Module 1: Scope, definitions and general principles

Question 1

What is the Procurement Act 2023 and why do we need it?

Accepted Answer

Prior to leaving the European Union (EU), the UK’s public procurement legislation mainly derived from EU directives, consisting of four separate sets of regulations and separate regulations application in Scotland: the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011. The UK’s exit from the EU provided an opportunity to create a simpler and more transparent system to better meet our needs. Scotland has decided to retain its existing regulations.

Previous Regulations	Procurement Act 2023 and relevant regulations to be made under the Act
• Public Contracts Regulations 2015 • Utilities Contracts Regulations 2016 • Concession Contracts Regulations 2016 • Defence and Security Public Contracts Regulations 2011	A single, uniformed framework for public procurement

Question 2

What are the main changes and benefits of the Procurement Act 2023?

Accepted Answer

Change: Four sets of regulations have been transformed into a simpler set of rules

Benefit: Improved clarity and consistency for contracting authorities no matter which sector they operate in.

Change: Procurement Act 2023 and relevant regulations to be made under the Act offer greater freedoms and flexibilities to design procurement processes.

Benefit: Allows contracting authorities to undertake procurement activities that are fit for purpose to meet organisational needs, as well as local and national objectives.

Change: Procurement Act 2023 and relevant regulations to be made under the Act will improve transparency

Benefit: Easier access to existing routes to market and market analysis data to help contracting authorities inform procurement strategies and decisions. Greater visibility of opportunities for businesses, and better scrutiny over where and how public money is being spent.

Change: The Procurement Act 2023 contains a number of benefits for SMEs and VCSEs and reflects the government’s commitment to removing barriers to new entrants accessing public contracts, either directly or indirectly as part of a supply chain.

Benefit: Increasing access to public contracts for SMEs and VCSEs and broadening the marketplace for contracting authorities.

Change: The Procurement Act 2023 and relevant regulations to be made under the Act strengthens the ability to exclude suppliers from procurements who are unfit to deliver public contracts, for example because of past misconduct, corruption or poor performance.

Benefit: better protects contracting authorities from suppliers who pose a risk to contract delivery including the protection of the public, the environment, public funds, national security and the rights of workers.

Change: The Procurement Act 2023 sets out a power to publish a national procurement policy statement (NPPS) and a Wales procurement policy statement (WPPS). Contracting authorities are required to have regard to the appropriate NPPS/WPPS (where one exists) when carrying out their procurement activities, which includes the setting of award criteria.

Benefit: The NPPS/WPPS will explain the government’s strategic priorities for public procurement and provide focus for contracting authorities and suppliers to deliver outcomes in these areas.

Question 3

Which contracts are covered by the Procurement Act 2023?

Accepted Answer

Generally the provisions in the Procurement Act 2023 must be applied to a “covered procurement”. A covered procurement is the award, entry into and management of a public contract. A public contract is a contract of a particular type that is above the relevant threshold (for goods, services and works) and which is not an exempted contract.

However, some rules in the Procurement Act 2023 must be applied to procurements not caught by the definition of “covered procurement” and that is why there is a wider definition of “procurement” (the award, entry into and management of a contract), which means any procurement. This allows some limited rules for contracts not caught under the definition of “covered procurement”, such as below-threshold procurements; this is to ensure we comply with certain treaty obligations.

Question 4

Exempted contracts

Accepted Answer

An exempted contract is a contract of a kind listed in Schedule 2 to which the Act generally does not apply. Exempted contracts are not covered by the Act when it refers to “covered procurement”. Exempted contracts are covered by the Act when it refers to “procurement”, for example in relation to the National Procurement Policy Statement (NPPS) at section 13 (which may or may not apply, depending on the requirements of the NPPS itself). In this learning manual, when we talk about contracts being exempt from the Act, this is a reference to the general position - i.e. in relation to covered procurement.

Part 1 describes the contracts that are exempt from the Act due to the nature of the relationship between the contracting parties. These are referred to as “counterparty exempted contracts” for example a contract (vertical arrangement) between a local authority and a company that it controls provided the requirements of paragraph 2 of Part 1 are met. Part 2 describes the contracts that are exempt from the Act due to their subject matter e.g. contracts for the purchase of arbitration, mediation or conciliation services and other similar services.

It should also be noted that the Procurement Act 2023 will not apply to procurements that are subject to the Health Care Services (Provider Selection Regime) Regulations 2023 - see regulation 49 of the Procurement Regulations 2024.

Question 5

Other exemptions

Accepted Answer

There are exemptions where certain rules do not apply to particular contracts, for example, in some instances for special regime contracts.

A special regime contract means:

a concession contract;
a defence and security contract;
a light touch contract; or
a utilities contract.

An example of this is that section section 51(1) does not apply to light touch contracts.

Question 6

Concession Contracts

Accepted Answer

Concession contracts are no longer subject to a separate regime and the main rules of the Act apply to them. Whilst the threshold remains significantly higher for concession contracts, contracting authorities must follow the requirements of the Act, including those relating to procedures and transparency, except from some differences and exemptions which can be found here.

Question 7

Defence and Security Contracts

Accepted Answer

Defence and Security contracts have also been incorporated into the main rules of the Act with some exemptions. Further detail on this can be found in the Defence and security summary document.

Question 8

Utilities Contracts

Accepted Answer

Utilities contracts are also no longer procured under a separate regime and have also been incorporated into the rules of the Act, with some exemptions. Further detail on this can be found in the Utilities summary document.

Utilities contracts are contracts for the supply of goods, services or works wholly or mainly for the purpose of utility activities.

Question 9

Light Touch and Healthcare Contracts

Accepted Answer

Light Touch is no longer a separate regime and has also been incorporated into the main rules of the Act with some exemptions. Further detail on this can be found in the Light touch summary document.

Question 10

Who should follow the rules set out in the Procurement Act 2023?

Accepted Answer

All entities that fall under the definition of “contracting authority” will be subject to the rules set out in the Procurement Act 2023, although some exemptions apply, which will be identified and explained in the relevant sections. The Act defines a contracting authority as either a public authority or, in the case of a utilities contract, a public authority, public undertaking or private utility, other than (in each case) an excluded authority. There is no intended change to the scope of the entities that are covered by the Procurement Act 2023 from the previous regimes, but entities should make sure to consider their status, particularly those with a fluctuating status.

Question 11

Does this apply to the whole of the UK?

Accepted Answer

The Procurement Act 2023 applies to contracting authorities in England, Wales, Northern Ireland and to contracting authorities with reserved functions carrying out procurement in Scotland. Just as some exemptions that apply to certain contracts there are also some exemptions that apply to certain authorities. Some devolved Welsh and transferred Northern Ireland procurements are exempt from a small number of requirements of the Procurement Act 2023. These exemptions can be found in the following documents:

Wales exemptions fact sheet

Northern Ireland exemptions fact sheet

Scotland will maintain its own procurement legislation which will apply to devolved Scottish authorities. The Procurement Act 2023 ensures we can continue to jointly procure goods, works and services where UK authorities are governed by different regimes and the regulations will allow Scottish contracting authorities to make use of frameworks and dynamic markets established under the Act. The Procurement Act 2023 gives Scottish Ministers the power to disapply devolved Scottish regulations in respect of a devolved Scottish authority procuring under the Act. If a contracting authority operates in Scotland and elsewhere in the UK, and is undertaking a procurement where its function relates to reserved matters, then the Procurement Act 2023 will apply.

Where joint or cross-border procurement is being undertaken there are key things contracting authorities need to be aware of to understand which regulations apply to that particular procurement. For example, which contracting authority is leading the procurement, and whether their functions are reserved, devolved/transferred or a mixture of both.

Other excluded authorities include:

1. the Security Service, the Secret Intelligence Service and the Government Communications Headquarters;

2. the Advanced Research and Invention Agency;

3. any person that is subject to public authority oversight—

(i) only by reference to a devolved Scottish authority, or
(ii) by reference to an authority mentioned in bullets 1 and 2.

Question 12

What about suppliers?

Accepted Answer

Contracting authorities must comply with the Procurement Act 2023, and both UK and treaty state suppliers (those entitled to the benefits of an international agreement to which the UK is a party) can bring civil proceedings under the remedies regime if they have suffered, or are at risk of suffering, loss or damage as a consequence of a contracting authority failing to comply with their obligations. Information about these remedies can be found in summary document 8 Remedies, procurement oversight and the debarment list

Section 19 (3) (b) does allow tenders to be disregarded from a supplier that:

(i) is not a United Kingdom supplier or treaty state supplier, or
(ii) intends to sub-contract the performance of all or part of the contract to a supplier that is not a United Kingdom supplier or treaty state supplier

Question 13

How to stay compliant

Accepted Answer

Contracting authorities must ensure they are familiar with the obligations set out in the Procurement Act 2023 as soon as they become aware they have to carry out a procurement. For example, this would include informative processes like pre-market engagement where they would need to have regard for the procurement objectives in choosing how and who to engage with. Also when drafting the contract scope, award criteria and KPIs, consideration needs to be given to things like the National Procurement Policy Statement (NPPS) or the Wales Procurement Policy Statement (WPPS).

The obligations set out in the Procurement Act 2023 do not cover very early stages when contracting authorities have not yet decided that they intend to award a contract, for example when they still have a number of potential avenues open to delivering their requirements and are still at the stage of forming initial views on issues such as ‘make vs buy’.

Question 14

Thresholds

Accepted Answer

The Procurement Act 2023 has certain obligations that are triggered at set financial thresholds. The threshold (for goods, services and works) which determine whether a procurement is a covered procurement and therefore bound by the main provisions of the Procurement Act 2023 is set out in the table below (as of January 2024) and can be found in Schedule 1 to the Procurement Act (the amounts set out in Schedule 1 will be updated when the Act comes into force to reflect the thresholds that came into force on 1 January 2024). The thresholds include VAT and are revised every two years (they may also need revising in the interim if the UK has a VAT rate change).

There are a number of thresholds to consider, the main ones being the threshold that applies to the procurement of goods and services by central government authorities (currently £139,688), another for the procurement of goods and services by sub-central authorities such as local government and wider public sector bodies (currently £214,904). Also the ‘works’ threshold (currently £5,372,609) which is the same regardless of whether the body is a central government authority or sub-central authority (this is not a term which is defined in the Act, but is used to refer to bodies which are not central government authorities).

Central government authorities include the Crown and each of the entities (and their successors) listed in columns 1 or 2 of the Table in Schedule 2 to the Procurement Regulations 2024. This list will be updated from time to time.

To note: A contract is a “works contract” if its main purpose is— (a) the carrying out of works under the contract (whether or not resulting in a complete work), or (b) to facilitate the carrying out of works otherwise than under the contract, where those works are intended to result in a complete work that complies with specifications set out in, or determined under, the contract.

“Works” means the activities which fall within the CPV codes listed in Schedule 3 to the Procurement Regulations 2024.

Type of contract	Threshold amount (including VAT) as of January 2024
Defence and Security “works contract” (i.e. “construction services”)	£5,372,609
Defence and Security contract which is not a works contract, a concession contract or a light touch contract (i.e. “Goods”, “Services”)	£429,809
“Works contract” (i.e. “construction services”)	£5,372,609
Central government non-works contract (i.e. “Goods”, “Services”)	£139,688
Sub-central government non-works contract (i.e. “Goods”, “Services”)	£214,904
Light touch contract (not a Utility or Concession)	£663,540
Utility “works contract” (i.e. “construction services”)	£5,372,609
Utility non-works contract (i.e. “Goods”, “Services” and Utilities concession contract)	£429,809
Utility light touch contract	£884,720
Concession contract (Including light touch, Defence and security but not Utility)	£5,372,609

Question 15

Below Threshold procurements

Accepted Answer

Contracts that are below the thresholds set out in Schedule 1 to the Procurement Act 2023 are known as “below-threshold contracts”. Below-threshold contracts fall under the wider definition of “procurement”. Below-threshold contracts except for those in the list below, are known as “regulated below-threshold contracts”, and are subject to a limited number of obligations under Part 6 of the Act, sections 84 to 88.

The following contracts and procurements are not “regulated below-threshold contracts” and therefore not subject to the below threshold obligations.

an exempted contract.
a concession contract.
a utilities contract.
“procurement” by a school.
“procurement” by a transferred Northern Ireland authority, unless it is under a reserved procurement arrangement or a devolved Welsh procurement arrangement;.
“procurement” under a transferred Northern Ireland procurement arrangement.

Question 16

What does this mean for “regulated below-threshold contract” procurements?

Accepted Answer

Contracting authorities must:

Before inviting the submission of tenders, have regard to the fact that small and medium-sized enterprises may face particular barriers in competing for a contract, and consider whether such barriers can be removed or reduced.

Not restrict the submission of tenders using an assessment of a supplier’s suitability to perform the contract^{[footnote 1]} e.g. their legal and financial capability or their technical ability (with the exception of works contracts above £138,760 for central government or above £213,477 for others).

Where the procurement is for a “notifiable below-threshold contract” (see definition below), publish a below-threshold tender notice before advertising the procurement opportunity on other platforms^{[footnote 2]}. Any time limits must be reasonable, and the same for all suppliers.

A “notifiable below-threshold contract” is a regulated below-threshold contract with an estimated value that equals or exceeds (including VAT) the following values

(i) Central government contracting authority: £12,000; or
(ii) Other contracting authorities: £30,000

The below threshold tender notice must set out^{[footnote 3]} :

the subject matter and description of the requirement.
estimated value.
an explanation of the criteria against which the award of the contract will be assessed.
how tenders may be submitted and the date by when they must be submitted
Any other relevant information

Publish a contract details notices as soon as reasonably practicable after entering into a notifiable below-threshold contract

The contract details notice for below threshold contracts must set out^{[footnote 4]}:

the subject matter of the contract.
the successful supplier(s) details including Lots awarded where applicable.
a description of any options in the contract.
the estimated value of the contract.
Any other information you think is relevant

Be aware of Section 88 Regulated below-threshold contracts: implied payment terms.

Key changes from PCR 2015 to below threshold obligations

1. New requirements to have regard to small and medium-sized businesses and whether barriers can be removed or reduced.

2. Publication of notifiable below-threshold contract opportunities should be made using a below threshold tender notice on the transparency platform instead of an opportunity notice on Contracts Finder.

3. Where a contracting authority wishes to advertise a below-threshold opportunity, they must publish it on the central platform before any other medium.

4. Publication of notifiable below-threshold contract awards should be made using the contract detail notice on the transparency platform instead of placing an awarded opportunity notice on Contracts Finder.

5. 30 days payment terms are now implied into every regulated below-threshold contract (see summary document 9 Contract Governance for further details).

6. The Procurement Act 2023 introduces new rules that enable contracting authorities to modify regulated below-threshold contracts where the modification would take the value of the contract above the relevant threshold. These are known as “convertible contracts”. A modification which would bring the value of a contract above the relevant threshold is only permitted under the same grounds that apply to all above-threshold contracts, as detailed in summary document 9 Contract Governance. Once the modification has taken place, the full scope of the regulations will apply to the amended contract. A below-threshold contract can be modified in any way if the effect of that modification will be that the value of the contract remains below the relevant threshold.

7. Local government and other authorities that are subject to the Local Government Act 1988 may now reserve competitions for below-threshold contracts to suppliers that are UK-based or located in a specific county or London borough. Under the previous regime, only central government departments (plus their executive agencies and non-departmental public bodies) were able to take advantage of this policy.

How to stay compliant

1. Publish a below threshold tender notice on the central digital platform before advertising by any other means (unless advertising from pre-selected suppliers list e.g. frameworks).

2. Do not restrict tenders based on a supplier’s suitability to perform e.g. no conditions of participation stage (previously known as selection stage) unless the exception for works contracts applies.

3. Consider if there are any barriers for small and medium-sized enterprises and how any such barriers can be removed or reduced.

4. Set out reasonable time limits that are the same for all suppliers.

5. Publish a contract details notice as soon as reasonably practicable (this is the contracting authority’s judgement and best practice is 30 days for central government, 90 days for others and 120 days for light touch contracts) after entering into a contract.

6. Comply with the 30 days payment terms.

7. Do not use convertible contract modifications as a way to avoid the regulations by procuring below-threshold contracts where it would be reasonable to expect the value may increase to above the relevant threshold.

8. Keep a record of all procurement decisions (including considerations of obligations for example consideration of barriers for SMEs).

Previous Regulations (PCR 2015 chapter 8 below threshold contracts)	New Requirements (below threshold contracts)
Publication requirements applied to In-Scope organisations above the following thresholds: • central government authorities, where the contract value is at least £12,000 (inc VAT); and • sub-central contracting authorities and NHS Trusts and Foundation Trusts, where the contract value is at least £30,000 (inc of VAT).	Publication requirements apply to all CA for notifiable below-threshold contracts which have a value of not less than: Central government authority: £12,000 (inc. VAT); or Other contracting authorities: £30,000 (inc. VAT)
Publication of an opportunity notice on Contracts Finder must be with 24 hours of any other advertisements of any other platforms (and attached tender docs if central government authorities)5	Publication of a below threshold tender notice on the central platform must happen before any other advertisements on any other platforms
Publish required details in awarded opportunity notice on Contracts Finder (and attached contract docs if central government authorities)6	Publish required details in contract detail notice on the transparency platform
N/A	Section 74: Modifying a public contract A below-threshold contract may be modified in any way if the result of that modification is that the value remains below the relevant threshold. If, as a result of the modification, the value of the contract will exceed the relevant threshold, the contract may only be modified in a way which is permitted by the Act and would then be subject to the general requirements of the Act.
N/A	Section 88. Regulated below-threshold contracts: Implied payment terms New provision that means a term requiring the payment of invoices within 30 days is implied into all regulated below-threshold contracts.

