How to Win More Government Contracts Under the Procurement Act

Government contracts are no longer just for big businesses. Thanks to the SME Action Plan and the Procurement Act 2023 (or PA23), small and medium-sized enterprises (SMEs) now have a real chance to compete and win work with the public sector. Millions of pounds in opportunities are available – if you know where to look and how to apply.

This guide will show you how your business can start winning government contracts step by step.

What is government contracting?

Before you start, it’s important to understand what government contracting means.

Government contracting happens when public sector organisations appoint businesses to provide products, services, or works. This could be anything from IT support, catering, and cleaning to building projects or professional services like accounting or marketing.

Knowing how government contracts work is the first step to winning one. Government contract bids are reviewed not just by price – their process has changed from “MEAT” (most economically advantageous tender) to “MAT” (most advantageous tender). This reflects the importance of the quality, experience and social value.

Once you understand the process, you can plan how to compete with larger businesses.

What is the Procurement Act 2023?

The Procurement Act was passed in 2023, but it didn’t fully come into effect until February 2025.

It replaces old EU-based regulations with a simpler, more transparent, and more flexible system. These changes make it easier for small businesses to get involved in public sector contracts. The main goal is to make UK public procurement fairer, simpler, and more accessible for SMEs.

To support implementation, the Crown Commercial Service published the SME Action Plan in October 2025. This practical guide helps both public sector buyers and businesses follow these new rules.

Key changes include:

Social value requirements. Contracts now reward businesses that provide benefits to communities, like creating local jobs or supporting sustainability projects.
Greater transparency. Public bodies must publish contract opportunities, how they score bids, and who they’re awarded to.
Central debarment list. This makes sure that businesses that break the rules can’t bid on contracts.
Streamlined procedures. Simpler rules for awarding and changing contracts.

The Procurement Act 2023 works hand-in-hand with the SME Action Plan to guide small businesses. It includes procurement act guidance on contract thresholds, how to tender, and how to register.

Procurement Act 2023 thresholds

The Procurement Act 2023 sets thresholds that decide when a contract has to be advertised on official platforms. Knowing these thresholds can help you spot opportunities your business is eligible for.

Here are the key thresholds for contracts between 1st January 2024 and 31st December 2025 (including VAT):

Works contracts: £5,372,609
Utility works contracts: £5,372,609
Utility contracts that are not works, defence, security, or light-touch contracts: £429,809
Concession works and services contracts: £5,372,609
Contracts for goods or services to central government authorities: £139,688
Contracts for goods or services to sub-central government authorities: £214,904

In short, if a contract is worth more than these amounts, it must be advertised on Find a Tender. Those below may still need to be advertised, typically on Contracts Finder, unless they’re very low value (more on these platforms later). This ensures transparency and gives small businesses a fair chance to bid.

What’s the SME Action Plan?

The SME Action Plan, published in October 2025 by the Crown Commercial Service (CCS), is designed to help small and medium-sized businesses get a fairer shot at government contracts. It shows how government departments and agencies will increase their spending with SMEs and supports the UK Procurement Act 2023.

In short, it makes public procurement simpler, clearer, and more accessible for smaller businesses.

New features for SMEs include:

Departmental spend targets to ensure every department is encouraged to buy more from SMEs, with clear reporting to track progress.
Simplified supplier registration means less paperwork and faster onboarding, making it easier to get started.
Procurement portals and tools are being improved so SMEs can have better digital access and quickly find, understand, and bid for opportunities.

These changes give small businesses a real chance to compete for contracts that were once dominated by larger companies.

How to get started

Step 1: Where to find government tenders

Knowing who awards government contracts is key. Contracts can be found on several official platforms:

Find a Tender: The UK’s central hub for all contracts above £138,760 (or £5,336,937 for works contracts).
Contracts Finder: Lists public sector contracts above £12,000, including smaller local contracts.

It’s also worth finding and registering for tendering portals for public bodies in your local area, for example your local council.

Pro tip: Set up email alerts with keywords related to your business and business interests to get notified when new tenders are published.

Step 2: How to qualify and register as a supplier

The new Procurement Act makes it easier for SMEs to register and qualify. To bid, you usually need a few basic documents.

