This early success provided proof of concept, which led HS2 to offer a part-funded, one-year extension to encourage uptake among the Main Works Joint Ventures. This crucial support allowed further testing and validation of Qflow’s technology, which eventually led to broader deployment.
From there, each JV partner proceeded with their own procurement process. By this point, Qflow had clearly demonstrated value and delivered a return on investment, making the case for direct procurement by the Joint Ventures themselves.
Qflow’s deployment on the HS2 project highlights the importance of collaboration, flexibility, and innovation in delivering successful projects. By addressing procurement challenges, building a robust business case, and engaging effectively with stakeholders, Qflow expanded its footprint significantly. The technology’s ease of use, strong engagement, and broad applicability underscore its value across various sectors, ensuring continued growth and impact.
One of the problems we came across was that the procurement decision wasn’t clearly owned by a single department or team. It meant that the buying of a licence to software such as Qflow sat between multiple parties, which created a delay in the overall procurement. It can be expected to get buy-in from multiple stakeholders, especially for us as the value case spans different use cases across a business, however there still needs to be clear ownership of buying decisions and for the responsible team to be empowered to make this.Jade Cohen,Co-Founder and CPO at Qflow
International experts from across sectors shared their experiences in leveraging procurement for problem-solving, driving innovation, and overcoming structural challenges.
The panel is featuring:
Key Discussion Points:
What you will gain from watching this session:
This session is valuable for procurement professionals, policymakers, and innovators looking to break down barriers and drive meaningful change in public sector procurement.
Have you used innovation in your procurement processes? Whether it led to success or uncovered challenges, your experience can help others.
We’re gathering case studies from local and combined authorities to share practical insights on what worked, what didn’t, and what others can learn.
By sharing your journey, you’ll contribute to a growing knowledge base that supports better procurement across the public sector.
This panel explores how the Procurement Act 2023 can drive innovation-led procurement and help achieve better public sector outcomes. With the UK public sector spending over £380bn annually through public contracts, there is a significant opportunity to use procurement as a tool for fostering innovation.
The panel is featuring:
Key Discussion Points:
After watching this panel session you will gain:
If you’re involved in procurement, public sector innovation, or supply chain management, this discussion will provide valuable takeaways on how to leverage procurement as a tool for meaningful change.
Watch the full discussion below and see how you can apply these insights in your organisation.
Have you used innovation in your procurement processes? Whether it led to success or uncovered challenges, your experience can help others.
We’re gathering case studies from local and combined authorities to share practical insights on what worked, what didn’t, and what others can learn.
By sharing your journey, you’ll contribute to a growing knowledge base that supports better procurement across the public sector.
Pey-Yu Yuan
Alliance Manchester Business School,
University of Manchester
Raquel Ortega-Argilés
Alliance Manchester Business School
University of Manchester
Elvira Uyarra
Alliance Manchester Business School
University of Manchester
The Role of Government Buyers in Shaping Firm Productivity
Public procurement is a major economic force in the UK, accounting for £385 billion annually. While procurement is widely recognised for its ability to stimulate innovation, create market opportunities, and drive social value, its direct impact on firm productivity remains underexplored. This research brief examines how government contracts influence business performance, analysing trends in procurement income, supplier composition, and the effect of different government buyers—central government, local government, and the NHS—on firm productivity.
Using data from 26,411 UK suppliers between 2016 and 2019, this study uncovers key trends in supplier distribution, sectoral participation, and the non-linear relationship between public procurement and firm productivity. By understanding the dynamics of government purchasing power, both businesses and policymakers can refine their strategies to maximise economic impact and efficiency.
Key Findings
Implications
For firms, winning contracts is about more than just volume—it is crucial to consider the type of government buyer. Diversifying across multiple government entities can reduce risks, stabilise revenue streams, and improve productivity outcomes.
For policymakers, procurement strategies should move beyond just awarding contracts and instead focus on reducing inefficiencies, supporting diverse supplier participation, and fostering a more innovation-friendly procurement ecosystem.
This research offers data-driven insights for businesses and policymakers navigating public procurement, exploring who supplies the government, how procurement influences firm performance, and which government buyers provide the best opportunities.
