Yes, a new UK business can win a government tender. The Procurement Act 2023 (live 24 February 2025) actively moved the rules in favour of small and new entrants. The Central Digital Platform replaces dozens of supplier portals with one registration. The 30-day prompt-payment rule applies on all public-sector contracts and flows down to subcontractors. Below-threshold contracts notifiable from £12,000 (central government) and £30,000 (local councils) opens up tens of thousands of bid-able opportunities a year that a year-old SME can credibly win.
The honest caveat: "new" usually means under two years. The Standard Selection Questionnaire asks for two years of statutory accounts. There are workarounds, but they take preparation. Most first-year UK businesses lose their first three bids. The ones who keep going learn one rule: bid the contracts your size and history actually fit, not the ones the gov.uk page makes sound easy.
- The Procurement Act 2023 is genuinely SME-friendly: Central Digital Platform once-only registration, 30-day prompt payment rule, below-threshold notifications from £12k/£30k, and Dynamic Markets you can join any time.
- The UK government has a stated 33% SME-spend target for central government contracts. SMEs win £1 in every £3 of central government direct spend.
- Two-year accounts: under PPN 03/24 the SQ allows substitutes for new businesses. Forecast cash flow, banker's reference, parent-company guarantee, or insurance evidence to the same value.
- First-bid realistic targets: below-threshold council tenders (£30k-£100k), council Dynamic Markets, and small-value framework call-offs. Not large NHS frameworks or central-government workplace services.
- Common exclusion ground that catches new businesses: missing or expired insurance (£5m public liability is the typical floor), missing modern slavery statement (only mandatory above £36m turnover but often asked), unsigned self-declarations.
- Best first move: register on the Central Digital Platform, complete Parts 1 and 2 of the Standard Selection Questionnaire once, then bid two below-threshold council contracts in your patch within 60 days.
The Procurement Act 2023 is the most significant change to UK public procurement in over a decade. It has been designed to be more flexible, less bureaucratic, and to make it easier for SMEs and social enterprises to bid for public contracts.
Cabinet Office, Transforming Public Procurement guidance
What's in this guide¶
- The 4 SME-friendly Procurement Act provisions that actually move the needle
- What "new" means in tender terms (and why two years matters)
- How to clear the SQ with no trading history
- Realistic first-bid targets by sector
- The exclusion grounds that catch out first-year businesses
- 60-day plan: from registration to your first bid
The 4 Procurement Act provisions that move the needle¶
| Provision | What it does | Why it matters for new businesses |
|---|---|---|
| Central Digital Platform (CDP) | One supplier registration, reused across every UK public bid. Stores Parts 1 and 2 of the Standard Selection Questionnaire (basic info, exclusion grounds). | Replaces the old pattern where SMEs filled in 10-15 separate portal SQs. Build the master once, reuse forever. |
| 30-day prompt payment rule | All public-sector contracts must include a 30-day payment term. Applies down to subcontractors, with implied terms enforceable. | Cash flow risk is the single biggest reason new businesses go under on their first contract. The 30-day rule limits the damage. |
| Below-threshold notification rules | Contracts above £12,000 (central government) or £30,000 (sub-central authorities) must be published on the Central Digital Platform. | Tens of thousands of small-value contracts a year that previously got direct-awarded behind closed doors. New businesses can credibly win at this scale. |
| Dynamic Markets (formerly DPS) | Open lists of pre-qualified suppliers. Apply at any time during the market's life. Members-only call-offs. | Joining once gets you visibility on dozens of call-offs over the market's lifetime. New businesses can be on the list from day one. |
What the Procurement Act 2023 actually changed for new and small UK businesses bidding for public contracts.
If you have not encountered Dynamic Markets yet, the plain-English Dynamic Markets / DPS guide for soft FM SMEs covers what they are, how to apply, and which ones soft FM SMEs should target.
What "new" means in UK tender terms¶
The Standard Selection Questionnaire (SQ) under PPN 03/24 asks for two years of statutory accounts as evidence of financial standing. "New" in tender terms typically means a business that cannot provide that. Different evidence rules apply.
| Company age | What you can usually evidence | What this enables |
|---|---|---|
| 0-12 months | Companies House registration, Director CVs and prior-employer references, UTR / VAT registration if held, opening bank statement, insurance schedule | Below-threshold council bids £30k-£60k. Subcontract roles on larger lots. Tier 3 suppliers on frameworks. |
| 12-24 months | Above + first-year filed accounts (abridged is fine for most), one or two case studies (private-sector counts), banker's reference, accountant letter on cash flow | Below-threshold council bids £30k-£200k. Some Dynamic Market memberships. Selected framework call-offs. |
| 24+ months | Above + two years of full accounts, three case studies in scope and value band | Full SQ qualification on most public-sector tenders. Frameworks, NHS lots, central government tenders open up. |
How tender evidence requirements scale with company age in the UK in 2026.