1) Policy requirement see PPN 01/23.
2) Expected to be an ongoing policy requirement see PPN 01/23.

3. Procurement Principles and Objectives

The Procurement Act introduces new procurement objectives that apply to covered procurement.

Previous Regulations (PCR2015)	Procurement Act 2023
Principles of procurement • non-discrimination, • equal treatment, • proportionality, • mutual recognition • transparency	Section 12 Covered procurement: objectives Have regard to: • delivering value for money; • maximising public benefit; • sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions; • acting, and being seen to act, with integrity. • have regard to the fact that small and medium-sized enterprises may face particular barriers to participation, and • consider whether such barriers can be removed or reduced. Must: • treat suppliers the same unless a difference between the suppliers justifies different treatment, and • if different treatment is justified, not put a supplier at an unfair advantage or disadvantage.

When carrying out any procurement-related activity on a covered procurement contracting authorities must have regard to certain objectives and must treat suppliers equally. Contracting authorities can decide how the “have regard to” objectives are considered, if or how they are weighted and what actions they need to take. As with the previous principles there are no minimum requirements on the actions to be taken in applying those objectives, although they should not be outright ignored. They are there to be influencers rather than gatekeepers and support best practice within the procurement exercise. However it may be useful for contracting authorities to record how they have taken the objectives into consideration during procurement decisions throughout the procurement lifecycle and store these with the other procurement records. When complying with the obligation to treat all suppliers the same unless different treatment is justified, contracting authorities must take reasonable steps to ensure that different treatment does not put a supplier at an unfair advantage or disadvantage.

Delivering value for money

Although this is not a new concept, the value for money objective encourages contracting authorities to consider further what value means to their organisation and the community it serves, and how they can get the best mix of economy, efficiency and effectiveness that achieves the intended outcome over the whole lifetime of the contract.

Maximising public benefit

The public benefit objective encourages contracting authorities to think about the extent to which their contracts can deliver greater benefit, for example by collaborating with other contracting authorities for a common purpose to reduce resource implications and costs, or considering social value or environmental benefits that could be achieved by the contract.

Transparency is still a key consideration. The sharing information objective requires contracting authorities to share information for the purpose of allowing suppliers and others to understand their policies and decisions relating to procurements. This is in addition to the wider transparency obligations that have been embedded throughout the Procurement Act through clear publication requirements designed to ensure an approach of “transparency by default” and deliver greater transparency than any duty to have regard.

Example

A contracting authority is expected to keep suppliers reasonably informed of their progress in a competitive tendering procedure, including providing prompt notification and explanation of any decision to remove a supplier from the procedure.

Integrity

The acting, and being seen to act, with integrity objective will help in the fight to prevent fraud and corruption. Being able to demonstrate this objective through good management, prevention of misconduct, and having full control over processes is key to strengthening trust with suppliers and the general public.

Example

Public procurement must promote good governance, sound management of public money, and a professional relationship between contracting authority and supplier, by for example managing conflicts of interest, protecting intellectual property, copyrights and confidential information or other standards of professional behaviour.

Treat suppliers the same

Contracting authorities are required to treat suppliers the same unless a difference between the suppliers justifies different treatment.

Example

When a contracting authority sets a deadline for submission of tenders they should not accept a late tender from one supplier but not from others. This would be a breach of equal treatment and also applies to other procedural requirements such as other deadlines, word limits, minimum quality or quantity standards etc.

Alternatively, where an incumbent supplier is bidding again for its replacement contract, (and so will inevitably have an advantage over other tenderers due to their experience in the current contract) the contracting authority must consider how this incumbent advantage can be managed to ensure all suppliers have an equal footing to win the replacement contract. In this case, different treatment intended to neutralise the advantage enjoyed by the incumbent may be justified, and can be achieved for example by providing additional information on the contract specification. However, a lower risk alternative would be to provide the additional information to all suppliers (ie including the incumbent).

Do not put a supplier at an unfair advantage or disadvantage

If different treatment of suppliers is justified, contracting authorities must take the appropriate steps to ensure they do not put a supplier at an unfair advantage or disadvantage.

Example

Where a potential conflict of interest does seem likely to benefit one or a few of the suppliers but not all, then the contracting authority must take steps to level the playing field. Transparency and informing the suppliers of the same information, or disclosing the current supplier name may be acceptable means of countering the potential problem. Each procurement scenario should consider the best mitigation under the circumstances during and from early engagement through to award recommendation.

Have regard to small and medium-sized enterprises (SMEs

This objective encourages contracting authorities to specifically consider their requirements from an SME perspective, for example by reducing processes which are disproportionately burdensome on SME suppliers or transfer unfair levels of risk to the suppliers.

Example

Consider whether the tender period is realistic when some businesses do not have dedicated tendering teams and small businesses are less likely to be able to respond to procurement processes with short timelines. This potential barrier to an SME could be removed or reduced by adding an extra 10 days onto the minimum time limit for return of tenders for all suppliers to ensure that small businesses are not disadvantaged. This would be consistent with the requirement to treat suppliers the same because although the tendering period is longer to enable higher levels of participation of more diverse suppliers, such as SMEs, there is no actual disparity of treatment.

National Procurement Policy Statement

The Procurement Act 2023 sets out a power for Ministers to publish a national procurement policy statement (NPPS) and for Welsh Ministers to publish a Wales procurement policy statement (WPPS), which along with the procurement objectives will set out the national strategic priorities for public procurement.

The NPPS will set out the current strategic priorities for public procurement and how contracting authorities in England (and those exercising non-devolved functions in Wales and Northern Ireland or procuring under a reserved procurement arrangement) can support their delivery. Contracting authorities are required to have regard to the relevant priorities in the NPPS, alongside other local priorities, when carrying out procurements.

The WPPS will set out the strategic direction for public procurement in Wales. It will set out principles, considerations and intended outcomes that devolved Welsh authorities will have to have regard to whilst undertaking public procurements.

The NPPS and the WPPS will give suppliers greater visibility of the national priorities that should be considered by contracting authorities when undertaking procurement. Where relevant to the specific contract, these priorities will be clearly set out in the tender documents. Policy matters likely to be addressed by the NPPS and WPPS include social value priorities. Inclusion in the NPPS allows for further development and guidance surrounding implementation of these priorities over time.

The NPPS and the WPPS may be amended or replaced at any point following appropriate consultation and parliamentary or Senedd scrutiny.

Northern Ireland will continue to implement public procurement policy through Procurement Policy Notes alone.

The NPPS does not apply:

to private utilities;
when awarding a contract:

a. in accordance with a framework; or

b. by reference to suppliers membership of a dynamic market;

to devolved Welsh procurement arrangements; or
to a devolved Welsh authority or transferred Northern Ireland authority, except in relation to a reserved procurement arrangement

The WPPS applies to:

a devolved Welsh authority, except in relation to procurement under a reserved.procurement arrangement or transferred Northern Ireland procurement arrangement; and
a contracting authority other than a devolved Welsh authority in relation to procurement under a devolved Welsh procurement arrangement.

Under the authorities listed above the WPPS does not apply:

to private utilities; or
when awarding a contract:

a. in accordance with a framework; or

b. by reference to suppliers membership of a dynamic market.

Pipeline Notice

Change: The publication of the pipeline notice is mandatory for contracting authorities where their spend is estimated to be more than £100M in the year.

Benefit: Better visibility of procurement plans will increase collaboration opportunities with other authorities. It will allow suppliers to better plan their resources which should increase the number of appropriate suppliers tendering for contracts.

Contracting authorities with an estimated spend of £100 million or more on “relevant contracts” in the coming financial year are required to publish a pipeline notice. “Relevant contracts” are all contracts other than those which are exempted (including below threshold contracts). The purpose of the pipeline notice is to provide the market with advance notice of anticipated public contract opportunities with an estimated value of more than £2 million which a contracting authority expects to commence (by publishing a tender or transparency notice) during the 18 months following the 1st April each year. This gives suppliers the opportunity to track potential opportunities, enabling them to determine if they wish to tender. This will be of particular benefit to small and medium-sized enterprises (SMEs) and voluntary, community and social enterprises (VCSEs) by providing them with time to plan for future work, ensuring a competitive and vibrant market.

Timescales for publishing pipeline notices.

Contracting authorities have 56 days to publish their pipeline notice for the next 18 months following the 1st April each year. In the first year of the Act’s operation, the period which the notice must cover will be the twelve months beginning with the 1 April following the day on which theProcurement Act 2023 comes into force.

Private utilities and transferred Northern Ireland authorities are not required to publish a Pipeline Notice.

What information needs to be in the pipeline notice?

The pipeline notice must set out:

nature of what is to be procured;
when it is expected to be advertised; and
any other information that is relevant.

Contracting authorities will not be held to any information they provide in the pipeline notice but any significant changes to the information published should be updated as and when appropriate.

FAQs re pipeline notices

Question: What if there is no budget available yet?

Answer: The pipeline notice should include knowns as well as aspirational procurements, as there is no commitment to procure anything published in the pipeline notice

Question: If no project value is available yet, how should we determine whether a pipeline notice is required?

Answer: Use an estimated figure based on previous similar procurements or research the market to get a typical benchmark. Values, particularly some way before early engagement, do not need to be absolute, just reasonable given the information available at the time. The pipeline notice can be updated when the procurement and budget becomes more certain.

Conflicts of Interest

Change: The Procurement Act 2023 gives clearer instructions on how and when to undertake conflicts of interest checks, steps to mitigate and makes specific provision for the preparation of a conflicts assessment.

Benefit: Ensures greater focus and consistency when dealing with, and recording, conflicts of interest which may allow them to be identified and managed earlier in the procurement process and throughout.

Conflicts of Interest obligation

The principal obligation on all contracting authorities is to avoid conflicts of interest of individuals acting in relation to a procurement, including those who influence a decision made by or on behalf of a contracting authority in relation to a covered procurement, by identifying and mitigating any conflicts or potential conflicts of interest. This obligation starts when the need for a procurement is first identified and continues until either the contracting authority decides not to award the contract (that is, the procurement itself is terminated) or termination of any contract(s) signed as a result of the covered procurement.

Actual conflicts

An actual conflict may exist if:

a. an individual who is acting for or on behalf of the contracting authority has a personal, professional or financial interest (directly or indirectly) in the outcome of the procurement and has some influence over decisions made during the process. This includes an interest in a participating supplier such as owning shares in the company.

b. a Minister of the Crown, a Member of the Welsh Government or the First Minister, Deputy First Minister or a Northern Ireland Minister has a personal, professional or financial interest (directly or indirectly) in the procurement.

Where an actual conflict has been identified, the contracting authority must take all reasonable steps to ensure that the conflict does not put a supplier at an unfair advantage or disadvantage during the procurement.

The range of steps that could be taken to avoid actual conflicts is extensive and contracting authorities have discretion on how best to mitigate them on each individual procurement. Mitigation could include:

a. reassigning staff onto other projects;

b. reassigning staff so they have no influence over procurement decisions;

c. requiring a person to be removed from a suppliers bid team and advisory role (“ethical walls” are regularly used in large companies);

d. excluding suppliers from the procurement.

Suppliers must be excluded from procurements if they:

a. receive an unfair advantage which cannot be avoided; or

b. the supplier does not take steps that the contracting authority considers are necessary in order to ensure it is not put at an unfair advantage. This could include refusing to provide certain information, providing information in response to such a request which is not accurate or not putting in place ethical walls.

Potential conflicts

A potential conflict may arise where a public official has private interests which are such that a conflict of interest would arise if the official were to become involved in relevant (i.e. conflicting) official responsibilities in the future.

For example: A member of the commercial team’s spouse is the CEO/Director of a business that is in the process of acquiring ownership of another company. That company has recently submitted a tender.

Where a conflicts assessment (described below) identifies potential conflicts of interest, the contracting authority should implement a plan for monitoring and mitigating the risks to ensure they do not become actual conflicts of interest.

Perceived conflicts

It is critical for public trust that we are acting with integrity, spending public money responsibly and that suppliers will be treated fairly.

If a contracting authority is aware of circumstances that it considers are likely to cause a reasonable person to wrongly believe there to be a conflict or potential conflict of interest, then this should also be included in the conflicts assessment. It must also include details of any steps the contracting authority has taken or will take to demonstrate that no such conflict or potential conflict exists. The actions taken do not need to eradicate all doubt as to whether or not there is a conflict, but it does need to be sufficient to demonstrate to a reasonable person that there is no actual or potential conflict.

Examples for a perceived conflict could be that someone has been known to accept significant gifts or hospitality, this could create a perception of biassed decision-making even if the gift has no bearing on the decision.

The contracting authority has wide discretion as to what approach it takes to a perceived conflict e.g. recording or publishing information which demonstrates no actual conflict.

Conflicts assessment

A conflicts assessment is the recording of any identified conflicts or potential conflicts of interest and the plans to mitigate them. It should also include any perceived conflicts identified and what steps the authority has taken, or will take, to ensure that no actual conflict or potential conflict exists. A conflicts assessment should be proportionate to each procurement and therefore could be applied in a light touch way in relation to procurements which are small and/or have very little in the way of conflicts concerns.

How could you identify conflicts and potential conflicts?

A conflicts identification process could be implemented in many ways, from having a standard agenda item on a meeting in relation to the procurement where awareness of any forms of conflicts of interest are sought and recorded; being part of a commercial risk register or having a templated document that has to be completed and updated at each stage of the procurement process by everyone that has been identified as influencing the procurement process, those persons would include:

a. a person (including a minister) in a position that is likely to have direct influence over decisions made in the course of the procurement process;

b. a person in a position which still has some possibility of influence, but is more remote than that set out in paragraph a. AND has tried to exert some influence over the process; and

c. a supplier or other external body with an identified interest in the decisions in question.

If actual, potential or perceived conflicts are identified, the conflicts assessment must include details of:

a. those conflicts that have been identified; and

b. any steps taken or to be taken to mitigate to ensure it does not put a supplier at an unfair advantage or disadvantage.

A conflicts assessment may also note where no conflicts have been identified as respect relevant individuals, as a means of demonstrating that the duty to identify has been complied with.

Contracting Authorities must maintain and update the conflicts assessment as necessary throughout the course of the procurement and through the management of any resulting contracts. As the contracting authority obtains more information, makes more decisions about the procurement and is exposed to wider pressure and influence it should be adapting its assessment of and approach to conflicts. In practical terms this should not result in every new piece of information resulting in a review and update to the conflicts assessment, but at reasonable intervals, and upon the publication of specified notices (as set out below) it should be reviewed and revised as necessary.

At the point of publishing one of the following notices contracting authorities will be required to confirm that they have complied with the obligation to prepare a conflicts assessment, and have reviewed and revised the assessment as necessary (the conflicts assessment will not be published):

a. a tender notice;

b. a transparency notice;

c. a dynamic market notice in relation to the establishment of a dynamic market;

d. a contract details notice; and

e. a contract change notice.

Frameworks and Dynamic Markets Conflicts of Interest assessments

The conflict of interest provisions apply to all covered procurements. Where procurements are effectively split across multiple stages, for example frameworks and dynamic markets, the conflicts obligations set out above apply to all of those stages.

Example

When a contracting authority sets up a framework they need to comply with the conflicts obligations up to the point at which they award the framework and then maintain and update the conflicts assessments through the lifetime of the framework as required.

When call off contracts are procured under the framework the contracting authority (whether the contracting authority that set up the framework or a different contracting authority that is permitted to use the framework) will need to undertake a conflicts assessment specifically for that individual call off contract.

Recording and storing conflicts assessments

If the conflicts assessment has identified actual, potential or perceived conflicts it will also include mitigation steps. The conflicts assessment should be stored as a procurement record with the other procurement records.

