Globally, governments around the world are upgrading their procurement functions with a fresh perspective. The New Government Procurement Act is at the forefront of these reforms, introducing transparency, efficiency, and accountability in public spending. The Philippines has enacted the New Government Procurement Act (Republic Act No. 12009), marking a major step toward streamlining procurement. Similarly, the UK’s Procurement Act 2023, effective February 24, 2025, aims to enhance competition and oversight.
In this article, we explore the impact of the New Government Procurement Act, its implications for businesses, taxpayers, and policymakers, and how these changes align with global procurement trends.
Understanding the Government Procurement Act
Public or government procurement plays a massive role in shaping how public entities acquire goods and services. The newly enacted Government Procurement Acts aim to deliver an upgrade to existing structures through a comprehensive framework aimed at enhancing the procurement process. The acts not only streamline the acquisition procedures but also introduces a level of transparency and accountability that was previously lacking. Understanding the nuances of this legislation is crucial for stakeholders, including government officials, businesses, and taxpayers.
Let’s take a look at the Procurement Act 2023, enacted by the United Kingdom and enforced in February 2025.
The main goal of this act is to serve as a transformation of public procurement through:
- Simplified and flexible commercial system
- Making public procurement more accessible to small businesses and new entrants
- Strict action on underperforming suppliers and even excluding suppliers that pose risks
- Greater transparency throughout the procurement process
The act aims to replace outdated procurement regulations with a modernized approach that reflects current best practices. It emphasizes the need for fair competition among suppliers and aims to eliminate corrupt practices that have historically plagued government contracts. By establishing clear guidelines and standard procedures, the new act seeks to create a level playing field where suppliers can compete on merit rather than connections or past relationships.
Comparison with the previous procurement regulations
| Key Features | Philippines (Republic Act No. 12009) | United Kingdom (Procurement Act 2023) | European Union (EU Public Procurement Directives) | South Korea (KONEPS) | United States (Federal Acquisition Regulation – FAR) |
| Effective Date | 2024 | 24 February 2025 | Various updates; latest reform in 2024 | Established in 2002, continuously updated | FAR established in 1984, with regular updates |
| Legal & Regulatory Framework | Republic Act No. 12009 | Procurement Act 2023 | EU Public Procurement Directives | KONEPS Framework | Federal Acquisition Regulation (FAR) |
| Governance & Transparency | Strengthened public access to procurement data | Centralized digital procurement platform | Mandatory publication of tenders above thresholds | Real-time public access to procurement data | Public access via SAM.gov |
| Supplier Selection | Competitive bidding, local supplier preference | Best-value procurement, not just lowest price | Open competition with SME-friendly policies | Automated evaluation and selection | Competitive bidding with set-asides for small businesses |
| Technology & Process Efficiency | Digital procurement introduced | Mandatory centralized e-procurement | eProcurement via TED (Tenders Electronic Daily) | Fully digital, AI-driven procurement system | Gradual shift to digital procurement |
| Accountability & Oversight | Stricter audit and compliance mechanisms | Independent Procurement Review Unit | National authorities with EU Commission oversight | AI-driven compliance monitoring | Oversight by GSA and agency regulators |
| Sustainability & Social Considerations | Encouraged but not mandatory | Stronger emphasis on environmental and social factors | Mandatory green procurement in many areas | Green procurement integrated into evaluations | Federal Sustainability Plan mandates green procurement |
| SME & Local Business Support | Prioritizes MSMEs and local suppliers | Reduced barriers for SME participation | SME-friendly thresholds and set-asides | Special incentives for SMEs and startups | SBA ensures SME participation |
| Innovation & Flexibility | Encourages modern procurement practices | Introduces flexible procurement procedures | Innovation partnerships allowed | AI and big data-driven procurement analysis | Innovative contracting (e.g., Other Transaction Authority – OTA) |
| Impact & Challenges | Implementation challenges in decentralized regions | Transition period for businesses adapting | Complexity in multi-country procurement | High reliance on technology, cybersecurity risks | Complex regulations create administrative burden |
Key Takeaways
- Common Features: Transparency, digital procurement, SME support, and accountability are priorities across all frameworks.
- Key Differences:
- EU: Strongest on cross-border procurement and sustainability.
- KONEPS (South Korea): Most advanced in digitalization and automation.