The role of government buyers in shaping firm productivity
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File size: 4.47Mb
Fumi Kitagawa
City-REDI, University of Birmingham
Public procurement is a powerful tool for economic growth, innovation, and social impact. Local governments play a crucial role in shaping regional economies by using procurement strategies to stimulate innovation, create jobs, and deliver social value.
This research brief explores how public procurement can be used strategically to address regional needs, particularly in a time of constrained public resources. The West Midlands serves as a prime example of how procurement policies can drive place-based transformation. The West Midlands Innovation Programme (WMIP) supported Digital Innovation in Public Services (DIPS) project, which presents how a region can create values through procuring innovation. The Innovation procurement partnership model demonstrates how local authorities can foster economic and social values through strategic partnerships. By integrating procurement with local industrial strategies, the region enhances SME participation, promotes green innovation, and delivers measurable social value.
Key Highlights:
By adopting a place-based approach, local governments can tailor procurement policies to address specific regional economic and social challenges. The findings from the West Midlands serve as a valuable guide for policymakers, businesses, and researchers seeking to maximise the impact of public procurement on regional development.
Place-based collaborative opportunities and challenges for public procurement of innovation
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File size: 4Mb
A tool designed to support informed decision-making for transport managers, local planners, service owners, and other public-sector professionals. It provides practical guidance, actionable insights, and real-world examples of various procurement routes, empowering non-procurement professionals with a deeper understanding of innovation-friendly procurement practices that align with the new Procurement Act 2023, launched in February 2025.
The challenge of harnessing innovation to drive change at speed and scale is twofold. First, innovators need support in bringing their products and services to market. At the same time, public-sector professionals must be empowered to make informed decisions about the procurement of innovation. Additionally, there is a need to raise awareness within the public sector about the new regulations in the Procurement Act 2023, which introduce greater flexibility and transparency in innovation procurement.
The Innovation Procurement Support Tool has been developed in direct response to this challenge. Its goal is to support informed decision-making among public-sector professionals, including transport managers, local planners, and service owners. The tool will help users become more confident and capable customers of innovation, unlocking new revenue streams to fund innovative activities and suppliers.
The Innovation Procurement Support Tool enables users to:
The tool guides public-sector users in selecting the most suitable market engagement methods for procurement based on their stage in the innovation process. This helps reduce risks and overcome common market barriers.
The tool also provides targeted guidance on critical topics, including: Challenge Definitions, Preliminary Market engagement, Grant Funding, Pre-Commercial Procurement, the Procurement Act 2023, and the Competitive Flexible Procedure, among other procurement processes.
By equipping public-sector professionals with knowledge of diverse procurement approaches—complete with practical and actionable insights—the tool supports effective responses to emerging challenges in innovation.
Additionally, the tool helps users navigate key platforms and access existing resources, guidance, and case studies from GOV.UK, IUK’s Contract for Innovation, the Innovation Procurement Empowerment Centre (IPEC), Connected Places Catapult, Crown Commercial Services, and other relevant sources.
How to navigate the guidance content in this tool:
This project is grant funded by the Department for Transport, run by Connected Places Catapult, supported by the Transport Research Innovation Board (TRIB) and is integrated onto the Innovation Procurement Enterprise Centre (IPEC) website.
Following initial discovery work, the project team undertook a programme of user engagement to better understand the key procurement challenges and needs. Combined with a review of existing resources, this research informed the creation of an Innovation Procurement Support Tool comprised of dedicated guidance content and case studies.
The tool is specifically tailored to meet the needs of public-sector users. While the case studies focus on the transport sector, the guidance is valuable and applicable across the broader public sector. In addition, widespread promotion of the tool on project partner platforms will optimise uptake, plus help to gather feedback and recommendations for a potential Phase 2.
Please note that DfT is not responsible for the accuracy of the information on this tool.
Start exploring Guidance and Support on different ways to procure innovation.
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Share your council’s innovative procurement success story and inspire others across the UK to adopt transformative approaches for their communities!