4. Definitions

Term	Meaning	To note/simplified definition
below threshold contract	A contract with an estimated value (including VAT) of less than the threshold amount for the type of contract.	Not a covered procurement, but may be subject to obligations in Part 6 of the Procurement Act 2023
concession contract	a contract for the supply, for pecuniary interest, of works or services to a contracting authority where- (a) at least part of the consideration for that supply is a right for the supplier to exploit the works or services, and (b) under the contract the supplier is exposed to a real operating risk.	Concession contracts are regulated by the general rules of the Procurement Act 2023 with some differences and exceptions.
contracting authority	a public authority, or in the case of a utilities contract, a public authority, public undertaking or private utility, other than (in each case) an excluded authority.	All entities that are contracting authorities will be subject to the rules set out in the Procurement Act 2023. There is no change in intended scope of bodies covered in the previous regimes
covered procurement	the award, entry into and management of a public contract	Covered procurement refers to public contracts which are subject to the general rules of the Procurement Act 2023
defence and security contract	a contract for the supply of- (a) military equipment; (b) sensitive equipment; (c) goods, services or works necessary for the development, production, maintenance or decommissioning of military equipment or sensitive equipment; (d) logistics services relating to military equipment or sensitive equipment; (e) goods, services or works for wholly military purposes; (f) sensitive services or sensitive works; (g) goods, services or works that are otherwise relevant to the operational capability, effectiveness, readiness for action, safety or security of the armed forces. includes a framework for the future award of contracts for the supply of goods, services or works of a kind described in (a) to (g).	Defence and security contracts are regulated by the Procurement Act 2023 with some exemptions.
defence authority	a contracting authority specified in regulations made by a Minister of the Crown, if the Minister considers that the authority exercises its functions wholly or mainly for the purposes of defence or national security.	The Secretary of State for Defence, the Atomic Weapons Establishment PLC, the Oil and Pipelines Agency and the National Crime Agency satisfy the statutory requirements of the Act and are specified as defence authorities in regulations under the Act.
defence authority contract	a defence and security contract awarded by a defence authority.
devolved Scottish authority	functions are exercisable only in or as regards Scotland, and- (a) none of its functions relate to reserved matters, or (b) some of its functions relate to reserved matters and some do not	The obligations in the Procurement Act 2023 do not apply to devolved Scottish authorities except where a devolved Scottish authority carries out procurement under a reserved procurement arrangement, a devolved Welsh procurement arrangement or a transferred Northern Ireland procurement arrangement, and as part of that procurement arrangement a contract is to be awarded following a procedure or other selection process carried out- (a) jointly by that authority and one or more contracting authority which is not a devolved Scottish authority, or (b) by a centralised procurement authority or equivalent body.
devolved Welsh authorities	A contracting authority which is a devolved Welsh authority within the meaning given by section 157A of the Government of Wales Act 2006 is a devolved Welsh authority. A contracting authority that is a public undertaking or private utility is to be treated as a devolved Welsh authority for the purposes of this Procurement Act 2023 if- (a) it operates wholly or mainly in relation to Wales, and (b) its activities are wholly or mainly activities that do not relate to reserved matters. Otherwise, a contracting authority is to be treated as a devolved Welsh authority for the purposes of this Act if the authority’s functions- (a) are exercisable wholly or mainly in relation to Wales, and (b) are wholly or mainly functions that do not relate to reserved matters.
devolved Welsh procurement arrangement	A procurement arrangement is a devolved Welsh procurement arrangement if, as part of it, the contract is awarded- (a) in accordance with a framework awarded by a devolved Welsh authority, (b) by reference to a dynamic market established by a devolved Welsh authority, (c) following a procedure carried out by a centralised procurement authority which is a devolved Welsh authority, or (d) following a procedure in which a devolved Welsh authority is designated the lead authority in the tender or transparency notice.
estimated value	Contract value estimated in accordance with Schedule 3	Total estimated value, for the time being, of a contract including all available options (e.g.extensions) including VAT
excluded authority	(a) a devolved Scottish authority, other than where it carries out procurement falling within section 115A of the Act; (b) the Security Service, the Secret Intelligence Service and the Government Communications Headquarters; (c) the Advanced Research and Invention Agency; (d) any person that is subject to public authority oversight- (i) only by reference to a devolved Scottish authority, or (ii) by reference to an authority mentioned in paragraph (b) or (c).	The obligations in the Procurement Act 2023 do not apply to excluded authorities as they do not fall within the definition of a contracting authority
exempted contract	An exempted contract is a type of contract listed in Schedule 2 to which the Procurement Act 2023 generally does not apply.	Generally exempt from the Procurement Act 2023. “Covered procurement” does not include exempted contracts; “procurement” does include exempted contracts
framework	A “framework” is a contract between a contracting authority and one or more suppliers that provides for the future award of contracts by a contracting authority to the supplier or suppliers.	A contract with suppliers that provides for the award of future contracts (known as call-off contracts). The framework must set out certain information relating to the call-off contracts, such as the price payable under call-off contracts or the mechanism for determining this
light touch contract	a contract wholly or mainly for the supply of services of a kind specified in the Procurement Regulations 2024 schedule 1	The type of contracts that are classed as light touch contracts have broadly remained the same as those classed as light touch under the PCR 2015. Light touch contracts cover the following types of services: Health, social and related services Administrative social, educational, healthcare and cultural services Compulsory social security services Benefit services Other community, social and personal services including services furnished by trade unions, political organisations, youth associations and other membership organisations services Religious services Hotel and restaurant services Some legal services Other administrative services and government services Provision of services to the community Some prison related services, public security and rescue services Investigation and security services International services Postal services, and Miscellaneous services
National Security Unit for Procurement (NSUP)	National Security Unit for Procurement	A unit in the Cabinet Office to support coordination of national security assessments for exclusion and debarment decisions
private utility	a person that- (a) is not a public authority or public undertaking, and (b) carries out a utility activity.	Entities that carry out utility activities under a “special or exclusive right” in the relevant energy, water and transport sectors.
procurement	the award, entry into and management of a contract	Procurement (as opposed to covered procurement) refers to contracts (as opposed to public contracts) which are not subject to the general rules of the Procurement Act 2023, but may have some obligations that must be met to comply with certain treaties.
Procurement Review Unit (PRU)		A new team established in the Cabinet Office to exercise procurement oversight.
public authority	A person that is- (a) wholly or mainly funded out of public funds, or (b) subject to public authority oversight and (in each case) does not operate on a commercial basis (public oversight means subject to the management or control of- (i) one or more public authorities, or (ii) a board more than half of the members of which are appointed by one or more public authorities)	Public authorities are funded wholly or mainly out of public funds or subject to public authority oversight, and in each case do not operate on a commercial basis.
public contract	any contract for the supply, for pecuniary interest, of goods, services and works to a contracting authority, or any framework or concession contract, in each case which has an estimated value above an applicable threshold and is not an exempt contract.	An above threshold contract for goods, services or works that is not an exempted contract
public undertaking	a person that- (a) is subject to public authority oversight, and (b) operates on a commercial basis	Whilst public undertakings are subject to public authority oversight, unlike public authorities, they may operate commercially
regulated below-threshold contract	a below-threshold contract which is not- (a) an exempted contract, (b) a concession contract, or (c) a utilities contract.	Subject to obligations in Part 6 of the Procurement Act 2023
special regime contract	A “special regime contract” means- (a) a concession contract, (b) a defence and security contract, (c) a light touch contract, or (d) a utilities contract,	Mixed procurement rules determine which threshold applies and which rules a contracting authority must follow when procuring a contract or a framework that includes special regime elements.
threshold	The threshold amount for a contract of a type in accordance with schedule 1	Contracts with an estimated value of not less than the threshold amount for the type of contract is a public contract and subject to the main rules in the Procurement Act 2023
transferred Northern Ireland authorities	an authority is a “transferred Northern Ireland authority” if its functions- (a) are exercisable only in or as regards Northern Ireland, and (b) are wholly or mainly functions that do not relate to reserved or excepted matters (within the meaning given by the Northern Ireland Act 1998). A contracting authority that is a public undertaking or private utility is to be treated as a transferred Northern Ireland authority for the purposes of this Act if- (a) it operates only in or as regards Northern Ireland, and (b) its activities are wholly or mainly activities that do not relate to reserved or excepted matters
transferred Northern Ireland procurement arrangement	A procurement arrangement is a transferred Northern Ireland procurement arrangement if, as part of it, a contract is awarded- (a) in accordance with a framework was awarded by a transferred Northern Ireland authority, (b) by reference to a dynamic market established by a transferred Northern Ireland authority, (c) following a procedure carried out by a centralised procurement authority which is a transferred Northern Ireland authority, or (d) following a procedure in which a transferred Northern Ireland authority is designated the lead authority in the tender or transparency notice.
utilities contract	a contract for the supply of goods, services or works wholly or mainly for the purpose of a utility activity.	Utilities contracts are regulated by the procurement Act with some exemptions. Utility activities are set out in Part 1 of Schedule 4, subject to certain exceptions
utility activity	an activity that- (a) is specified in Part 1 of Schedule 4 (b) is not specified in Part 2 of Schedule 4, (c) is not carried out wholly outside the United Kingdom, and (d) in the case of an activity carried out by a person that is not a public authority or public undertaking, is carried out pursuant to a special or exclusive right.	Consult schedule 4 for utility activities, which generally relate to activities for the purpose of: gas and heat networks and supply; electricity networks and supply; drinking water networks and supply; public transport services; ports and airports; extraction of oil and gas and exploration for, or extraction of, coal or other solid fuels. Changes from UCRs 2016 Postal services are not covered by the Act as they are not covered by international agreements and it is considered that there is now sufficient competition in the postal services market.

5. Transitioning to the Procurement Act 2023

The intent is that the new procurement regime will cause as little disruption as possible for contracts already awarded under the old regulations or procurements that have started but not yet been awarded when the new regime comes into effect. Section 122 of the Procurement Act contains a power which allows transitional and saving provisions to be made. These provisions, found in the Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024, provides for procurements that have already started at the time the new regime commences to continue under the old regime. In addition, contracts that were procured under the old regime will continue to be managed under those rules.

When do you have to start using the new rules?

The rules under the Procurement Act 2023 have to be followed from the commencement date of the new regime for all new procurements.

The Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 will apply until the commencement date, at which point they will be revoked.

What about procurements started before the commencement date but not awarded yet?

Saving provisions will be included in secondary legislation, the Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024, meaning you will continue to apply the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 to procurements that started under these rules, irrespective of those regulations being revoked.

The saving provisions detail when a procurement is considered to have started under each set of the old regulations. Generally this will be when:

a notice for the purpose of inviting tenders, requests to be selected to tender or to negotiate, or requests to participate in relation to a contract or framework agreement has been published. This would usually be in the form of a Contract Notice^{[footnote 5]};
a contract or framework agreement has been entered into;
supplier(s) have been contacted to seek an offer or expression of interest in relation to a live contract or framework agreement;
a voluntary transparency notice has been published;
a below threshold contract opportunity has been published;
a Utilities Notice on the existence of a Qualification System that acts as a call for competition has been published under the UCR 2016;
a sub-contract Notice has been published under the DSPCR 2011.

What about call off contracts based on frameworks awarded under the old rules?

You will continue to apply the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 to frameworks awarded under these rules and to the call off processes under those frameworks until the termination of the last call off contract to finish as a result of an award made within the life of that framework.

What about dynamic purchasing systems awarded under the old rules?

You will continue to apply the Public Contracts Regulations 2015, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 to dynamic purchasing systems including the call off processes under those rules until the termination of the last contract awarded by reference to the DPS within its lifetime.

What about qualification systems awarded under the old rules?

You will continue to apply the Utilities Contracts Regulations 2016 to qualification systems including the call off processes under those rules until the end of the last contract awarded by reference to the QS within its lifetime or where it has an unlimited duration, the end of the last contract by reference to the QS before its termination.

FAQs

If a contracting authority has commenced or completed pre-market engagement under the old regime, but had not advertised prior to the new regime coming into force, they will not need to rewind the process and start the engagement over again, with a pre-market engagement notice. Instead, it will be able to explain the position on pre-market engagement in its tender notice.
If a contracting authority has published a Prior Information Notice without inviting expressions of interest or taking other steps outlined above which constitute the start of a procurement, then the contract must be procured under the new regime.
Under the new regime, a Payment Compliance Notice should be published, in accordance with section 69, within 30 days of the end of each six month period. However, it is expected that the digital capability to publish Payment Compliance Notices will not be available until later in 2025. As such, contracting authorities do not have to publish these notices until section 69 is commenced, which will be some time after the new regime comes into effect. However, it should be noted that the requirement to publish payment information in accordance with regulation 113(7) of the Public Contracts Regulations 2015 will continue in respect of contracts procured under the old regime.
It is also likely that the digital capability to publish information required under section 70 (information about payments under public contracts) and section 71 (assessment of contract performance) will not be available until later in 2025. These provisions will not be commenced until the capability is in place and therefore any relevant reporting will be delayed.

What about contract amendments to contracts awarded under the old rules?

Any contract amendments required after the commencement date are subject to the provisions in the old regime that regulate contract modifications and amendments.

What about new requirements in the Procurement Act 2023 that are not tied to the procurement process?

Where the changes are not tied to the process of an individual procurement, for example the publication of pipeline notices or the reporting of spend data, the obligations under the Procurement Act 2023 will start when the relevant section is commenced.

Can you delay starting a procurement because you want to wait for the new regime?

It depends on whether the delay of the procurement exercise requires an existing contract to be extended or not. If the tender is for a new requirement and the CA can cope with the delay then the delayed procurement could benefit from the additional flexibility provided by the new regime. However if a contract needed to be extended to cover the gap created by delaying the procurement then the existing contract can only be extended in accordance with the relevant modification provisions in the applicable set of old regime regulations.

1. Exemptions cheat sheet: Wales

This cheat sheet is a quick reference guide to all of the exemptions or differences for devolved Welsh authorities and procurements under a devolved Welsh procurement arrangement within the Procurement Act 2023.

A contracting authority which is a devolved Welsh authority within the meaning given by section 157A of the Government of Wales Act 2006 is a devolved Welsh authority.

A contracting authority that is a public undertaking or private utility is to be treated as a devolved Welsh authority for the purposes of this Procurement Act 2023 if:

a. it operates wholly or mainly in relation to Wales, and

b. its activities are wholly or mainly activities that do not relate to reserved matters

Otherwise, a contracting authority is to be treated as a devolved Welsh authority for the purposes of this act if the authority’s functions:

a. are exercisable wholly or mainly in relation to Wales, and

b. are wholly or mainly functions that do not relate to reserved matters

A procurement arrangement is a devolved Welsh procurement arrangement if:

a. the framework was awarded by a devolved Welsh authority

b. the dynamic market was established by a devolved Welsh authority

c. the centralised procurement authority that carried out the procedure is a devolved Welsh authority, or

d. a devolved Welsh authority is designated the lead authority in the tender or transparency notice

Scope, definitions and general principles

Regulated below-threshold contracts: procedure (sections 85 to 88)

A devolved Welsh authority (unless the contract is to be awarded as part of a procurement under a reserved procurement arrangement) or a procurement under a devolved Welsh procurement arrangement will not be prohibited from restricting the submission of tenders by reference to an assessment of a supplier’s suitability to perform the contract.

The national procurement policy statement (section 13)

The national procurement policy statement does not apply to:

a devolved Welsh authority, except in relation to procurement under a reserved procurement arrangement.

The Wales procurement policy statement (section 14) applies to procurement by a devolved Welsh authority or under a devolved Welsh procurement arrangement.

Transparency

A contracting authority is a “transferred Northern Ireland authority” if its functions:

a. are exercisable only in or as regards Northern Ireland, and

b. are wholly or mainly functions that do not relate to reserved or excepted matters (within the meaning given by the Northern Ireland Act 1998)

A contracting authority that is a public undertaking or private utility is to be treated as a transferred Northern Ireland authority for the purposes of this act if:

a. it operates only in or as regards Northern Ireland, and

b. its activities are wholly or mainly activities that do not relate to reserved or excepted matters

A procurement arrangement is a transferred Northern Ireland procurement arrangement if, as part of it, a contract is awarded:

a. in accordance with a framework was awarded by a transferred Northern Ireland authority

b. by reference to a dynamic market established by a transferred Northern Ireland authority

c. following a procedure carried out by a centralised procurement authority which is a transferred Northern Ireland authority, or

d. following a procedure in which a transferred Northern Ireland authority is designated the lead authority in the tender or transparency notice

Scope, definitions and general principles

The national procurement policy statement (section 13)

The national procurement policy statement does not apply to a transferred Northern Ireland authority except in relation to procurement under a reserved procurement arrangement. It does not apply to any other contracting authority carrying out a procurement under a transferred Northern Ireland procurement arrangement.

Pipeline notices (section 93)

The requirement to publish pipeline notices does not apply to a transferred Northern Ireland authority.

Below-threshold contracts (part 6 - sections 84 to 88)

Procurements by a transferred Northern Ireland authority are exempt from the rules governing regulated below-threshold contracts, unless it is a procurement under a reserved procurement arrangement or a devolved Welsh procurement arrangement.

Transparency

Pipeline notices (section 93)

The requirement to publish pipeline notices does not apply to a transferred Northern Ireland authority.

Contract details notices and publication of contracts (section 53)

The requirement to publish a copy of the contract where the estimated value of the contract is more than £5 million does not apply to a contract awarded by a transferred Northern Ireland authority (unless it is awarded under a reserved procurement arrangement) or a transferred Northern Ireland procurement arrangement.

Contract change notices (section 75)

The requirement to publish contract change notices does not apply to a transferred Northern Ireland authority unless the contract was awarded as part of a procurement under a reserved procurement arrangement or a devolved Welsh procurement arrangement, or to a contract which was awarded as part of a transferred Northern Ireland procurement arrangement.

As a result, the obligation to publish the modification in question (section 77) also does not apply.

This cheat sheet is a quick reference guide to the exemptions and differences for light touch contracts within the Procurement Act 2023.

Section 9 (light touch contracts) of the Procurement Act defines light touch contracts as contracts wholly or mainly for the supply of services of a kind specified in regulations. These “light touch services” are set out in Schedule 1 to the Procurement Regulations 2024, using common procurement vocabulary(CPV) codes. The scope of services that canbe procured using a light touch contract has broadly remained the same as those in the light touch regime under the PCR 2015. Table 1 of Schedule 1 to the Procurement Regulations 2024 specifies the general light touch services, which includes:

health, social and related services
administrative social, educational, healthcare and cultural services
compulsory social security services
benefit services
other community, social and personal services including services furnished by trade unions, political organisations, youth associations and other membership organisations services
religious services
hotel and restaurant services
legal services (not otherwise exempt under the act)
other administrative services and government services
provision of services to the community
prison related services, public security and rescue services (not otherwise exempt underthe act)
investigation and security services
international services
postal services, and
miscellaneous services

Table 2 of Schedule 1 to the Procurement Regulations 2024 specifies additional light touch services, but only where those services are supplied under certain defence and security contracts.

Scope, definitions and general principles

Thresholds (schedule 1) - schedule 1 of the act will be amended to reflect the currently in force thresholds set out here

Light touch contract £663,540.