- US (FAR): Highly structured but complex; strong SME protections.
- UK & Philippines: Recent reforms emphasize streamlined processes and competition.
The introduction of the New Government Procurement Acts marks a major shift from outdated procurement regulations that often lacked efficiency and accountability. Previous frameworks were plagued by inconsistencies, creating loopholes for corruption and favoritism, ultimately eroding public trust in government spending.
For example, the European Union’s International Procurement Instrument (IPI), enacted in 2022, combats unfair foreign procurement practices by restricting market access to countries that discriminate against European businesses. This move promotes fair competition in global procurement.
In contrast, the New Government Procurement Acts introduce centralized oversight and standardized procedures, eliminating ambiguities and ensuring transparency. These reforms are key to restoring public confidence and ensuring taxpayer money is spent efficiently.
Another critical improvement is the emphasis on sustainability and social responsibility—areas previously overlooked. The New Government Procurement Acts prioritize responsible procurement, aligning public spending with societal and environmental goals. This progressive approach not only enhances economic efficiency but also strengthens communities and promotes sustainability.
By comparing past regulations with the New Government Procurement Acts, it’s clear that these reforms represent a significant step forward in modernizing public procurement.
Changes brought by the new Government Procurement Act
Much like the UK government’s Procurement Act 2023, the Republic Act No. 12009, the Government of Philippines version of the New Government Procurement Act, introduces several key changes that fundamentally alter the procurement landscape. One of the most significant changes is the move towards a more sustainable procurement process as part of their Green Public Procurement and Inclusive Procurement Programs. This move aims to ensure promoting active participation of microenterprises, social enterprises, startups, and women-led or women-owned enterprises. Additionally, this shift is indicative of a broader trend towards responsible purchasing, aligning government contracts with societal values and aspirations.
Electronic bidding and online platforms for submitting proposals will become the norm, reducing paperwork and the likelihood of errors. As seen, not only in the move towards an E-Procurement system by the Government of Philippines, but also by South Korea’s KONEPS (Korea Online e-Procurement System), which was already hailed as a global benchmark, underwent a major expansion in 2023, integrating AI-driven analysis to detect procurement irregularities.
Furthermore, the acts establish stricter accountability measures. Almost all governments globally advocate for regular audits and compliance checks, ensuring that procurement processes are not only transparent but also subject to scrutiny. This heightened accountability is expected to deter corrupt practices and mismanagement of public funds. By instituting these changes, the Government Procurement Act aims to foster a culture of integrity and responsibility in public procurement, which is essential for maintaining public trust.
Implications for businesses and suppliers
The new Government Procurement Acts being enacted globally have significant implications for businesses and suppliers that wish to engage with government contracts. For many suppliers, especially small and minority-owned enterprises, the act opens up new avenues for participation in government procurement. This can be seen in the changes brought about by the United Kingdom government’s Procurement Act 2023, as well as the Republic Act No. 12009 brought forward by the Government of Philippines. With the emphasis on transparency and fair competition, these businesses can compete on a more level playing field. This inclusivity is vital for fostering diversity in government contracting and ensuring that public funds benefit a broader segment of society.
Moreover, businesses will need to adapt to the new requirements and processes laid out in the act. This may involve investing in training and technology to meet compliance standards, which could be a barrier for some smaller companies. However, those that successfully navigate the new landscape stand to gain significant opportunities, as government contracts can provide a stable revenue source. The act’s focus on electronic procurement will also encourage businesses to embrace digital transformation, potentially enhancing their overall operational efficiency.
On the flip side, larger companies that have historically dominated government contracts may face increased competition from smaller players. The new act aims to disrupt existing power dynamics and ensure that contracts are awarded based on merit rather than established relationships. This shift may compel larger firms to reevaluate their strategies and foster partnerships with smaller suppliers, creating a more collaborative environment in government contracting.
Key provisions of the Government Procurement Act
The Government Procurement Act is rich with key provisions that define its operational framework. A common factor that we can observe in most of the New Government Procurement Acts, be it the United Kingdom with their Procurement Act 2023, or the Government of Philippines with their Republic Act No. 12009, one of the most critical provisions is the establishment of a centralized procurement authority. This body will oversee all government procurement activities, ensuring compliance with the act and providing guidance to various government entities. Furthermore, by centralizing authority, the act aims to standardize processes and reduce discrepancies in how procurement is conducted across different departments and agencies.