Elvira Uyarra
University of Manchester
Rikesh Shah
Connected Places Catapult
This research brief discusses the implication of recent policy developments, including the National Procurement Policy Statement (NPPS) and the Procurement Act 2023, which highlight the potential for procurement to drive local economic growth and innovation. It argues that, in order to harness the full potential of public procurement for regional development, a shift towards more strategic, innovation-friendly, and regionally sensitive procurement practices will be needed. Key recommendations of this brief include:
For further insights into procurement’s role in regional development and innovation, refer to research by the Innovation Procurement Empowerment Centre (IPEC), which continues to analyse procurement strategies, spending patterns, and policy impacts across the UK.
Public Procurement and Regional Development in the UK: Challenges and Opportunities in a New Policy Landscape
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With the financial challenges facing public agencies and the pressure to solve multiple problems that urgently need to be addressed from the climate emergency, transport and housing, etc., the need for market innovation has never been so important. The recently published National Procurement Policy Statement and the updated Social Value Model emphasises the government’s desire to use public procurement to implement its policy objectives.
The UK public sector already spends more than £380bn with the private sector annually through public contracting. As we see advances in technology and the government’s push for innovative ideas to solve public policy challenges, this budget can be further optimised through bringing in new innovative solutions to deliver better, quicker, cheaper and greener outcomes. Good ideas tested in the UK can also be exported and supported UK PLCs more broadly. By using its strong purchasing power, the public sector at local, regional and national levels can shape markets by stimulating innovators of all sizes – from start-ups, scale-ups, corporate or academic spinouts, to realise new benefits. Public agencies should each be ambitious in using their significant purchasing powers to inspire and integrate innovative products or solutions into business-as-usual delivery. Through the different discussions that I have had, it is encouraging that the government and the innovators from the private sector recognise this opportunity.
The new Procurement Act focuses on a wide range of areas that will make procurement simpler and more efficient. In my role as the Head of the Innovation Procurement Empowerment Centre, I believe it is absolutely right that the Act places a good focus on innovation. Funded by the government through Innovate UK, IPEC is working with local authorities, governmental arms-length bodies, devolved authorities and national departments to empower and upskill different specialist staff from procurement, innovation, services, tech and data and many other to make the most of procurement-based challenges. IPEC is also working with senior leaders on helping to curate the right culture for innovation through procurement to thrive in different organisations.
Whilst the theory above sounds right, in order to enable this, we need the right leadership, culture, capacity, capability and more to create an entrepreneurial culture and mindset in the public sector that embeds the right conditions for innovators from the market to respond to key challenge areas by testing, iterating and potentially scaling innovative solutions through the use of public procurement. I was reading a paper from Lina Svensberg recently and she talks about the process of venture development in the public sector which is common in the private sector (as innovation is what is needed to keep a company a strong going concern) but it is much more difficult to apply in the public sector as you dealing with unknowns and, as such greater risk.
The challenge of addressing culture also came out strongly in our IPEC Research Survey when we asked public bodies across the UK on the barriers to innovating through procurement.
When speaking with different public bodies, one area is common; the need to bring in, test and scale innovative ideas through using procurement continues to be a barrier whether it’s risk, fear of failure, organisation silos, procurement or managing change.
To be clear, it’s not that public agencies aren’t using market innovation to solve some of their knotty challenges; we have seen Transport for London, Dorset Council, Rail Delivery Group, Sunderland City Council, Westminster City Council. Bristol City Council, Transport for West Midlands and many others in the UK creating the right culture and processes to drive more public and private collaboration through the use of procurement. But, we need this approach across the public sector where we collaborate with the market to solve some of the challenges in a new way through having an entrepreneurial approach of innovating and experimenting with the market rather than simply relying on the tenacity of a brilliant individual in these public bodies trying to drive to change in an environment where the conditions don’t assist.
The Procurement Act can help stimulate more market innovation if we take advantage of it. Here are some areas of focus that stand out for me:
Whilst there is an emphasis on transparency, it would be even better to have more data at a micro level on where the public sector is allocating budgets and funding for innovation, as well as publishing how much value has been realised. Also, furthermore, is there an opportunity to reduce the worry of large penalties when a public body is trying to do the right by using an outcome-based procurement?
I look forward to seeing how the new Procurement Act will be a catalyst – through market innovation – in creating better public policy outcomes. It can create an environment where staff at all levels, suppliers of all sizes, stakeholders from across the UK and the end citizen work closer together in unison and provide a much greater return.