Light touch contract that is a concession contract £5,372,609.

Utilities contract that is a light touch contract £884,720.

Scope of the Procurement Act

The Procurement Act 2023 will not apply to procurements that are subject to the Health Care Services (Provider Selection Regime) Regulations 2023.

Transparency

Transparency notices (section 44)

A transparency notice is not required when awarding a contract via a direct award on the ground of user choice.

Contract award notices (section 50)

A contract award notice is not required when awarding a contract via a direct award on the ground of user choice.

Contract details notices (section 53)

Contract details notices are required for light touch contracts, but there is a longer time period for these notices to be published - 120 days instead of 30 days.

Where the estimated value of the light touch contract is over £5 million, a copy of the contract must be published but there is a longer time period of 180 days instead of 90 days to publish.

A contract details notice is not required when awarding a contract via a direct award on the ground of user choice.

Assessment of contract performance (section 71)

The requirement to publish contract performance notices for poor performance or breaches of contract does not apply to light touch contracts.

Contract change notices (section 75)

The requirement to publish a contract change notice (or a copy of the amended contract) does not apply to light touch contracts.

Contract termination notices (section 80)

A termination notice is not required when the terminating contract was awarded via a direct award on the ground of user choice.

Procedures

Duty to consider lots (section 18)

The duty to consider lots is now also mandated for light touch contracts.

Time limits (section 54)

There are no minimum timescales for notices before or duration of tender process in light touch contracts.

Mixed Procurement: Special regime contracts(section 10)

Where a contract is not solely for light touch services, the mixed procurement special regime rules also need to be applied.

Direct Award Grounds (section 41 and schedule 5)

A new ground for user choice has been introduced to allow direct awards for user choice services which are:

services that are light touch as identified by the CPV codes,
for the benefit of a particular individual (enduser), and
services where the contracting authority would be legally required to consider the views of the end user, or their carers, in relation to the supply of services

To use this ground, you must meet the following conditions:

the end user or their carer has expressed a preference as to which supplier should provide the services or there is only one supplier capable of providing the service,

and

the contracting authority considers that a competitive tendering process would not be in the best interests of the end user

Transparency notices (section 44)

A transparency notice is not required when awarding a contract via a direct award on the ground of user choice.

Competitive flexible procedure

Time limits (section 54)

There are no minimum procurement time scalesfor light touch contracts.

Modifying a section 19 procurement (section 31)

For light touch contracts there is greater flexibility to make any necessary modifications to a procurement procedure which is underway. Section 31 (Modifying a section 19 procurement) allows modifications to be made, even if considered to be substantial, up until the final tender deadline. When making such modifications you:

should still have regard to the procurement objectives (see section 12) and consider revising any applicable timescales as a result of such modification (see section 54)
must also revise and republish the tender notice (and update any associated tender documents) if they are impacted by the modification or the revised timescales and
must also notify the participating suppliers of such changes at the same time, where a participation period applies (see section 54)

Reserving contracts to public service mutuals(section 33)

In respect of certain, specified light touch contacts, the ability to reserve contracts to qualifying public service mutuals has been retained as long as the contract term is for 5 years or less. To be a qualifying public service mutual, the organisation must not have entered into a reserved contract for the same kind of light touch services with the same contracting authority in the previous 3 years.

Where a contract is being reserved to a public service mutual, only the competitive flexible procedure can be used.

Table 1 in Schedule 1 to the Procurement Regulations 2024 specifies reservable light touch service by the letter “R” in column 3.

Frameworks and dynamic markets

Frameworks: Maximum term (section 47)

The maximum term does not apply to a light touch framework (the maximum terms under section 49 for open frameworks do apply).

Framework requirements (section 45)

If the framework is a light touch contract (i.e. the framework is wholly for the purposes of light touch services) it is permissible for contracting authorities to award a contract directly to a supplier without carrying out a competition.

Frameworks: competitive selection process(section 46)

These requirements under this section do not apply to a framework that is a light touch contract.

Supplier selection

Meaning of excluded and excludable supplier(section 57), and

Considering whether a supplier is excluded or excludable (section 58)

Exclusion grounds now apply in full to light touch contracts in the same way as other public contracts, meaning that contracting authorities awarding light touch contracts must now consider whether a supplier is an excluded or excludable supplier based on the exclusion grounds before assessing their tender.

Assessment and award

Award criteria (section 23)

Where the light touch contract is centred upona particular individual or service recipient (enduser), there are some additional flexibilities that can be considered to ensure the most appropriate outcome. Under section 23(6) of the Act there is the ability to consider certain views and needs of the end user/service recipient inthe award of contracts which are for the benefit of an end user/service recipient.

In such contracts the award criteria may also make reference to:

the views of the individual service recipient for whose benefit the service is being provided or of a person providing care to that individual service recipient in relation to:

a. who should supply the services, and

b. how and when they should be supplied;

the different needs of different service recipients;
the importance of proximity between the supplier and service recipients for the effective and efficient supply of the services

Contract award notices and assessment summaries (section 50)

Publishing a contract award notice does not apply in relation to a contract awarded based on the user choice ground.

Stands till periods on the award of contracts (section 51)

The stand still period does not apply to light touch contracts.

Contract details notices and publication of contracts (section 53)

For light touch contracts, the contract detail notice must be published within an extended timescale of 120 days rather than 30 days.

For light touch contracts over £5m, you must publish a copy of the contract within anextended timescale of 180 days rather than 90 days.

Contract details notices do not have to be published for a contract awarded based on the user choice ground.

Remedies, procurement oversight and the debarment list

Automatic suspension of the entry into or modification of contracts (section 101)

The automatic suspension of the entry into or modification of contracts only applies to light touch contracts when a voluntary stand still period is observed.

Post contractual remedies: set aside conditions(section 105)

Post contractual remedies: set aside conditions have the following considerations in the context of light touch contracts

“A required contract award notice was not published” [section 105(1)(a)] - this set aside condition is not applicable to direct awards made under the ground of ‘user choice,’ as the publication of a contract award notice is not mandatory.

“Contract was entered into or modified before end of any applicable standstill period)” [section105(1)(b)] - this will apply to light touch contracts where a voluntary standstill is notified in the contract award notice.

“In the case of a modification under section 74,the breach became apparent only on publication of a contract change notice” [section 105(1)(e)]- this is not applicable to light touch contracts as a contract change notice is not mandatory, although it would apply where a voluntary contract change notice is published.

Contract governance

Key performance indicators (section 52)

The requirement to set and publish key performance indicators does not apply to light touch contracts.

Assessment of contract performance (section 71)

Assessing and publishing performance information does not apply to light touch contracts (even if KPIs have been set). The requirement to publish information relating to a supplier breach or failure to perform the contract does not apply to light touch contracts.

Modifying a public contract (section 74)

This provides the ability for modifications to be made to light touch contracts during their term, without having to ensure one of the permitted grounds applies. This means substantial or above threshold modifications could be made(section 74(2)).

Contract change notices (section 75)

The requirement to publish a contract change notice before modifying a contract does not apply to a light touch contract.

Publication of modifications (section 77)

The requirement to publish a modified contractor modification does not apply to a light touch contract.

4. Exemptions cheat sheet: Defence and security

This cheat sheet is a quick reference guide to the exemptions and differences for defence and security contracts and contracting authorities within the Procurement Act 2023.

Section 7(1) “Defence and security contract” means a contract for the supply of:

a. military equipment

b. sensitive equipment

c. goods, services or works necessary for the development, production, maintenance or decommissioning of military equipment or sensitive equipment

d. logistics services relating to military equipment or sensitive equipment

e. goods, services or works for wholly military purposes

f. sensitive services or sensitive works;

g. goods, services or works that are otherwise relevant to the operational capability, effectiveness, readiness for action, safety or security of the armed forces

This definition also applies to frameworks for the future award of contracts for the supply of goods, services or works as described in points (a) to (g) above.

For more information on the scope of defence and security contracts, see the definitions of key terms (section 7(7)) in Appendix 1.

Section 7(4) “Defence authority contract” means a defence and security contract awarded by a defence authority.

Section 7(5) “Defence authority” is a contracting authority specified in regulations made by a Minister of the Crown (its functions must be wholly or mainly for the purposes of defence or national security).

Scope, definitions and general principles

Thresholds (schedule 1)

Note:

schedule 1 of the act will be amended to reflect the currently in force thresholds set out here
a contract that is a defence and security contract only by virtue of subsection 7(1) (g) is not to be treated as a defence and security contract for the purposes of schedule 1 (thresholds)

Defence and security works contracts or concession contracts - £5,372,609.

Defence and security goods and service contracts - £429,809.

Light touch contracts (including defence and security light touch contracts) - £663,540.

Exempted contracting authorities (schedule 2)

The following contracting authorities are fully exempt from the act:

The Security Service, the Secret Intelligence Service and the Government Communications Headquarters.

Exempted contracts (schedule 2)

The following contracting authorities are fully exempt from the act:

Contracts that the contracting authority determines should not, in the interests of national security, be subject to the Procurement Act
Contracts for the purposes of carrying out, facilitating or supporting intelligence activities
Contracts awarded in an international agreement relating to the stationing of military personnel
Contracts for the implementation of a joint project between the signatories to that agreement (e.g. a joint project for works and services with a host country under a Status of Forces Agreement.)
Defence and security contracts where:

a. the supplier is the government of another state or territory

b. the supplier is located outside the UK in an area where the armed forces

are deployed, and operational needs

require the contract to be awarded to that supplier

c. the supplier is located outside the UK in a state/territory where the armed forces maintain a military presence, and that state/territory requires the contract to be awarded to that supplier

d. it was awarded under a procedure

adopted by an international organisation of which the UK is a member

e. It was awarded under an arrangement between the UK and one or more

other states/territories, for the joint development and/or exploitation of a new product

Treaty state suppliers (schedule 9)

Because the defence and security contracts (other than those under section 7(1)(g)) are not included in the scope of any international agreements (as set out in schedule 9 of the act), contracts under this definition (section 7(1)) do not have to comply with the corresponding sections of the act that guarantees equal treatment for treaty state suppliers. Contracting authorities therefore have the discretion to exclude suppliers from outside the UK, Crown Dependencies and British Overseas Territories from a procurement process.

Transparency

Contract award notices and assessment summaries (section 50)

Publication of a contract award notice is not required for defence and security contracts awarded under a defence and security framework.

Contract change notices (section 75)

The requirement to publish a contract change notice (or a copy of the amended contract) does not apply to defence and security contracts.

Record-keeping (section 98)

The requirement to keep records of material decisions made during a procurement, including supplier correspondence, does not apply to defence and security contracts.

Procedures

Mixed procurement (section 10)

Where a mixed special regime procurement contains elements of defence and security then the mixed procurement may be treated as a defence and security contract where there are good reasons for not awarding separate contracts.

Direct award (schedule 5)

Additional grounds for direct award (set out in schedule 5 of the act) apply specifically to certain defence and security contracts:

for the supply of air or maritime transport to the armed forces / security services (either during or for the purpose of deployment), where the nature of the services means it is not possible to fix tenders for 10 days following submission
where, if treated as a modification to an existing contract, the award would result in the existing contract becoming “a qualifying defence contract” under the Defence Reform Act 2014
for most defence authority contracts where direct award is essential to enhance or maintain certain aspects of armed forces operations

Competitive flexible procedure

N/A

N/A

Frameworks and dynamic markets

Framework agreements: maximum term (section 47)

The maximum term for defence and security framework is eight years.

Supplier selection

Direct award and excluded suppliers (section 41)

Contracts may be awarded to an excluded supplier where there is “overriding public interest”

where it is needed to ensure the proper functioning of a sector on which the defence, security or economic stability of the UK relies
where failure to do so would put the functioning of military and security operations, the armed forces or intelligence services at risk

Assessment and award

Contract award notices and assessment summaries (section 50)

An assessment summary is not required for a defence and security contract awarded under a defence and security framework.

Contract award notices and assessment summaries (section 50)

A contract award notice is not required for the award of defence and security contracts under a defence and security framework.

Remedies, procurement oversight and the debarment list

N/A

N/A

Contract governance

Permitted contract modifications (schedule 8)

Additional grounds under which contract modifications may be made (set out in schedule 8 of the act) apply specifically to certain defence authority contracts:

to take advantage of developments in technology, or to mitigate against their adverse effects
modification is permitted to ensure the continuous supply of goods, works or services to maintain the operational capabilities, effectiveness, readiness for action, safety, security or logistical capabilities of the armed forces

Electronic invoicing (section 67)

A defence authority may require use of a particular system that requires the payment of fees by a supplier.

Contract change notices (section 75)

The publication of contract change notices, or copies of modified contracts, does not apply to defence and security contracts.

Appendix 1

Definitions of key terms in relation to defence and security contracts

The Procurement Act section 7(7)

“classified information” means information or other material which —

a. in the interests of national security, requires protection from unauthorised access, distribution, or destruction, or from other compromise, and

b. on the basis of those interests, has that protection under the law of any part of the United Kingdom;

“decommissioning”, in relation to equipment, includes —

a. withdrawal of equipment from use;

b. disposal or destruction of equipment;

“development”, in relation to equipment, includes —

a. research allowing for the development of equipment, and

b. development of industrial processes allowing for the production of equipment;

“equipment” includes any part, component or subassembly of equipment;

“maintenance”, in relation to equipment, includes —

a. repair of equipment;

b. modernisation of equipment;

c. modifications to equipment;

d. installing equipment, including after its transport to a new location;

e. testing equipment;

“military equipment” means equipment specifically designed or adapted for military purposes, including —

a. arms, munitions or war material, and

b. any of the military goods, software and technology the export or transfer of which is controlled by virtue of Schedule 2 to the Export Control Order 2008 (S.I. 2008/3231), as amended from time to time;

“sensitive equipment” means equipment for use for security purposes where —

a. the use or supply of the equipment may involve dealing with classified information,

b. the supply of the equipment requires access to a physical site or to other equipment as a result of which classified information is likely to be accessible to the supplier, or

c. the equipment contains classified information;

“sensitive services” means services performed for security purposes where performing the services —

a. involves dealing with classified information, or

b. requires access to a physical site or to equipment as a result of which sensitive equipment or classified information is likely to be accessible to the supplier, and includes the training of personnel to use sensitive equipment;

“sensitive works” means works undertaken for security purposes, where undertaking the works —

a. involves dealing with classified information, or

b. requires access to a physical site or to equipment as a result of which sensitive equipment or classified information is likely to be accessible to the supplier;

“supply”, in relation to equipment, other goods, services or works, includes the development of the equipment, other goods, services or works for the purposes of their supply to the contracting authority;

“wholly military purposes” include —

a. the transportation of military personnel or military equipment;

b. the training of military personnel;

c. the training of other personnel to use military equipment;

d. the construction of military facilities, including military airfields, military storage facilities or facilities for the maintenance of military equipment

5. Exemptions cheat sheet: Utilities contracts

A utilities contract is a contract for the supply of goods, services or works wholly or mainly for the purpose of a “utility activity”.

The Procurement Act Part 1 of Schedule 4 (utility activities) lists utility activities and Part 2 of Schedule 4 lists activities that are not, at a particular point in time, considered utility activities within the meaning of the Act. This largely mirrors the coverage of the UCR 2016 except for the removal of postal services entirely.

Part 1 utility activities are activities connected with the:

provision or operation of gas and heat, electricity and water networks and the supply to those networks;
provision or operation of public transport networks and the provision of ports and airports; and
extraction of oil and gas and exploration for, or extraction of, coal or other solid fuels

Scope, definitions and general principles

Thresholds (schedule 1) - schedule 1 of the act will be amended to reflect the currently in force thresholds set out here

Utility “works contract” (i.e. “construction services”) = £5,372,609

Utility non-works contract (i.e. “Goods”, “Services”) = £429,809

Utility light touch contract = £884,720

Concession contract (including light touch, Defence and security) = £5,336,937

Below-threshold contracts (part 6 - sections 84 to 88)

A utilities contract is exempt from the rules governing regulated below-threshold contracts.

Exempted contracts (schedule 2)

Paragraph 5 exempts utilities contracts awarded by a joint venture between utilities to one of those joint venture members, and vice versa.

Paragraph 6 exempts utilities contracts awarded by a utility to an affiliate and by a utility that is a joint venture to an affiliate of any member of that joint venture.

Paragraph 21 exempts contracts for public passenger transport services that are awarded under separate legislation - that legislation is specified at section 136(11) of the Railways Act 1993.

Paragraph 31 exempts utilities contracts awarded for the purpose of further sale or lease to third parties, provided the utility does not have a special or exclusive right to sell or lease the goods, services or works purchased and the market is open. Note, this does not apply where the utility is a centralised procurement authority.

Paragraph 32 exempts utilities contracts for the purchase of water by utilities carrying out

Paragraph 33 exempts utilities contracts for purchases of energy, or fuel for the production of energy, by utilities carrying out a utility activity in paragraphs 1, 2 or 6 of schedule 4 (gas and heat, electricity and extraction of oil and gas and exploration for, or extraction of, coal or other solid fuels).

Paragraph 34 operates to ensure that contracts for the purpose of the activities set out in part 2 of schedule 4 are exempt from the act.

Transparency

Tender notices and associated tender documents (section 21)

Where a utilities contract is to be awarded under a utilities dynamic market established by reference to a qualifying utilities dynamic market notice (see section 40) the tender notice is not published, but utilities must instead provide it directly to existing members of the market.