How to clear the SQ with no trading history¶
PPN 03/24 explicitly recognises that new businesses cannot provide two years of accounts. The Standard Selection Questionnaire allows substitute evidence. The four most common substitutes:
- Cash flow forecast for the contract duration. Built by your accountant, signed off, with assumptions stated. Buyers want to see you've thought through how a £80k contract pays in monthly instalments after the first invoice cycle.
- Banker's reference letter. Your business bank confirms the account has been operated satisfactorily, the overdraft limit, and that they have no current credit concerns. One paragraph, on bank letterhead, takes 5-10 working days to obtain.
- Parent-company guarantee or director personal guarantee. If you trade through a new limited company but have a longer-trading parent (or substantial directors), the parent or directors guarantee the contract performance. Often paired with a Performance Bond.
- Insurance evidence to the contract value. £5m public liability, £10m employer's liability, £1m-£5m professional indemnity (depending on sector). Buyers accept this as evidence of underwriter-assessed risk capacity in lieu of accounts.
Bring all four to your first SQ. Buyers reviewing a new-business bid look for which substitutes you offered, not just which ones the SQ asked for. Strong financial standing evidence beats two years of barely-trading accounts every time.
The full section-by-section walkthrough of the Standard Selection Questionnaire is in the SQ explainer for service contractors. Read Parts 1 and 2 first; those are the gates that catch out new businesses.
Realistic first-bid targets by sector¶
| Path | Typical contract value | Why it works for new businesses |
|---|---|---|
| Below-threshold council cleaning / grounds / waste lots | £30,000-£100,000 / year | Often single-site, simple scope, council prefers a local SME with a credible plan over a national contractor's quoted price |
| Council Dynamic Market memberships | £20,000-£200,000 per call-off | Open application, members-only competition, lower per-bid effort once on the list |
| Subcontracting role with an established prime | Per-package, varies | Established prime carries the SQ history; you carry the on-the-ground delivery. Build a track record under their cover. |
| Single-site primary school catering | £80,000-£200,000 / year | Some MATs run single-school procurements that a small caterer can win on responsiveness and quality |
| Single-site security guarding for a small council estate | £40,000-£120,000 / year | Below-threshold security work where the council values local response and the SIA ACS scheme is the main qualification gate |
Where a UK new business (under 2 years) realistically wins a government contract in 2026.
What does NOT work as a first bid: NHS Shared Business Services frameworks (need scale and case studies), Crown Commercial Service national workplace services (£200k-£20m per lot, expects a real bid team), MoD contracts (security clearance and trading-history requirements), and city-centre civic-centre cleaning contracts above £500k.
Exclusion grounds that catch out new businesses¶
Part 2 of the SQ asks suppliers to declare exclusion grounds. Some are mandatory (lying triggers debarment under the Procurement Act 2023). Some are discretionary. The ones that catch out new businesses:
- Insurance shortfall. Most public-sector contracts require £5m public liability and £10m employer's liability as a minimum. Many SMEs hold £2m public liability from their first business policy and discover the gap mid-bid. Get the upgrade quote before you bid.
- Missing modern slavery statement. Mandatory under the Modern Slavery Act 2015 only above £36m turnover, but increasingly asked for at lower turnover by NHS and council buyers. Have a one-page statement ready, even if not legally required.
- Unsigned self-declarations. PPN 03/24 templates require electronic or wet signature. New businesses sometimes return blank signature blocks. Auto-rejection.
- Companies House late filing. If your annual confirmation statement or first accounts are overdue at Companies House, that is a discretionary exclusion ground. Check before bidding.
- Director disqualification. Any current or recent director disqualification under the Company Directors Disqualification Act 1986 is a mandatory exclusion ground. Disclose proactively.
60-day plan: from registration to your first bid¶
| Days | What to do |
|---|---|
| Days 1-7 | Register on the Central Digital Platform via Find a Tender Service. Upload Companies House info, VAT, UTR, insurance schedule. Set up saved searches in your sector and region. |
| Days 8-14 | Build your master Standard Selection Questionnaire document. Insurance certificates, Director CVs, two case studies (private-sector OK), banker's reference, modern slavery statement, accountant cash flow forecast. Save as a single shared folder. |
| Days 15-21 | Apply for one SSIP-recognised health and safety certificate (CHAS Standard, SafeContractor, or SMAS Worksafe Standard). Without one, most council tenders auto-fail you. Allow 2-4 weeks for the assessment. |
| Days 22-30 | Apply to your first Dynamic Market via the CDP. Pick one that maps to your geography and sector. Members-only call-offs are easier wins than open-procedure tenders. |
| Days 31-45 | Identify two below-threshold council contracts (£30k-£80k) in your patch. Read each spec end to end. Score yourself against the marking matrix before writing. |
| Days 46-60 | Submit one to two below-threshold bids. Pre-submission QA cadence: D-7 internal review, D-3 portal upload test, D-1 final QA. Final upload at least 24 hours before deadline. |
A realistic 60-day plan for a UK new business preparing to bid for its first government tender.