Similarly, significant provision is the requirement for comprehensive stakeholder engagement throughout the procurement process. The act mandates that government agencies must consult with stakeholders, including suppliers and the public, before finalizing procurement plans. This engagement ensures that the needs and concerns of all parties are considered, leading to more informed and effective procurement decisions. Additionally, It also enhances transparency by allowing stakeholders to voice their opinions and contribute to shaping procurement policies.
Additionally, the act introduces measures to enhance data availability and accessibility. Government agencies are required to maintain public databases that outline procurement opportunities, contract awards, and supplier performance. This transparency enables businesses to make informed decisions about pursuing government contracts and fosters a competitive environment where suppliers can assess their standing and make necessary adjustments to improve their chances of winning bids.
Key aspects of the New Government Procurement Act include:
- Centralized oversight: Many countries, including the UK and EU, are consolidating procurement processes to ensure consistency and transparency.
- Technology-driven procurement: South Korea and India have successfully implemented digital procurement systems, reducing inefficiencies and improving monitoring.
- Sustainability & Fair Competition: Reforms such as the EU’s IPI prioritize fair international competition and environmentally responsible procurement practices.
Compliance requirements under the new Act
A notable feature found in most of the New Government Procurement Acts is the emphasis on compliance. These acts outline specific requirements that government agencies and suppliers must adhere to, ensuring that procurement activities are conducted in a fair, transparent, and accountable manner. For government entities, this includes establishing internal compliance protocols and training personnel on the new regulations to prevent any lapses in the procurement process.
Moreover, these acts stipulate that both government agencies and suppliers must engage in regular reporting and audits to assess compliance with the provisions. These audits will be conducted by the centralized procurement authority, which will evaluate the effectiveness of procurement practices and the integrity of reporting mechanisms. This level of scrutiny is designed to foster a culture of accountability and transparency in government procurement, ultimately benefiting taxpayers by ensuring that public funds are spent wisely.
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Training programs for understanding the Government Procurement Act
To ensure a smooth transition to the new procurement framework established by the Government Procurement Act, comprehensive training programs will be essential. These programs are designed to educate government employees, suppliers, and stakeholders about the act’s provisions, compliance requirements, and best practices for effective procurement. However, Training sessions can take various forms, including workshops, online courses, and seminars, catering to different learning preferences and schedules.
These training programs will focus on key aspects of the act, such as the new procurement processes, stakeholder engagement requirements, and ethical standards. Additionally, by providing hands-on learning opportunities and real-world case studies, participants will gain a thorough understanding of how to navigate the new procurement landscape. Furthermore, these programs can also facilitate networking among stakeholders, fostering collaboration and knowledge-sharing that can enhance procurement practices across the board.
On 30th May 2024,, the Public Procurement Service of Korea and the Kyrgyz Ministry of Finance signed an MOU for the deployment of a KONEPS-based electronic procurement system. A key feature of this MOU was to support the Government of the Kyrgyz Republic to fully digitalize its e-procurement system and help shift all government procurement transactions on-line with better functionality and security.
Similarly the United Kingdom as part of their adoption of the New Procurement Act 2023, have urged senior leaders to support the process by:
- Checking in, and offering support and encouragement for commercial and procurement teams who are coordinating the change, and championing their work across the wider organizational family.
- Encouraging early engagement by policy with commercial teams – this is key to delivering innovation and getting the most from the market.
- Using the new flexibilities in procurement when appropriate and championing this change across government and wider public sector – in order for this reform to be effective, we need to drive behavioral changes.
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Conclusion and future outlook
Globally, the enactment of New Government Procurement Acts signal a shift towards more transparent, accountable, and inclusive public procurement. Countries like the United Kingdom, South Korea, and India are leading the way with digital procurement platforms and regulatory frameworks that emphasize competition and sustainability.
As procurement continues to evolve, the focus must remain on innovation and responsiveness to societal needs. With initiatives like the EU’s IPI, which addresses unfair foreign procurement practices, and the UK’s Procurement Act 2023, which promotes SME participation, procurement laws are aligning with broader social and economic goals. Ultimately, these reforms have the potential to drive economic growth, enhance public trust, and create more inclusive opportunities for businesses. The journey toward more efficient government procurement is well underway, and its impact will be felt for years to come.