Electronic communications (section 96)

Electronic communications systems do not need to be free of charge and readily accessible to suppliers in relation to a utilities dynamic market. Note, see section 38(3) - fees may be charged in connection with obtaining and maintaining membership of a utilities dynamic market.

Procedures

Time limits (section 54)

No minimum timescales are mandated for tenders from “pre-selected suppliers” (i.e. suppliers that have been required to satisfy conditions of participation before submitting tenders or are members of a dynamic market) where the tendering period is agreed by all. In the absence of such agreement, the minimum timescale is 10 days.

Competitive flexible procedure

Time limits (section 54)

No minimum timescales are mandated for tenders from “pre-selected suppliers” (i.e. suppliers that have been required to satisfy conditions of participation before submitting tenders or are members of a dynamic market) where the tendering period is agreed by all. In the absence of such agreement, the minimum timescale is 10 days.

Frameworks and dynamic markets

Framework agreements: maximum term (section 47)

The maximum term for utilities framework is eight years. But may be longer if the contracting authority considers the nature of the goods, services or works to be supplied under the framework mean a longer term is required.

Dynamic markets: establishment (section 35)

Utilities can establish utilities dynamic markets established only for the purpose of the award of utilities contracts by utilities.

Qualifying utilities dynamic market notices: no duty to publish a tender notice (section 40)

Utilities that establish dynamic markets using a qualifying utilities dynamic market notice do not publish a tender notice for the purpose of inviting suppliers to submit a request to participate or tender; instead a tender notice must be provided to members of the market or appropriate part of the market.

Qualifying utilities dynamic market notices: no duty to publish a tender notice (section 40)

Where a qualifying utilities dynamic market notice has been used, you do not have to consider any applications for membership to the market from suppliers that wish to participate in a particular procurement being carried out under the utilities dynamic market.

Dynamic markets: fees (section 38)

Utilities dynamic markets may provide for the charging of fees to suppliers in connection with obtaining and maintaining membership of the market. They can not provide for charging fees to suppliers that are awarded a contract by reference to their membership of the utilities dynamic market.

Dynamic markets (including utilities dynamic markets) cannot generally be used to award regulated below-threshold contracts, as they cannot be restricted by reference to a supplier’s suitability (section 85(1)), and suppliers have already been assessed based on this to become a member of the dynamic market.

Dynamic markets cannot generally be used to award regulated below-threshold utilities contracts. Note, dynamic markets can be used to award works contracts above the values set out in section 85(3).

Supplier selection

N/A

N/A

Assessment and award

Contract award notices and assessment summaries (section 50)

An assessment summary is not required for a utilities (or other) contract awarded under a framework.

Remedies, procurement oversight and the debarment list

N/A

N/A

Contract governance

Contract modifications (Schedule 8 permitted contract modifications 4(2), 5(2) and 8(2))

The 50% financial cap on the value of permitted modifications does not apply if the contract being modified is a utilities contract.

6. Exemptions cheat sheet: Private utilities

This cheat sheet is a quick reference guide to the exemptions and differences for private utilities within the Procurement Act 2023.

Private utilities are other entities (i.e. not public authorities or public undertakings) that carry out a utility activity. Private utilities are only covered by the Procurement Act where they have been granted a special or exclusive right to carry out a utility activity.

It is not possible to have a definitive list of utilities as structures can be complex or change over time and whether an entity has been granted special or exclusive rights can change. Utilities will need to consider whether they are a public authority, public undertaking or private utility using the definitions in section 2(2) of the act.

The Procurement Act part 1 of schedule 4 (utility activities) lists utility activities and part 2 of schedule 4 lists activities that are not, at a particular point in time, considered utility activities within the meaning of the act. This largely mirrors the coverage of the UCR 2016 - except for the removal of postal services entirely.

Utility activities are activities connected with the provision or operation of networks that provide:

gas and heat
electricity
water
transport services (rail, tram, bus)
ports and airports
extraction of oil and gas and exploration for, or extraction of coal or other solid fuels 2 2

Scope, definitions and general principles

Thresholds (schedule 1) - schedule 1 of the act will be amended to reflect the currently in force thresholds set out here

Utility “works contract” (i.e. “construction services”) = £5,372,609

Utility non-works contract (i.e. “Goods”, “Services”) = £429,809

Utility light touch contract = £884,720

Concession contract (including light touch, Defence and security) = £5,336,937

Below-threshold contracts (part 6 - sections 84 to 88)

A utilities contract is exempt from the rules governing regulated below-threshold contracts.

The national procurement policy statement (section 13)

The duty to have regard to the national procurement policy statement does not apply to private utilities.

The Wales procurement policy statement (section 14)

The duty to have regard to the Wales procurement policy statement does not apply to private utilities.

Pipeline notices (section 93)

Private utilities are exempt from publishing pipeline notices.

Exempted contracts (schedule 2)

Paragraph 5 exempts utilities contracts awarded by a joint venture between utilities to one of those joint venture members, and vice versa.

Paragraph 6 exempts utilities contracts awarded by a utility to an affiliate and by a utility that is a joint venture to an affiliate of any member of that joint venture.

Paragraph 21 exempts contracts for public passenger transport services that are awarded under separate legislation - that legislation is specified at section 136(11) of the Railways Act 1993.

Paragraph 31 exempts utilities contracts awarded for the purpose of further sale or lease to third parties, provided the utility does not have a special or exclusive right to sell or lease the goods, services or works purchased and the market is open. This does not apply where the utility is a centralised procurement authority.

Paragraph 32 exempts utilities contracts for the purchase of water by utilities carrying out a utility activity in paragraph 3(1) of schedule 4 (provision or operation of a fixed network or the supply of drinking water to such a fixed network).

Paragraph 33 exempts utilities contracts for purchases of energy, or fuel for the production of energy, by utilities carrying out a utility activity in paragraphs 1, 2 or 6 of schedule 4 (gas and heat, electricity and extraction of oil and gas and exploration for, or extraction of, coal or other solid fuels).

Paragraph 34 operates to ensure that contracts for the purpose of the activities set out in part 2 of schedule 4 are exempt from the act.

Transparency

Pipeline notices (section 93)

Private utilities are exempt from publishing pipeline notices.

Preliminary market engagement notices (section 17) - the act will be amended to reflect changes made in the Procurement Regulations 2024

Private utilities are exempt from publishing preliminary market engagement notices.

Tender notices and associated tender documents (section 21)

Where a utilities contract is to be awarded under a utilities dynamic market established by reference to a qualifying utilities dynamic market notice (see section 40) the tender notice is not published, but utilities must instead provide it directly to existing members of the market.

Contract details notices and publication of contracts (section 53)

Private utilities are exempt from publishing contract details notices and copies of contracts.

Information about payments under public contracts (section 70)

Private utilities are exempt from publishing specified payment information where payments more than £30,000 are made under utilities contracts.

Key performance indicators (section 52)

Setting and publishing key performance indicators does not apply to a public contract awarded by a private utility.

Assessment of contract performance (section 71)

Assessing and publishing further information on key performance indicators does not apply to private utilities (even if KPIs have been set).

Contract change notice (section 77)

Publishing a copy of the contract as modified or the modification does not apply to a contract awarded by a private utility.

Contract termination notices (section 80)

Publishing a contract termination notice does not apply to private utilities.

Procurement termination notices (section 55)

Private utilities are exempt from publishing procurement termination notices.

Dynamic market notices (section 39)

The obligation to publish a dynamic market notice after a dynamic market ceases to operate does not apply to private utilities.

Electronic communications (section 96)

Electronic communications systems do not need to be free of charge and readily accessible to suppliers in relation to a utilities dynamic market.

Procedures

Vertical and horizontal arrangements (schedule 2)

Vertical and horizontal exemptions do not apply to private utilities or public undertakings. The joint venture and affiliated persons exemptions for utilities contracts provide a similar exemption for all utilities.

Preliminary market engagement notices (section 17) - the act will be amended to reflect changes made in the Procurement Regulations 2024

Private utilities are exempt from publishing preliminary market engagement notices.

Time limits (section 54)

No minimum timescales are mandated for tenders from “pre-selected suppliers” (i.e. suppliers that have been required to satisfy conditions of participation before submitting tenders or are members of a dynamic market) where the tendering period is agreed by all. In the absence of such agreement, the minimum timescales is 10 days.

Competitive flexible procedure

Time limits (section 54)

No minimum timescales are mandated for tenders from “pre-selected suppliers” (i.e. suppliers that have been required to satisfy conditions of participation before submitting tenders or are members of a dynamic market) where the tendering period is agreed by all. In the absence of such agreement, the minimum timescales is 10 days.

Frameworks and dynamic markets

Framework agreements: maximum term (section 47)

The maximum term does not apply to a framework awarded by a private utility - the maximum terms under section 49 for open frameworks do apply to utilities.

Dynamic markets: establishment (section 35)

Utilities can establish utilities dynamic markets established only for the purpose of the award of utilities contracts by utilities.

Qualifying utilities dynamic market notices: no duty to publish a tender notice (section 40)

Utilities that establish dynamic markets using a qualifying utilities dynamic market notice do not publish a tender notice for the purpose of inviting suppliers to submit a request to participate or tender; instead a tender notice must be provided to members of the market or appropriate part of the market.

Qualifying utilities dynamic market notices: no duty to publish a tender notice (section 40)

Where a qualifying utilities dynamic market notice has been used, you do not have to consider any applications for membership to the market from suppliers that wish to participate in a particular procurement being carried out under the utilities dynamic market.

Dynamic markets: fees (section 38)

Utilities dynamic markets may provide for the charging of fees to suppliers in connection with obtaining and maintaining membership of the market. They can not provide for charging fees to suppliers that are awarded a contract by reference to their membership of the utilities dynamic market.

Dynamic markets (including utilities dynamic markets) cannot generally be used to award regulated below-threshold contracts, as they cannot be restricted by reference to a supplier’s suitability (section 85(1)), and suppliers have already been assessed based on this to become a member of the dynamic market.

Dynamic markets cannot generally be used to award regulated below-threshold utilities contracts - dynamic markets can be used to award works contracts above the values set out in section 85(3).

Dynamic market notices (section 39)

The obligation to publish a dynamic market notice after a dynamic market ceases to operate does not apply to private utilities.

Supplier selection

Meaning of excluded and excludable supplier (section 57)

Private utilities have a wider discretion on whether to exclude excluded suppliers and should consider any reference to “excluded” suppliers as “excludable” suppliers.

Assessment and award

Procurement termination notices (section 55)

Private utilities do not have to publish a procurement termination notice.

Contract details notices and publication of contracts (section 53)

The requirements to publish a contract details notice and a copy of the contract does not apply to private utilities.

Standstill periods on the award of contracts (section 51)

The standstill periods do not apply to private utilities when the award is made under direct award in special cases (section 41) or switching to a direct award (section 43). A standstill period is also not required for a contract that is awarded in accordance with a framework, including a utilities framework, or by reference to a dynamic market, which includes utilities dynamic markets (including utilities dynamic markets established pursuant to a qualifying utilities dynamic market notice).

Contract award notices and assessment summaries (section 50)

An assessment summary is not required for a utilities (or other) contract awarded under a framework.

Remedies, procurement oversight and the debarment list

Procurement investigations (section 108)

A private utility is not considered a “relevant contracting authority” for the purposes of this section and as a result is not subject to procurement investigations under this section (although they may be required to have regard to guidance published following an investigation (see section 109)).

Contract governance

Contract change notices (section 75)

The requirement to publish a contract change notice before modifying a contract does not apply if the contract was awarded by a private utility.

Publication of modifications (section 77)

The requirement to publish a modified contract or modification does not apply if the contract was awarded by a private utility.

Key performance indicators (section 52)

The requirement to set and publish key performance indicators does not apply to utilities contracts awarded by a private utility.

Assessment of contract performance (section 71)

Assessing and publishing performance information does not apply to private utilities (even if KPIs have been set).

Information about payments under public contracts (section 70)

Private utilities are exempt from publishing specified payment information where payments more than £30,000 are made under utilities contracts.

Implied payment terms in contracts (section 68)

The 30 day implied terms are not implied in a utilities contract awarded by a private utility.

Implied payment terms in sub-contracts (section 73)

Payment terms are not implied into public subcontracts that are for the purpose of performing (or contributing to the performance of) all or any part of a utilities contract awarded by a private utility.

Payments compliance notices (section 69)

Publishing a payments compliance notice does not apply to private utilities.

Contract termination notices (section 80)

The requirement to publish a contract termination notice does not apply to private utilities.

Contract modifications (schedule 8 permitted contract modifications 4(2), 5(2) and 8(2))

The 50% financial cap on the value of permitted modifications does not apply if the contract being modified is a utilities contract.

7. Exemptions cheat sheet: Concession contracts

This cheat sheet is a quick reference guide to the exemptions and differences for concession contracts within the Procurement Act 2023.

A “concession contract” as a contract for the supply, for pecuniary interest, of works or services to a contracting authority where:

a. at least part of the consideration for that supply is a right for the supplier to exploit the works or services, and

b. under the contract the supplier is exposed to a real operating risk

Scope, definitions and general principles

Thresholds (schedule 1) - schedule 1 of the act will be amended to reflect the currently in force thresholds set out here

Concession contract (including light touch, defence and security but not utility) £5,372,609.

Below-threshold contracts (part 6 - sections 84 to 88)

Concession contracts are exempt from the rules governing regulated below-threshold contracts.

Valuation of contracts (section 4 and schedule 3)

The value of a concession contract must be estimated based on the maximum amount the supplier could expect to receive under or in connection with the contract.

Transparency

Information about payments under public contracts (section 70)

Contracting authorities are exempt from publishing specified payment information where payments more than £30,000 are made under concession contracts.

Assessment of contract performance (section 71)

Assessing and publishing further information on key performance indicators does not apply to concession contracts (even if KPIs have been set).

Payments compliance notices (section 69)

The requirement to publish a payments compliance notice does not apply to a concession contract.

Procedures

N/A

N/A

Competitive flexible procedure

N/A

N/A

Frameworks and dynamic markets

Competitive award by reference to dynamic markets (section 34)

A concession contract cannot be awarded under a dynamic market unless the concession contract is also a utilities contract.

Frameworks (section 45)

A framework can not be established for awarding a concession contract.

Supplier selection

N/A

N/A

Assessment and award

N/A

N/A

Remedies, procurement oversight and the debarment list

N/A

N/A

Contract governance

Key performance indicators (section 52)

The requirement to set and publish key performance indicators does not apply to concession contracts.

Assessment of contract performance (section 71)

Assessing and publishing performance information does not apply to concession contracts (even if KPIs have been set).

Information about payments under public contracts (section 70)

Contracting authorities are exempt from publishing specified payment information where payments more than £30,000 are made under concession contracts.

Implied payment terms in public contracts (section 68)

The 30 day implied terms are not implied in a concession contract.

Implied payment terms in sub-contracts (section 73)

Payment terms are not implied into public subcontracts that are for the purpose of performing (or contributing to the performance of) all or any part of a concession contract.

Payments compliance notices (section 69)

Publishing a payments compliance notice does not apply to a concession contract.

8. Exemptions cheat sheet: Schools

This cheat sheet is a quick reference guide to the exemptions and differences for schools within the Procurement Act 2023.

In the Procurement Act “school” means:

a. the governing body of a maintained school (see section 19(1) of the Education Act 2002)

b. the proprietor, within the meaning given by section 579(1) of the Education Act 1996, of an Academy within the meaning given by that section

c. the proprietor, within the meaning given by section 579(1) of the Education Act 1996, of a school that has been approved under section 342 of that act

d. the governing body, within the meaning given by section 90 of the Further and Higher Education Act 1992, of an institution within the further education sector within the meaning given by section 91 of that act

e. the Board of Governors of a grant-aided school within the meaning given by Article 2(2) of the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3))

A reference to a contract awarded by a school includes a reference to a contract awarded wholly for the purposes of supplying goods, services or works to a pupil referral unit.

Scope, definitions and general principles

Below-threshold contracts (Part 6 - sections 84 to 88)

Are exempt from the rules governing regulated below-threshold contracts.

Transparency

Payments compliance notices (section 69)

Publishing a payments compliance notice does not apply to contracts awarded by a school.

An exempt contract is a type of contract listed in schedule 2 to which the Procurement Act 2023 generally does not apply.

Schedule 2 part 1 covers contracts that are always exempt due to the nature of the relationship between the contracting authority and the other party to the contract (“counterparty exempted contracts”).

Schedule 2 part 2 covers contracts that are exempt because of the nature of the subject matter of the contract (“subject matter exempted contracts”).

Summary, part 1: counterparty exempted contracts

Vertical arrangements (previously often referred to as “Teckal” contracts)

Vertical arrangement exemptions apply only to contracting authorities that are public authorities - it does not apply to public undertakings or private utilities. The exemption is available where a contracting authority (or two or more contracting authorities acting together) (referred to here as the “contracting authority owner”) contracts with a person (referred to here as the “controlled person”) over which the contracting authority owner has the prescribed form of control and the controlled person carries out more than 80% of its activities for or on behalf of the contracting authority owner or other persons controlled by the contracting authority owner.

One example of a controlled person is a local authority trading company that the contracting authority owner has set up, either on its own or with other contracting authorities, to provide services.

Horizontal arrangements (previously often referred to as “Hamburg” contracts)

Horizontal exemptions, apply only to contracts between contracting authorities (referred to here as the “co-operating contracting authorities”) and only where both of the co-operating contracting authorities are public authorities - it does not apply to public undertakings or private utilities.

