The Procurement Act puts subcontractors’ track records on public view, writes Gregg McClelland, CEO of Onetrace
For years, subcontractors on public sector contracts have carried much of the risk with little visibility of how payment and scrutiny flow down the chain. The Procurement Act 2023 starts to change that.
The act came into force in February 2025, but several of its most significant provisions, including new payment reporting and performance notices, only took effect this year. Subcontractors bidding for public sector contracts, whether directly or as part of a main contractor’s supply chain, are now operating under new rules. Here’s what that means in practice.
Merit starts to outweigh the lowest price
The core aim of the act is to widen access to public sector contracts for smaller specialist subcontractors who have often lost out on price alone.
Under the new rules, buyers must now assess bids on quality, social value, environmental impact, innovation and long-term public benefit, not simply on who submits the lowest figure.
For subcontractors, that’s a real shift. Work that would have gone to the cheapest bidder in the past can now be judged on merit: the quality of what you deliver, the evidence behind it and the broader value you bring to a project. That matters most for specialist trades, whose quality and track record are rarely reflected in the lowest bid.
Late payment under the spotlight
Late payment has been one of the construction supply chain’s longest-running problems, and the act has placed an emphasis on fixing it. Public bodies must now pay invoices within 30 days and, for the first time, that performance is being made public.
The UK17 Payments Compliance Notice is now in effect and requires public bodies to report the average time taken to pay invoices, offering subcontractors a clear, public record of who actually pays on time.
For contracts over £30,000, payment data must be reported, making payments more transparent. It’s published as a UK8 contract payment notice and covers payments to subcontractors, as well as main contractors. For the first time, subcontractors have a public paper trail showing whether payment terms further up the chain are actually being honoured.
That record matters because many payment disputes come down to who was on site and when. Digital platforms now give subcontractors time-stamped evidence of exactly that, which can settle a delay dispute in a single meeting.
Without it, the dispute often comes down to one person’s word against another’s.
A record that lasts
The act introduces a debarment list and it changes the stakes of getting a project wrong. It’s a formal list of suppliers who have significantly underperformed on previous public sector contracts. Subcontractors placed on this list will be excluded from bidding on future public sector contracts.
This isn’t a minor administrative footnote. A poor track record on one project can lock a subcontractor out of public sector work going forward, making clean compliance records and consistent performance a commercial necessity rather than a box-ticking exercise.
Evidence also protects completed work. Photographic evidence of fire compartmentation, for example, means a later compliance question can be answered without stripping out finished walls or disturbing residents.
Performance data moves into the open
Transparency now extends to how contracts are actually delivered. For larger contracts, buyers must now publish notices detailing how well a contract is being performed, including specified key performance indicators. These contract performance notices apply to public sector contracts worth over £5m.
These give other buyers, and competitors, visibility of how a subcontractor has actually delivered. It also gives public bodies a sharper picture of which suppliers consistently deliver, which should feed into procurement decisions.
Reliable, well-evidenced performance data works in a subcontractor’s favour here. But the reverse is also true: a public record of underperformance can shift a buyer’s attention toward a competitor before a conversation even starts.
Compliance runs down the chain
The responsibility doesn’t stop with the public body. Main contractors now carry direct responsibility for checking the debarment status of their subcontractors. They must also ensure the compliance obligations set out in their contract with the public body are written into every subcontract below it.
In practice, this means main contractors will be more rigorous, and more cautious, when selecting who they work with. Many will also start asking subcontractors for evidence of compliance upfront, rather than after problems arise.
Some are already going further, setting a common reporting standard across their subcontractor base so every trade provides evidence of its work in the same way.
A higher bar
Taken together, the act shifts power meaningfully towards subcontractors on payment rights and access, but it raises the compliance bar considerably. The debarment list and public KPI reporting mean underperformance now carries lasting commercial consequences, not just a difficult conversation on one project.
Subcontractors who invest in governance, in credentials like the Common Assessment Standard, and in explaining their social value are best placed to benefit. Those who don’t risk being locked out of public sector work altogether.
The bigger question is whether the supply chain is ready for that shift. Compliance, performance and evidence can no longer sit in the background as admin. They’re now a matter of public record and increasingly, the difference between winning the next contract and being quietly excluded from it.
In practice, that means capturing evidence at the point of work, with a time, a location and a photo attached, rather than rebuilding a compliance file after the fact when a buyer or main contractors asks for it.
Much will depend on whether main contractors and public bodies apply the new rules consistently, and whether smaller subcontractors get the support they need to evidence their work properly.
If the act works as intended, the industry could see fairer payment, better informed buying decisions and a stronger link between quality and reward. If it doesn’t, the compliance burden will fall hardest on those least able to carry it.