To bid for most public sector contracts, you’ll typically need:

Companies House registration
Public liability and employers’ liability insurance
Basic policies covering GDPR/data protection, health & safety, and equality
A short capability statement or case studies demonstrating relevant experience

Thanks to the new Central Digital Platform, suppliers can now register their organisation and key details (like Companies House number, insurance, and policy documents) in one place. This information links directly with the tender portals public bodies use, so instead of uploading the same documents for every bid, you just need to confirm that nothing has changed. It’s a big step forward in reducing paperwork and speeding up the bidding process.

Check out CCS’s supplier registration guidance for further details.

Step 3: How to compete and win against bigger firms

Even if you’re a small business, you can still win government contracts. The SME Action Plan gives you some advantages:

Set-aside contracts. Some tenders are just for SMEs, so you’re not up against big companies.
Simpler questions and clear scoring. Know exactly what buyers are looking for.
Direct-to-market options. Tools like Dynamic Markets let you sell straight to public sector buyers.

Here are our top tips to make your bid stronger:

Understand the requirements. Read the tender document carefully and make sure your business meets all the criteria.
Show your value. Highlight what makes your business stand out, such as experience, innovation, or speed.
Use official templates. Keep your application clear and professional.
Emphasise social value. Demonstrate local impact, sustainability, or community benefits.
Start small. Look for smaller contracts (under £50,000) or tenders designed for SMEs. These are easier to win and help you build a strong track record.

With the right approach, even small businesses can compete with larger firms and win government contracts.

Who can help you

Many organisations provide support to SMEs bidding for government contracts. For example:

Local business hubs
Trade associations
Chambers of commerce

These organisations often offer workshops, templates, and advice on how to win contracts with the government. Most public bodies will also have their own pages on how to supply to them, for example, the CCS and Suffolk County Council.

Practical resources and links

Resource	Description
Contracts Finder	Discover public sector contracts over £12,000, including SME-friendly and local opportunities.
Find a Tender	Search high-value UK government contracts above threshold, as required under the Procurement Act.
CCS Supplier Registration Portal	Register your business to access CCS frameworks and Dynamic Markets.
Procurement Act 2023 Guidance Collection	Official guidance on thresholds, exclusions, award rules, and how to tender under the new system.
SME Action Plan 2025 - CSS Policy Paper	CCS’s strategy to increase SME spend and reduce barriers to entry.

Conclusion

The PA23 and the SME Action Plan have made it easier than ever for small businesses to win government contracts. With simpler rules, clearer guidance, and more SME-focused opportunities, public sector work is now within reach for many small firms.

To put the opportunity in perspective, government procurement is worth over £340 billion a year – roughly a third of all public spending. That’s a vast market where even small wins can make a meaningful difference to your business.

Start by registering on the main portals, setting up alerts, and applying for contracts that match your strengths. With each bid, you’ll build experience and credibility, opening doors to larger and more complex opportunities over time.

Government contracts can be a steady, long-term source of income. The tools and support are there – now it’s your turn to make the most of them and start winning.

Your common questions answered

What is the new Procurement Act 2025 and how does it affect SMEs?

The Procurement Act was actually passed in 2023. However, most of its provisions didn’t come into force until February 2025. That’s when the old EU‑based rules were fully replaced and the new system became live.

The SME Action Plan (October 2025) gave it fresh visibility, so people associate the reforms with this year. It builds on the reforms introduced in 2023, further simplifying tendering rules, strengthening transparency requirements, and expanding SME‑friendly measures such as departmental spend targets and set‑aside contracts.

For small businesses, this means more opportunities, clearer guidance, and a fairer chance to compete against larger suppliers.

How much is government procurement worth each year?

Government procurement is a major part of the UK economy. In 2023/24, public sector bodies spent around £341 billion buying goods and services from the private sector – about one‑third of all public spending.

Where can I find government contract opportunities?

Most opportunities are published on official portals:

Find a Tender – for high‑value contracts above the legal thresholds.
Contracts Finder – for contracts above £12,000, including many SME‑friendly tenders.

Departments and local councils may also host their own portals. Setting up alerts with keywords related to your business ensures you never miss a relevant opportunity.

Do you have a question that you can't see? Check out our FAQ page.