The exemption applies only where the:

the arrangement aims to achieve a common objective in connection with the exercise of the public functions of the co-operating contracting authorities;
the arrangement it is solely in the public interest;
no more than 20% of the activities envisaged by the arrangement are intended to be carried out for reasons other than for the purposes of the co-operating contracting authorities’ public functions

Defence and security contracts

A defence and security contract between a contracting authority and the government of another state or territory.

Utilities contracts

A contract between a utility and relevant joint venture to which the utility is a party.

A contract awarded by a utility to a person affiliated with the utility or by a relevant joint venture to a person affiliated with any member of the joint venture.

Summary, part 2: subject matter exempted contracts

Part 2-only contracts do not qualify as exempted if, on award of the contract, a contracting authority considers that the goods, services or works representing the main purpose of the contract could reasonably be supplied under a separate contract and the separate contract would not be of a kind to which part 2 of this schedule applies. When considering whether goods, services or works could reasonably be supplied under a separate contract, a contracting authority may, for example, have regard to the practical and financial consequences of awarding more than one contract.

Land and buildings etc.

Contracts for the acquisition (by whatever means) of (or the acquisition of an interest in or right over) land, buildings or any other complete work or a contract concerning an interest or right over any such things.

Broadcasting

Contracts entered into by contracting authorities for broadcast content.

Contracts for the right to broadcast, by any means, to the general public, material supplied by the supplier - such as programmes or advertisements.

Electronic communications services

Contracts where the main purpose is facilitating the provision by a contracting authority to the general public of an electronic communications service (as the meaning given in section 32 of the Communications Act 2003).

Contracts where the main purpose is permitting a contracting authority to provide, maintain or use a public electronic communications network (within the meaning given in section 151 of the Communications Act 2003).

Alternative dispute resolution

Contracts for the purchase of arbitration, mediation or conciliation services and other similar services.

Legal services

Contracts for specified legal services where it would be inappropriate to open those contracts to competition. These are contracts relating to judicial, other dispute resolution proceedings, notary and services that must be carried-out by a particular person under order of a court, tribunal or act.

Financial services

Contracts for the lending of money in any currency to a contracting authority.

Contracts for the provision or carrying out of an investment service or activity, or of an ancillary service, in relation to a financial instrument by an investment firm or a qualifying credit institution.

Contracts for the provision of services to the Bank of England.

Employment

Employment contracts (which are defined by reference to relevant employment legislation at paragraph 18(2)) and other contracts with individuals appointed to a public office (which may include the appointment of non-executive directors of a public authority or members of a public enquiry).

Emergency services

Contracts for the provision by an organisation or association not run for profit of one or more of the following services:

a. services relating to the promotion of fire safety

b. fire extinguishing services

c. services for the protection of life and property in the event of fires

d. search and rescue services

e. civil defence services

f. nuclear safety services

g. ambulance services provided in respect of medical emergencies (note this does not include general patient transport, for example, between home and a treatment centre)

Public passenger transport services

A contract that is required to be awarded in accordance with the public service obligations regulations within the meaning given by section 136(11) of the Railways Act 1993.

Research and development services

Contracts for the provision of research and development (R&D) services where the services are intended to be for, or to result in, benefit to the public, and the contract does not also provide for the provision of goods or works. The R&D services to be provided must include at least one of the following activities:

a. “fundamental” research to acquire new scientific or technical knowledge without any particular application or use in view

b. “applied” research directed primarily at generating scientific or technical knowledge for a specific objective

c. “experimental” development which draws on existing knowledge to initiate the manufacture of new materials or products, establish new processes, systems or services; or to achieve a substantial improvement in existing materials, products, processes, systems and services

d. the manufacture and testing of prototypes But services are not “research and development services” if they include— (a) the production of tools for manufacture, or (b) the development of industrial processes to manufacture goods or works arising from R&D.

International agreements and organisations

A contract awarded under a procedure specified in an international agreement of which the United Kingdom is a signatory and which the contracting authority must follow. Exemption only applies to contracts relating to the stationing of military personnel, or the implementation of a joint project between the signatories to that agreement.

A contract awarded under a procedure adopted by an international organisation of which the UK is a member and that procedure is inconsistent in any material way with the procedure to be followed in the act.

National security

A contract that the contracting authority determines should not, in the interests of national security, be subject to all act or a part of the act.

Intelligence activities

A contract for the purposes of carrying out, facilitating or supporting intelligence activities.

Defence and security contracts

A defence and security contract where:

a. the supplier is located in an area outside the United Kingdom in which the armed forces are deployed, and

b. the operational needs of the armed forces require the contract to be awarded to that supplier

A defence and security contract where:

a. the supplier is located in a state or territory outside the United Kingdom in which the armed forces maintain a military presence

b. that state or territory requires, in connection with that presence, that the supplier supplies the goods, services or works to which the contract relates

A defence and security contract awarded under a procedure adopted by an international organisation of which the United Kingdom is a member.

A defence and security contract awarded under an arrangement between the United Kingdom and one or more other states or territories, where the purpose of that arrangement is, or is in connection with:

a. the joint development of a new product by or on behalf of the parties to the arrangement, or

b. the exploitation of that product once developed

Utilities contracts

A utilities contract for the supply of goods, services or works to a utility other than one acting as a centralised procurement authority, where:

a. the purpose of the contract is to allow the further sale or lease of those goods, services or works to a third party

b. the utility does not have a special or exclusive right, within the meaning given by section 6(3), to sell or lease those goods, services or works, and

c. other persons may sell or lease those goods, services or works under the same conditions as the utility

A utilities contract for the supply of water to a utility carrying out a utility activity referred to in paragraph 3(1)(a) or (b) of schedule 4.

A utilities contract for the supply of energy, or fuel for the production of energy, to a utility carrying out a utility activity referred to in paragraph 1, 2 or 6 of schedule 4.

A contract for the supply of goods, services or works wholly or mainly for the purpose of an activity that would be a utility activity if it were not specified in part 2 of schedule 4.

Concession contracts

A concession contract for the carrying out of a utility activity within paragraph 3(1) or (2) of schedule 4 (water services), ignoring for this purpose the effect of paragraph 3(4) of that schedule.

A concession contract that:

a. confers an exclusive right to operate a relevant scheduled air service for a period of four years or a series of periods falling within a period of four years, and

b. imposes minimum service requirements in respect of that service during those periods 6 6

A concession contract for the provision of public passenger transport services.

Commercial contracts of the City of London

A contract for the supply of goods, services or works to the Common Council of the City of London other than for the purposes of its functions as a local authority, police authority or port health authority.

10. How do I estimate the value of my contract?

The rules on valuation of contracts at section 4 of the Procurement Act 2023 are important, particularly in relation to determining whether contracts are above or below threshold and consequent applicable rules governing the procurement. When estimating the value of contracts, the methodology defined in the act at schedule 3,”Estimating the Value of a Contract” must be considered.

Estimating the values of a contract must not be approached with the intention of disaggregation by artificially subdividing contracts for the purposes of evading the above-threshold regime. As such, schedule 3 paragraph 4 confirms “anti avoidance” measures to be applied in estimating contracting authority values for contracts.

Estimating the value of a contract - methodology

Estimated contract values must be the maximum amount you might be expected to pay for any goods, services or works to be provided through the contract, taking account of any potential factors that might affect the total amount payable during the projected life of the whole contract and, where applicable, any amounts already paid. Schedule 3 sets out some examples of what might contribute to the total costs of a contract but this list is not exhaustive.

Other project related cost factors may also be considered if they are relevant to the valuation of total contract values.

Schedule 3, s.1 (2)(a) to (e) indicates the amount a contracting authority could expect to pay may include the following:

a. the value of any goods, services or works provided by the contracting authority under the contract other than for payment

b. amounts that would be payable if an option in the contract to supply additional goods, services or works were exercised

c. amounts that would be payable if an option in the contract to extend or renew the term of the contract were exercised

d. amounts representing premiums, fees, commissions or interest that could be payable under the contract

e. amounts representing prizes or payments that could be payable to participants in the procurement provides the following examples of contributory costs that contracting authorities might expect to consider when calculating total contract values

Examples

Example 1

Your contract is for 2 years plus a possible 1 year extension at an estimated value of £70k per annum (including VAT), this is:

3 years (2 years + 1 year extension) x £70k = £210k is the estimated contract value.

Example 2

Your contract is for 4 years to deliver goods at an estimated value of £50k per annum (excluding VAT), your contract includes the option to deliver additional goods of up to £25k (excluding VAT) per annum if required, this is:

4 years x £75k (£50k + £25k optional) = 300k net cost.

Add a 20% for VAT i.e £300k + £60k = £360k is the estimated contract value.

Example 3

Your contract is for 3 years at a total estimated value of £100k (excluding VAT) for the whole term for 50 user licences. There are additional licence fees of £2k (excluding VAT) per service user after the first 50 users. You will require an additional 10 service user licences from day one of the service provision. The calculation of contract value would be:

£100k (3 year contract service provision) + £20k (£2k x 10 optional additional user licences from day 1) = £120k net cost.

Add a 20% allowance for VAT i.e. £120k + £24k = £144k is the estimated contract value.

Estimating the value of a framework - methodology

When calculating the total contract values for a framework, the total value must comprise the sum of the estimated values of all the contracts that may be awarded in accordance with that framework.

In the case of an open framework, the total value of the open framework is to be treated as including the value of all the series of frameworks awarded, or to be awarded, under the open framework.

Examples

Example 1

Your framework contract is for 3 years. The estimated value of all the call off contracts is £1.4m (including VAT), this is:

3 years = £1.4m is the estimated contract value.

Example 2

Your framework contract is for 3 years plus a possible 1 year extension with an estimated value of the calls offs of £140k (excluding VAT) per annum, this is:

4 years (3 years + 1 year extension) x £140k = £560k estimated contract value.

Add 20% VAT i.e £560k + £112k = £672k is the estimated contract value.

Example 3

Your open framework consists of 3 frameworks and the estimated values are:

Framework 1

Framework 1 is for 2 years with an estimated value of the calls offs of £140k (including VAT) per annum.

Framework 2

Framework 2 is for 2 years with an estimated value of the calls offs of £180k (including VAT) per annum.

Framework 3

Framework 3 is for 3 years with and estimated value of the calls offs of £220k (including VAT) per annum, this is:

2 years x £140k = £280k

2 years x £180k = £360k

3 years x £220k = £660k

Total open framework estimated value = £1.3m.

Estimating the value of a concession contract

Concession contracts are valued differently, based on what the contracting authority believes the the maximum amount the supplier could expect to receive (e.g. sales revenues) under or in connection with the contract, including, where applicable, amounts already received.

The amounts a supplier could expect to to receive by way of a concession contract are indicated, but not limited to, within schedule 3 as:

a. amounts representing revenue (whether monetary or non-monetary) receivable pursuant to the exploitation of the works or services to which the contract relates (whether from the contracting authority or otherwise)

b. the value of any goods, services or works provided by the contracting authority under the contract other than for payment

c. amounts that would be receivable if an option in the contract to supply additional services or works were exercised

d. amounts that would be receivable if an option in the contract to extend or renew the term of the contract were exercised

e. amounts representing premiums, fees,

commissions or interest that could be receivable under the contract

f. amounts received on the sale of assets held by the supplier under the contract

Example

A sub-central government organisation offers a concession contract for catering services to be exploited for public visitors to their regional establishments. Because it has never operated such a catering service before, the contracting authority has used a catering consultant to provide a likely sales scenario for beverages and snacks based on the known footfall of each of 5 venues. It determines the most economically viable approach to be offered on a price per square metre of retail and preparation floorspace (£100 + VAT) per m2 per annum including rates but subject to metered utilities) and a minimum 2% + VAT of net sales revenue generated from concession sales. A concession revision and/or contract break option is available to both parties should pre-agreed sales commissions not be achieved per m2 in any one location. The contract is subject to an inflation related review in the 2nd year of a total four year term.

The contracting authority can define and list 5 venues with a combined floor area of 2000 m2 which could be valued in this manner:

Fixed rentals @ 2000(m2) x £100, per year = £200,000

Median (consultant) forecast of combined sales for all five sites is suggested at £925,000 inc VAT which should be represented as £770,833 (net) sales for commission calculation. 2% commission = £15,417 per annum.

Total indicative value for the purposes of advising the market would be in the region of:

£200,000 + £15,417

Y1 and Y2 contract value = £430,834

Y3 and Y4 contract values = £443,759 including inflation @ 3% £12,925

4 year indicative value of concession = £874,593

What if it is not possible to estimate the value of my contract?

If you are genuinely unable to estimate the value of your contract in accordance with schedule 3, (for example when the duration of the contract is unknown) then the contract is to be treated as having estimated the value above the threshold amount for its type of contract.

Example

An agile contract for the provision of information management penetration testing for a subcentral government organisation is required. The programme must be completed within 12-months of award, however, there is a genuine belief that by its nature, the testing may uncover a need for more advanced or other directly related investigation testing of the system. The classified nature of the data and environment has created a situation where once the work is started, it must continue until complete, particularly if initial investigations find weaknesses and risks to information security.

Market research suggests an average of £1500 per day per engineer, plus their expenses when visiting sites + VAT.

You calculate the requirement as 1 engineer for a total 60 days, 20 of which will be on your premises.

The initial calculation would be something like this:

£1,500 (day rate each ) x 60 (days) x 1 (engineers) = £90,000

Plus 20 days/nights accommodation, travel and sustenance (in accordance with Cabinet Office published expenses rates), estimate £240 per engineer x per day/night stay = £4,800 in variable costs.

Indicative cost for exploratory works = £94,800 Plus VAT on above = £18,960

Indicative total no less than cost + £113,760 If the contracting authority has a genuine belief that an inestimable amount of work will be required before their system meets all required security protocols, they would also consider the following:

Likely findings of the initial investigation leading to, say, 80% probability of further work required.

Likely amount of further days required following the initial investigation? Unknown.

Likely amount of additional engineer days required on site? Unknown.

Likely amount of remote/base engineer days required following investigation? Unknown.

Likely amount of variable costs/expenses etc if required? Unknown.

Likely term duration required to complete any preventative or remedial works following initial investigation? Unknown.

Because of genuine inability to make an estimate of the full possible contract value, they would issue the contract for 1 year in accordance with their defined maximum programme term, but allow for extension options and treat the procurement process as one that is above the threshold (£214,904 in the case of sub central organisation).

The inability to provide an estimated contract value would always lead to the default procurement approach being the same that would be applied in the most relevant above threshold case.

11. Threshold: Decision tree

Important note - all values are inclusive of VAT.

Question 1: Do you need to undertake a procurement exercise and award a contract to deliver your requirement? If no, you do not come under the Procurement Act’s legal obligations on conflicts of interests (i.e.identify and mitigate conflicts of interest or prepare a conflicts assessment). However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. If you don’t know yet, you do not need to identify and mitigate conflicts of interest or prepare a conflicts assessment as per the Procurement Act 2023 at this time. However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. If yes, go to question 2. Question 2: is the estimated value of your contract equal to or above the threshold amount for its type of contract? If no, you do not need to identify and mitigate conflicts of interest or prepare a conflicts assessment as per the Procurement Act 2023. However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. Good practice would be to ensure a proportionate conflicts of interest check is undertaken. If yes, go to question 3. Question 3: is your contract an exempted contract or for other reasons not covered procurement under the Procurement Act? If yes, you do not need to identify and mitigate conflicts of interest or prepare a conflicts assessment as per the Procurement Act 2023 However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. Good practice would be to ensure a proportionate conflicts of interest check conflicts of interest check is undertaken. If no, go to question 4. Question 4: you need to comply with the conflicts of interest obligations set out in the Procurement Act 2023. Does your organisation have a conflicts of interest procedure that meets these obligations? If yes, before publishing a tender or transparency notice follow your organisation's conflicts of interest procedure to identify conflicts of interests or potential conflicts of interest and prepare a conflicts assessment. If no, go to question 5. Question 5: for the forthcoming procurement can you list the following individuals? a. any persons acting for or on behalf of your organisation in relation to the procurement b. any ministers acting in relation to the procurement c. any persons that will have influence over a decision made in relation to your procurement If yes, follow the steps below: 1. Confirm you have taken reasonable steps to identify any actual or potential conflicts of interests? Make sure your consideration of interests include personal, professional or financial interest and which may be direct or indirect. 2. Think about any circumstances that are likely to cause someone to wrongly believe there is a conflict or potential conflict of interest, beyond any conflicts already identified? If so make a note of the steps taken or will be taken to demonstrate that no such conflict or potential conflict exists. 3. You must take all reasonable steps to ensure that any identified conflicts or potential conflicts of interest does not put a supplier at an unfair advantage or disadvantage in relation to your procurement (this may include requiring a supplier to take reasonable steps). 4. Before publishing a tender or transparency notice you must prepare a conflicts assessment using the information and steps taken so far. 5. Keep the conflicts assessment under review and update it as and when required - until either procurement termination, contract termination or, for dynamic markets, the market ceases to operate (via the relevant procurement notice). 6. Provide confirmation that a conflicts assessment has been prepared and revised when publishing relevant procurement notices. [Does a supplier remain at an unfair advantage - even after all reasonable steps to mitigate this? If yes, this supplier must be excluded.] If no, you must take all reasonable steps to identify conflicts and potential conflicts, identify the individuals and follow the steps following ‘yes’.

12. Below threshold contracts checklist

Action:

1. Confirm your total estimated contract value is below the thresholds set out in the Procurement Act schedule 1 (ensuring you are not artificially subdividing contracts).