What to do this week¶
- Register on the Central Digital Platform via the Find a Tender Service. The registration is free and the data carries across every public bid.
- Pull your insurance schedule. Check public liability is at least £5m and employer's liability at least £10m. If lower, get a broker quote for the upgrade.
- Have your accountant draft a 12-month cash flow forecast template. You will reuse it on every bid that asks for evidence of financial standing.
- Apply for one SSIP scheme (CHAS Standard or SMAS Worksafe Standard, ~£345-£429 + VAT). Most council and NHS tenders auto-fail bidders without it.
- Find one Dynamic Market in your sector and apply this month. The application is free and you can stay a member for the whole life of the market.
Sources
- Procurement Act 2023 (legislation.gov.uk) · Live for new procurements from 24 February 2025; SME-friendly framework
- Transforming Public Procurement (Cabinet Office) · Buyer + supplier guidance on the new regime
- PPN 03/24: Standard Selection Questionnaire · Single supplier-information template; new-business evidence substitutes
- Find a Tender Service / Central Digital Platform · Where new businesses register and reuse data across bids
- Contracts Finder · Below-threshold tenders for English authorities (being consolidated into CDP April 2026)
- Modern Slavery Act 2015 (legislation.gov.uk) · £36m turnover threshold for mandatory statement; increasingly asked at lower turnover
- Company Directors Disqualification Act 1986 (legislation.gov.uk) · Director disqualification grounds; mandatory exclusion ground if any director is currently disqualified
FAQs
Frequently asked questions
- Yes, with realistic targeting. The Procurement Act 2023 (live 24 February 2025) is genuinely SME-friendly: Central Digital Platform once-only registration, 30-day prompt payment rule, below-threshold notifications from £12,000 (central government) and £30,000 (local councils), and Dynamic Markets that any SME can join from day one. The honest caveat is that the Standard Selection Questionnaire asks for two years of statutory accounts. New businesses use substitute evidence: cash flow forecasts, banker's references, parent-company or director guarantees, and insurance evidence to the contract value. Most first-year UK SMEs win their first government contract at the below-threshold level (£30,000-£100,000 council lots), then build up to frameworks and Dynamic Market call-offs.
- Not always. The Standard Selection Questionnaire under PPN 03/24 explicitly recognises that new businesses cannot provide two years of statutory accounts and allows substitute evidence. The four substitutes typically accepted are: cash flow forecast for the contract duration (signed off by your accountant), banker's reference letter on bank letterhead, parent-company guarantee or director personal guarantee, and insurance evidence to the contract value. Bring all four to your first SQ submission, not just the one the buyer asked for. Buyers reviewing a new-business bid look at how prepared you are, not just whether you tick a box.
- The UK government has a stated target that 33% of central government spend (direct + indirect) goes to SMEs. In practice, central government departments now publish their SME-spend rates in annual reports, and the Cabinet Office tracks compliance. For a new business, the practical effect is that contracting authorities are actively looking to award to SMEs where they can. It does not mean any SME automatically wins. It does mean that a credible SME bid against a credible large-firm bid increasingly tips toward the SME, especially on social value scoring (PPN 002, minimum 10% weighting from 1 October 2025) where local employment and supply-chain commitments score well.
- Free, in pure cash terms. Register on the Central Digital Platform via Find a Tender Service (free), set up saved searches in your sector and region (free), download relevant tender packs (free), bid below-threshold council contracts (free to bid). The first paid item most new businesses need is an SSIP-recognised health and safety certificate (CHAS Standard, SafeContractor, or SMAS Worksafe Standard at £345-£429 + VAT first year), which is a hard gate on most council tenders. After that, ISO 9001 (£3,000-£8,000 first year) becomes worth it once you are bidding contracts above £100,000. A specialist tender platform (£99-£499/month) earns back if you bid 6+ contracts a year and want qualification scoring before committing time.
- Five common ones. First, insurance shortfalls: most public-sector contracts require £5m public liability and £10m employer's liability minimum. Second, missing modern slavery statement (mandatory above £36m turnover under the Modern Slavery Act 2015 but often asked for below that, especially by NHS and council buyers). Third, unsigned self-declarations on the Standard Selection Questionnaire return automatic rejection. Fourth, late filing at Companies House (annual confirmation statement or accounts overdue) is a discretionary exclusion ground. Fifth, current or recent director disqualification under the Company Directors Disqualification Act 1986 is a mandatory exclusion ground; disclose it proactively if it applies. Lying about any of these triggers debarment under the Procurement Act 2023, which is the worst possible outcome.