2. Undertake pre-market engagement where appropriate and proportionate.

3. Have regard to the fact that small- and medium-sized enterprises may face particular barriers in competing for a contract and consider whether such barriers can be removed or reduced.

Does not apply to the award of a contract in accordance with a framework.

4. Design the procurement process without restricting tenders by suppliers suitability to perform the contract (no intermediary conditions of participation stage as a way of reducing the number of suppliers to invite, previously known as ‘selection stage’ or ‘pre-qualification stage’). Does not apply to a works contract above £139,688 (central government), or £214,904 (others). Also does not apply to a contract awarded:

a. by a devolved Welsh authority, unless it is awarded under a reserved procurement arrangement

b. under a devolved Welsh procurement arrangement, or

c. in accordance with a framework

5. Design the procurement process with reasonable timescales which are the same for every supplier.

6. Publish a below-threshold tender notice on the central digital platform before advertising anywhere else. Does not apply to contracts with an estimated value of less than £12,000 (central government), or £30,000 (others).

7. Assess tenders.

8. Publish a contract details notice on the central digital platform as soon as reasonably practicable after entering into the contract.

9. Ensure successful supplier is set up on 30 days (or less) payment terms.

10. Understand the contract modification rules and debrief the contract manager as required.

11. Ensure total contract value remains under the threshold for the lifetime of the contract (including where any modifications are made) otherwise it will become a ‘convertible contract’.

A regulated below threshold contract that, following modification, exceeds the relevant threshold set out in schedule 1 of the act and is now a public contract.

13. Regulated below-threshold contracts: Process flow

Publish preliminary market engagement notice and undertake pre-market engagement (optional)

Publish below-threshold tender notice on the central digital platform before advertising by any other means

Assess tenders

Issue feedback where appropriate

Publish contract award notice to observe any voluntary standstill period

Enter into contract

Publish contract details notice

Manage contract

##14. Summary of transparency notice requirements for below-threshold contracts

Mandatory

Procurement activity	Notice publication	Frequency
Invitation to tender	Tender notice	Once at the start of the procurement process
Modifications to the terms of the procurement	Tender notice (amended)	Revise and republish or provide again the tender notice each time a modification is made
Following award of a the contract	Contract details notice	Once, as soon as reasonably practicable after the contract is entered into
When a contract modification would take the value of the contract above the relevant threshold, known as “convertible contracts”	Contract change notice	Once when the below-threshold contract becomes a convertible contract and again if further permitted modifications are made

Voluntary

Procurement activity	Notice publication	Frequency
Procurement planning	Planned procurement notice	Once or more to advise the market of an upcoming procurement, however there is no advantage of reducing minimum tender timescales for a below-threshold contract
Preliminary market engagement	Preliminary market engagement notice	Once or more to inform the market of upcoming pre-market engagement or to provide details of any conducted pre-market engagement activities - if a preliminary market engagement notice is not published an explanation for non-publication is not required in the below-threshold tender notice
After tender assessment and before entering into a public contract	Contract award notice	Once to inform the market you are about to award a contract
End of the contract	Contract termination notice	Once when the contract ends

15. Conflicts of interest requirement: Decision tree

Question 1: Do you need to undertake a procurement exercise and award a contract to deliver your requirement? If no, you do not come under the Procurement Act’s legal obligations on conflicts of interests (i.e.identify and mitigate conflicts of interest or prepare a conflicts assessment). However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. If you don’t know yet, you do not need to identify and mitigate conflicts of interest or prepare a conflicts assessment as per the Procurement Act 2023 at this time. However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. If yes, go to question 2. Question 2: is the estimated value of your contract equal to or above the threshold amount for its type of contract? If no, you do not need to identify and mitigate conflicts of interest or prepare a conflicts assessment as per the Procurement Act 2023. However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. Good practice would be to ensure a proportionate conflicts of interest check is undertaken. If yes, go to question 3. Question 3: is your contract an exempted contract or for other reasons not covered procurement under the Procurement Act? If yes, you do not need to identify and mitigate conflicts of interest or prepare a conflicts assessment as per the Procurement Act 2023 However the underlying principles could be relevant and contracting authorities will still be subject to relevant laws on fraud, bribery and corruption alongside relevant public service conduct codes and internal business rules. Good practice would be to ensure a proportionate conflicts of interest check conflicts of interest check is undertaken. If no, go to question 4. Question 4: you need to comply with the conflicts of interest obligations set out in the Procurement Act 2023. Does your organisation have a conflicts of interest procedure that meets these obligations? If yes, before publishing a tender or transparency notice follow your organisation's conflicts of interest procedure to identify conflicts of interests or potential conflicts of interest and prepare a conflicts assessment. If no, go to question 5. Question 5: for the forthcoming procurement can you list the following individuals? a. any persons acting for or on behalf of your organisation in relation to the procurement b. any ministers acting in relation to the procurement c. any persons that will have influence over a decision made in relation to your procurement If yes, follow the steps below: 1. Confirm you have taken reasonable steps to identify any actual or potential conflicts of interests? Make sure your consideration of interests include personal, professional or financial interest and which may be direct or indirect. 2. Think about any circumstances that are likely to cause someone to wrongly believe there is a conflict or potential conflict of interest, beyond any conflicts already identified? If so make a note of the steps taken or will be taken to demonstrate that no such conflict or potential conflict exists. 3. You must take all reasonable steps to ensure that any identified conflicts or potential conflicts of interest does not put a supplier at an unfair advantage or disadvantage in relation to your procurement (this may include requiring a supplier to take reasonable steps). 4. Before publishing a tender or transparency notice you must prepare a conflicts assessment using the information and steps taken so far. 5. Keep the conflicts assessment under review and update it as and when required - until either procurement termination, contract termination or, for dynamic markets, the market ceases to operate (via the relevant procurement notice). 6. Provide confirmation that a conflicts assessment has been prepared and revised when publishing relevant procurement notices. [Does a supplier remain at an unfair advantage - even after all reasonable steps to mitigate this? If yes, this supplier must be excluded.] If no, you must take all reasonable steps to identify conflicts and potential conflicts, identify the individuals and follow the steps following ‘yes’.

Conflicts of interest assessment quick guide

When do I need to complete a conflicts of interest assessment?

At the start of the a procurement process, unless your procurement is not covered by the Procurement Act, you must prepare a conflicts assessment before you publish the following notices:

a. a tender notice

b. a transparency notice

c. a dynamic market notice in relation to the establishments of a dynamic market

What information does my conflicts assessment need to include?

The conflicts assessment must include details of conflicts or potential conflicts of interest identified.

This could include a list of any interests (or confirmation of none) for each person:

a. acting for or on behalf of your organisation, or individuals that influence a decision of the contracting authority in relation to the procurement

b. a minister acting in relation to the procurement

c. a supplier or other external body with an identified interest in the decisions in question

The conflicts assessment must include the information on what steps you have taken or will take to mitigate any identified conflicts or potential conflicts of interest and the outcome or next steps. This could include details of reasonable steps that have been requested and/ or actioned by suppliers.

Also the details of any known perceived conflict of interest and the steps taken or planned to take to demonstrate that no such conflict or potential conflict exists.

What do I need to do to meet the transparency obligations around conflicts of interest?

When you publish one of the following notices you must confirm you have prepared and/or revised a conflicts assessment:

a. a tender notice

b. a transparency notice

c. a dynamic market notice in relation to the establishments of a dynamic market

d. a contract details notice

e. a contract change notice

When do I need to review and update my conflicts of interest assessment?

Review your conflicts assessment either on a set routine basis and/or at key stages of your procurement process, such as when new information comes to light.

Update your conflicts assessment as and when required following your review, for example:

a. when additional people acting for or on behalf of your organisation who will have influence over a decision made in relation to your procurement process and award of the contract are identified

b. when you move to the next stage of the procurement process and new information is available, for example, when suppliers have submitted a tender you may need to cross check this information with the evaluation panel members

What should I do with my conflicts of interest assessment?

Your conflicts assessment should be held as a record as it may be needed in the future for audit purposes or as part of the application for discovery in the event of a court case.

16. Which procurement regime should I be following for my procurement?

Transition decision tree

Exemptions apply ↩
Not applicable if the opportunity is only advertised to particular or pre-selected suppliers ↩
Not an extensive list ↩
Not an extensive list ↩
Contract Notice includes: • F02: Contract Notice (reg. 49 PCRs), • F05: Contract notice – utilities (reg. 69 UCRs), • F17: Contract notice for contracts in the field of defence and security (reg. 17, 18, 19 DSPCRs), • F24: Concession notice (reg. 31 CCRs), • F12: Design contest notice (reg. 79 PCRs) ↩

Question 17

Delivering value for money

Accepted Answer

Although this is not a new concept, the value for money objective encourages contracting authorities to consider further what value means to their organisation and the community it serves, and how they can get the best mix of economy, efficiency and effectiveness that achieves the intended outcome over the whole lifetime of the contract.

Question 18

Maximising public benefit

Accepted Answer

The public benefit objective encourages contracting authorities to think about the extent to which their contracts can deliver greater benefit, for example by collaborating with other contracting authorities for a common purpose to reduce resource implications and costs, or considering social value or environmental benefits that could be achieved by the contract.

Question 19

Sharing information

Accepted Answer

Transparency is still a key consideration. The sharing information objective requires contracting authorities to share information for the purpose of allowing suppliers and others to understand their policies and decisions relating to procurements. This is in addition to the wider transparency obligations that have been embedded throughout the Procurement Act through clear publication requirements designed to ensure an approach of “transparency by default” and deliver greater transparency than any duty to have regard.

Example

A contracting authority is expected to keep suppliers reasonably informed of their progress in a competitive tendering procedure, including providing prompt notification and explanation of any decision to remove a supplier from the procedure.

Question 20

Integrity

Accepted Answer

The acting, and being seen to act, with integrity objective will help in the fight to prevent fraud and corruption. Being able to demonstrate this objective through good management, prevention of misconduct, and having full control over processes is key to strengthening trust with suppliers and the general public.

Example

Public procurement must promote good governance, sound management of public money, and a professional relationship between contracting authority and supplier, by for example managing conflicts of interest, protecting intellectual property, copyrights and confidential information or other standards of professional behaviour.

Question 21

Treat suppliers the same

Accepted Answer

Contracting authorities are required to treat suppliers the same unless a difference between the suppliers justifies different treatment.

Example

When a contracting authority sets a deadline for submission of tenders they should not accept a late tender from one supplier but not from others. This would be a breach of equal treatment and also applies to other procedural requirements such as other deadlines, word limits, minimum quality or quantity standards etc.

Alternatively, where an incumbent supplier is bidding again for its replacement contract, (and so will inevitably have an advantage over other tenderers due to their experience in the current contract) the contracting authority must consider how this incumbent advantage can be managed to ensure all suppliers have an equal footing to win the replacement contract. In this case, different treatment intended to neutralise the advantage enjoyed by the incumbent may be justified, and can be achieved for example by providing additional information on the contract specification. However, a lower risk alternative would be to provide the additional information to all suppliers (ie including the incumbent).

Question 22

Do not put a supplier at an unfair advantage or disadvantage

Accepted Answer

If different treatment of suppliers is justified, contracting authorities must take the appropriate steps to ensure they do not put a supplier at an unfair advantage or disadvantage.

Example

Where a potential conflict of interest does seem likely to benefit one or a few of the suppliers but not all, then the contracting authority must take steps to level the playing field. Transparency and informing the suppliers of the same information, or disclosing the current supplier name may be acceptable means of countering the potential problem. Each procurement scenario should consider the best mitigation under the circumstances during and from early engagement through to award recommendation.

Question 23

Have regard to small and medium-sized enterprises (SMEs

Accepted Answer

This objective encourages contracting authorities to specifically consider their requirements from an SME perspective, for example by reducing processes which are disproportionately burdensome on SME suppliers or transfer unfair levels of risk to the suppliers.

Example

Consider whether the tender period is realistic when some businesses do not have dedicated tendering teams and small businesses are less likely to be able to respond to procurement processes with short timelines. This potential barrier to an SME could be removed or reduced by adding an extra 10 days onto the minimum time limit for return of tenders for all suppliers to ensure that small businesses are not disadvantaged. This would be consistent with the requirement to treat suppliers the same because although the tendering period is longer to enable higher levels of participation of more diverse suppliers, such as SMEs, there is no actual disparity of treatment.

Question 24

National Procurement Policy Statement

Accepted Answer

The Procurement Act 2023 sets out a power for Ministers to publish a national procurement policy statement (NPPS) and for Welsh Ministers to publish a Wales procurement policy statement (WPPS), which along with the procurement objectives will set out the national strategic priorities for public procurement.

The NPPS will set out the current strategic priorities for public procurement and how contracting authorities in England (and those exercising non-devolved functions in Wales and Northern Ireland or procuring under a reserved procurement arrangement) can support their delivery. Contracting authorities are required to have regard to the relevant priorities in the NPPS, alongside other local priorities, when carrying out procurements.

The WPPS will set out the strategic direction for public procurement in Wales. It will set out principles, considerations and intended outcomes that devolved Welsh authorities will have to have regard to whilst undertaking public procurements.

The NPPS and the WPPS will give suppliers greater visibility of the national priorities that should be considered by contracting authorities when undertaking procurement. Where relevant to the specific contract, these priorities will be clearly set out in the tender documents. Policy matters likely to be addressed by the NPPS and WPPS include social value priorities. Inclusion in the NPPS allows for further development and guidance surrounding implementation of these priorities over time.

The NPPS and the WPPS may be amended or replaced at any point following appropriate consultation and parliamentary or Senedd scrutiny.

Northern Ireland will continue to implement public procurement policy through Procurement Policy Notes alone.

The NPPS does not apply:

to private utilities;
when awarding a contract:

a. in accordance with a framework; or

b. by reference to suppliers membership of a dynamic market;

to devolved Welsh procurement arrangements; or
to a devolved Welsh authority or transferred Northern Ireland authority, except in relation to a reserved procurement arrangement

The WPPS applies to:

a devolved Welsh authority, except in relation to procurement under a reserved.procurement arrangement or transferred Northern Ireland procurement arrangement; and
a contracting authority other than a devolved Welsh authority in relation to procurement under a devolved Welsh procurement arrangement.

Under the authorities listed above the WPPS does not apply:

to private utilities; or
when awarding a contract:

a. in accordance with a framework; or

b. by reference to suppliers membership of a dynamic market.

Pipeline Notice

Change: The publication of the pipeline notice is mandatory for contracting authorities where their spend is estimated to be more than £100M in the year.

Benefit: Better visibility of procurement plans will increase collaboration opportunities with other authorities. It will allow suppliers to better plan their resources which should increase the number of appropriate suppliers tendering for contracts.

Contracting authorities with an estimated spend of £100 million or more on “relevant contracts” in the coming financial year are required to publish a pipeline notice. “Relevant contracts” are all contracts other than those which are exempted (including below threshold contracts). The purpose of the pipeline notice is to provide the market with advance notice of anticipated public contract opportunities with an estimated value of more than £2 million which a contracting authority expects to commence (by publishing a tender or transparency notice) during the 18 months following the 1st April each year. This gives suppliers the opportunity to track potential opportunities, enabling them to determine if they wish to tender. This will be of particular benefit to small and medium-sized enterprises (SMEs) and voluntary, community and social enterprises (VCSEs) by providing them with time to plan for future work, ensuring a competitive and vibrant market.

Timescales for publishing pipeline notices.

Contracting authorities have 56 days to publish their pipeline notice for the next 18 months following the 1st April each year. In the first year of the Act’s operation, the period which the notice must cover will be the twelve months beginning with the 1 April following the day on which theProcurement Act 2023 comes into force.

Private utilities and transferred Northern Ireland authorities are not required to publish a Pipeline Notice.

What information needs to be in the pipeline notice?

The pipeline notice must set out:

nature of what is to be procured;
when it is expected to be advertised; and
any other information that is relevant.

Contracting authorities will not be held to any information they provide in the pipeline notice but any significant changes to the information published should be updated as and when appropriate.

FAQs re pipeline notices

Question: What if there is no budget available yet?

Answer: The pipeline notice should include knowns as well as aspirational procurements, as there is no commitment to procure anything published in the pipeline notice

Question: If no project value is available yet, how should we determine whether a pipeline notice is required?

Answer: Use an estimated figure based on previous similar procurements or research the market to get a typical benchmark. Values, particularly some way before early engagement, do not need to be absolute, just reasonable given the information available at the time. The pipeline notice can be updated when the procurement and budget becomes more certain.

Conflicts of Interest

Change: The Procurement Act 2023 gives clearer instructions on how and when to undertake conflicts of interest checks, steps to mitigate and makes specific provision for the preparation of a conflicts assessment.

Benefit: Ensures greater focus and consistency when dealing with, and recording, conflicts of interest which may allow them to be identified and managed earlier in the procurement process and throughout.

Conflicts of Interest obligation

The principal obligation on all contracting authorities is to avoid conflicts of interest of individuals acting in relation to a procurement, including those who influence a decision made by or on behalf of a contracting authority in relation to a covered procurement, by identifying and mitigating any conflicts or potential conflicts of interest. This obligation starts when the need for a procurement is first identified and continues until either the contracting authority decides not to award the contract (that is, the procurement itself is terminated) or termination of any contract(s) signed as a result of the covered procurement.

Actual conflicts

An actual conflict may exist if:

a. an individual who is acting for or on behalf of the contracting authority has a personal, professional or financial interest (directly or indirectly) in the outcome of the procurement and has some influence over decisions made during the process. This includes an interest in a participating supplier such as owning shares in the company.

b. a Minister of the Crown, a Member of the Welsh Government or the First Minister, Deputy First Minister or a Northern Ireland Minister has a personal, professional or financial interest (directly or indirectly) in the procurement.

Where an actual conflict has been identified, the contracting authority must take all reasonable steps to ensure that the conflict does not put a supplier at an unfair advantage or disadvantage during the procurement.

The range of steps that could be taken to avoid actual conflicts is extensive and contracting authorities have discretion on how best to mitigate them on each individual procurement. Mitigation could include:

a. reassigning staff onto other projects;

b. reassigning staff so they have no influence over procurement decisions;

c. requiring a person to be removed from a suppliers bid team and advisory role (“ethical walls” are regularly used in large companies);

d. excluding suppliers from the procurement.

Suppliers must be excluded from procurements if they:

a. receive an unfair advantage which cannot be avoided; or

b. the supplier does not take steps that the contracting authority considers are necessary in order to ensure it is not put at an unfair advantage. This could include refusing to provide certain information, providing information in response to such a request which is not accurate or not putting in place ethical walls.

Potential conflicts

A potential conflict may arise where a public official has private interests which are such that a conflict of interest would arise if the official were to become involved in relevant (i.e. conflicting) official responsibilities in the future.

For example: A member of the commercial team’s spouse is the CEO/Director of a business that is in the process of acquiring ownership of another company. That company has recently submitted a tender.

Where a conflicts assessment (described below) identifies potential conflicts of interest, the contracting authority should implement a plan for monitoring and mitigating the risks to ensure they do not become actual conflicts of interest.

Perceived conflicts

It is critical for public trust that we are acting with integrity, spending public money responsibly and that suppliers will be treated fairly.

If a contracting authority is aware of circumstances that it considers are likely to cause a reasonable person to wrongly believe there to be a conflict or potential conflict of interest, then this should also be included in the conflicts assessment. It must also include details of any steps the contracting authority has taken or will take to demonstrate that no such conflict or potential conflict exists. The actions taken do not need to eradicate all doubt as to whether or not there is a conflict, but it does need to be sufficient to demonstrate to a reasonable person that there is no actual or potential conflict.

Examples for a perceived conflict could be that someone has been known to accept significant gifts or hospitality, this could create a perception of biassed decision-making even if the gift has no bearing on the decision.

The contracting authority has wide discretion as to what approach it takes to a perceived conflict e.g. recording or publishing information which demonstrates no actual conflict.

Conflicts assessment

A conflicts assessment is the recording of any identified conflicts or potential conflicts of interest and the plans to mitigate them. It should also include any perceived conflicts identified and what steps the authority has taken, or will take, to ensure that no actual conflict or potential conflict exists. A conflicts assessment should be proportionate to each procurement and therefore could be applied in a light touch way in relation to procurements which are small and/or have very little in the way of conflicts concerns.

How could you identify conflicts and potential conflicts?

A conflicts identification process could be implemented in many ways, from having a standard agenda item on a meeting in relation to the procurement where awareness of any forms of conflicts of interest are sought and recorded; being part of a commercial risk register or having a templated document that has to be completed and updated at each stage of the procurement process by everyone that has been identified as influencing the procurement process, those persons would include:

a. a person (including a minister) in a position that is likely to have direct influence over decisions made in the course of the procurement process;

b. a person in a position which still has some possibility of influence, but is more remote than that set out in paragraph a. AND has tried to exert some influence over the process; and

c. a supplier or other external body with an identified interest in the decisions in question.

If actual, potential or perceived conflicts are identified, the conflicts assessment must include details of:

a. those conflicts that have been identified; and

b. any steps taken or to be taken to mitigate to ensure it does not put a supplier at an unfair advantage or disadvantage.

A conflicts assessment may also note where no conflicts have been identified as respect relevant individuals, as a means of demonstrating that the duty to identify has been complied with.

Contracting Authorities must maintain and update the conflicts assessment as necessary throughout the course of the procurement and through the management of any resulting contracts. As the contracting authority obtains more information, makes more decisions about the procurement and is exposed to wider pressure and influence it should be adapting its assessment of and approach to conflicts. In practical terms this should not result in every new piece of information resulting in a review and update to the conflicts assessment, but at reasonable intervals, and upon the publication of specified notices (as set out below) it should be reviewed and revised as necessary.

At the point of publishing one of the following notices contracting authorities will be required to confirm that they have complied with the obligation to prepare a conflicts assessment, and have reviewed and revised the assessment as necessary (the conflicts assessment will not be published):

a. a tender notice;

b. a transparency notice;

c. a dynamic market notice in relation to the establishment of a dynamic market;

d. a contract details notice; and

e. a contract change notice.

Frameworks and Dynamic Markets Conflicts of Interest assessments

The conflict of interest provisions apply to all covered procurements. Where procurements are effectively split across multiple stages, for example frameworks and dynamic markets, the conflicts obligations set out above apply to all of those stages.

Example

When a contracting authority sets up a framework they need to comply with the conflicts obligations up to the point at which they award the framework and then maintain and update the conflicts assessments through the lifetime of the framework as required.

When call off contracts are procured under the framework the contracting authority (whether the contracting authority that set up the framework or a different contracting authority that is permitted to use the framework) will need to undertake a conflicts assessment specifically for that individual call off contract.

Recording and storing conflicts assessments

If the conflicts assessment has identified actual, potential or perceived conflicts it will also include mitigation steps. The conflicts assessment should be stored as a procurement record with the other procurement records.

4. Definitions

Previous Regulations (PCR2015)	Procurement Act 2023
Principles of procurement • non-discrimination, • equal treatment, • proportionality, • mutual recognition • transparency	Section 12 Covered procurement: objectives Have regard to: • delivering value for money; • maximising public benefit; • sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions; • acting, and being seen to act, with integrity. • have regard to the fact that small and medium-sized enterprises may face particular barriers to participation, and • consider whether such barriers can be removed or reduced. Must: • treat suppliers the same unless a difference between the suppliers justifies different treatment, and • if different treatment is justified, not put a supplier at an unfair advantage or disadvantage.

5. Transitioning to the Procurement Act 2023

The intent is that the new procurement regime will cause as little disruption as possible for contracts already awarded under the old regulations or procurements that have started but not yet been awarded when the new regime comes into effect. Section 122 of the Procurement Act contains a power which allows transitional and saving provisions to be made. These provisions, found in the Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024, provides for procurements that have already started at the time the new regime commences to continue under the old regime. In addition, contracts that were procured under the old regime will continue to be managed under those rules.

When do you have to start using the new rules?

The rules under the Procurement Act 2023 have to be followed from the commencement date of the new regime for all new procurements.

The Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 will apply until the commencement date, at which point they will be revoked.

What about procurements started before the commencement date but not awarded yet?

Saving provisions will be included in secondary legislation, the Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024, meaning you will continue to apply the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 to procurements that started under these rules, irrespective of those regulations being revoked.

The saving provisions detail when a procurement is considered to have started under each set of the old regulations. Generally this will be when:

a notice for the purpose of inviting tenders, requests to be selected to tender or to negotiate, or requests to participate in relation to a contract or framework agreement has been published. This would usually be in the form of a Contract Notice^{[footnote 5]};
a contract or framework agreement has been entered into;
supplier(s) have been contacted to seek an offer or expression of interest in relation to a live contract or framework agreement;
a voluntary transparency notice has been published;
a below threshold contract opportunity has been published;
a Utilities Notice on the existence of a Qualification System that acts as a call for competition has been published under the UCR 2016;
a sub-contract Notice has been published under the DSPCR 2011.

What about call off contracts based on frameworks awarded under the old rules?

You will continue to apply the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 to frameworks awarded under these rules and to the call off processes under those frameworks until the termination of the last call off contract to finish as a result of an award made within the life of that framework.

What about dynamic purchasing systems awarded under the old rules?

You will continue to apply the Public Contracts Regulations 2015, Concession Contracts Regulations 2016 and Defence and Security Public Contracts Regulations 2011 to dynamic purchasing systems including the call off processes under those rules until the termination of the last contract awarded by reference to the DPS within its lifetime.

What about qualification systems awarded under the old rules?

You will continue to apply the Utilities Contracts Regulations 2016 to qualification systems including the call off processes under those rules until the end of the last contract awarded by reference to the QS within its lifetime or where it has an unlimited duration, the end of the last contract by reference to the QS before its termination.

FAQs

If a contracting authority has commenced or completed pre-market engagement under the old regime, but had not advertised prior to the new regime coming into force, they will not need to rewind the process and start the engagement over again, with a pre-market engagement notice. Instead, it will be able to explain the position on pre-market engagement in its tender notice.
If a contracting authority has published a Prior Information Notice without inviting expressions of interest or taking other steps outlined above which constitute the start of a procurement, then the contract must be procured under the new regime.
Under the new regime, a Payment Compliance Notice should be published, in accordance with section 69, within 30 days of the end of each six month period. However, it is expected that the digital capability to publish Payment Compliance Notices will not be available until later in 2025. As such, contracting authorities do not have to publish these notices until section 69 is commenced, which will be some time after the new regime comes into effect. However, it should be noted that the requirement to publish payment information in accordance with regulation 113(7) of the Public Contracts Regulations 2015 will continue in respect of contracts procured under the old regime.
It is also likely that the digital capability to publish information required under section 70 (information about payments under public contracts) and section 71 (assessment of contract performance) will not be available until later in 2025. These provisions will not be commenced until the capability is in place and therefore any relevant reporting will be delayed.

What about contract amendments to contracts awarded under the old rules?

Any contract amendments required after the commencement date are subject to the provisions in the old regime that regulate contract modifications and amendments.

What about new requirements in the Procurement Act 2023 that are not tied to the procurement process?

Where the changes are not tied to the process of an individual procurement, for example the publication of pipeline notices or the reporting of spend data, the obligations under the Procurement Act 2023 will start when the relevant section is commenced.

Can you delay starting a procurement because you want to wait for the new regime?

It depends on whether the delay of the procurement exercise requires an existing contract to be extended or not. If the tender is for a new requirement and the CA can cope with the delay then the delayed procurement could benefit from the additional flexibility provided by the new regime. However if a contract needed to be extended to cover the gap created by delaying the procurement then the existing contract can only be extended in accordance with the relevant modification provisions in the applicable set of old regime regulations.

1. Exemptions cheat sheet: Wales

This cheat sheet is a quick reference guide to all of the exemptions or differences for devolved Welsh authorities and procurements under a devolved Welsh procurement arrangement within the Procurement Act 2023.

A contracting authority which is a devolved Welsh authority within the meaning given by section 157A of the Government of Wales Act 2006 is a devolved Welsh authority.

A contracting authority that is a public undertaking or private utility is to be treated as a devolved Welsh authority for the purposes of this Procurement Act 2023 if:

a. it operates wholly or mainly in relation to Wales, and

b. its activities are wholly or mainly activities that do not relate to reserved matters

Otherwise, a contracting authority is to be treated as a devolved Welsh authority for the purposes of this act if the authority’s functions:

a. are exercisable wholly or mainly in relation to Wales, and

b. are wholly or mainly functions that do not relate to reserved matters

A procurement arrangement is a devolved Welsh procurement arrangement if:

a. the framework was awarded by a devolved Welsh authority

b. the dynamic market was established by a devolved Welsh authority

c. the centralised procurement authority that carried out the procedure is a devolved Welsh authority, or

d. a devolved Welsh authority is designated the lead authority in the tender or transparency notice

Scope, definitions and general principles

Regulated below-threshold contracts: procedure (sections 85 to 88)

A devolved Welsh authority (unless the contract is to be awarded as part of a procurement under a reserved procurement arrangement) or a procurement under a devolved Welsh procurement arrangement will not be prohibited from restricting the submission of tenders by reference to an assessment of a supplier’s suitability to perform the contract.

The national procurement policy statement (section 13)

The national procurement policy statement does not apply to:

a devolved Welsh authority, except in relation to procurement under a reserved procurement arrangement.

The Wales procurement policy statement (section 14) applies to procurement by a devolved Welsh authority or under a devolved Welsh procurement arrangement.

Transparency

A contracting authority is a “transferred Northern Ireland authority” if its functions:

a. are exercisable only in or as regards Northern Ireland, and

b. are wholly or mainly functions that do not relate to reserved or excepted matters (within the meaning given by the Northern Ireland Act 1998)

A contracting authority that is a public undertaking or private utility is to be treated as a transferred Northern Ireland authority for the purposes of this act if:

a. it operates only in or as regards Northern Ireland, and

b. its activities are wholly or mainly activities that do not relate to reserved or excepted matters

A procurement arrangement is a transferred Northern Ireland procurement arrangement if, as part of it, a contract is awarded:

a. in accordance with a framework was awarded by a transferred Northern Ireland authority

b. by reference to a dynamic market established by a transferred Northern Ireland authority

c. following a procedure carried out by a centralised procurement authority which is a transferred Northern Ireland authority, or

d. following a procedure in which a transferred Northern Ireland authority is designated the lead authority in the tender or transparency notice

Scope, definitions and general principles

The national procurement policy statement (section 13)

The national procurement policy statement does not apply to a transferred Northern Ireland authority except in relation to procurement under a reserved procurement arrangement. It does not apply to any other contracting authority carrying out a procurement under a transferred Northern Ireland procurement arrangement.

Pipeline notices (section 93)

The requirement to publish pipeline notices does not apply to a transferred Northern Ireland authority.

Below-threshold contracts (part 6 - sections 84 to 88)

Procurements by a transferred Northern Ireland authority are exempt from the rules governing regulated below-threshold contracts, unless it is a procurement under a reserved procurement arrangement or a devolved Welsh procurement arrangement.

Transparency

Pipeline notices (section 93)

The requirement to publish pipeline notices does not apply to a transferred Northern Ireland authority.

Contract details notices and publication of contracts (section 53)

The requirement to publish a copy of the contract where the estimated value of the contract is more than £5 million does not apply to a contract awarded by a transferred Northern Ireland authority (unless it is awarded under a reserved procurement arrangement) or a transferred Northern Ireland procurement arrangement.

Contract change notices (section 75)

The requirement to publish contract change notices does not apply to a transferred Northern Ireland authority unless the contract was awarded as part of a procurement under a reserved procurement arrangement or a devolved Welsh procurement arrangement, or to a contract which was awarded as part of a transferred Northern Ireland procurement arrangement.

As a result, the obligation to publish the modification in question (section 77) also does not apply.

This cheat sheet is a quick reference guide to the exemptions and differences for light touch contracts within the Procurement Act 2023.

Section 9 (light touch contracts) of the Procurement Act defines light touch contracts as contracts wholly or mainly for the supply of services of a kind specified in regulations. These “light touch services” are set out in Schedule 1 to the Procurement Regulations 2024, using common procurement vocabulary(CPV) codes. The scope of services that canbe procured using a light touch contract has broadly remained the same as those in the light touch regime under the PCR 2015. Table 1 of Schedule 1 to the Procurement Regulations 2024 specifies the general light touch services, which includes:

health, social and related services
administrative social, educational, healthcare and cultural services
compulsory social security services
benefit services
other community, social and personal services including services furnished by trade unions, political organisations, youth associations and other membership organisations services
religious services
hotel and restaurant services
legal services (not otherwise exempt under the act)
other administrative services and government services
provision of services to the community
prison related services, public security and rescue services (not otherwise exempt underthe act)
investigation and security services
international services
postal services, and
miscellaneous services

Table 2 of Schedule 1 to the Procurement Regulations 2024 specifies additional light touch services, but only where those services are supplied under certain defence and security contracts.

Scope, definitions and general principles

Thresholds (schedule 1) - schedule 1 of the act will be amended to reflect the currently in force thresholds set out here

Light touch contract £663,540.

Light touch contract that is a concession contract £5,372,609.

Utilities contract that is a light touch contract £884,720.

Scope of the Procurement Act

The Procurement Act 2023 will not apply to procurements that are subject to the Health Care Services (Provider Selection Regime) Regulations 2023.

Transparency

Transparency notices (section 44)

A transparency notice is not required when awarding a contract via a direct award on the ground of user choice.

Contract award notices (section 50)

A contract award notice is not required when awarding a contract via a direct award on the ground of user choice.

Contract details notices (section 53)

Contract details notices are required for light touch contracts, but there is a longer time period for these notices to be published - 120 days instead of 30 days.

Where the estimated value of the light touch contract is over £5 million, a copy of the contract must be published but there is a longer time period of 180 days instead of 90 days to publish.

A contract details notice is not required when awarding a contract via a direct award on the ground of user choice.

Assessment of contract performance (section 71)

The requirement to publish contract performance notices for poor performance or breaches of contract does not apply to light touch contracts.

Contract change notices (section 75)

The requirement to publish a contract change notice (or a copy of the amended contract) does not apply to light touch contracts.

Contract termination notices (section 80)

A termination notice is not required when the terminating contract was awarded via a direct award on the ground of user choice.

Procedures

Duty to consider lots (section 18)

The duty to consider lots is now also mandated for light touch contracts.

Time limits (section 54)

There are no minimum timescales for notices before or duration of tender process in light touch contracts.

Mixed Procurement: Special regime contracts(section 10)

Where a contract is not solely for light touch services, the mixed procurement special regime rules also need to be applied.

Direct Award Grounds (section 41 and schedule 5)

A new ground for user choice has been introduced to allow direct awards for user choice services which are:

services that are light touch as identified by the CPV codes,
for the benefit of a particular individual (enduser), and
services where the contracting authority would be legally required to consider the views of the end user, or their carers, in relation to the supply of services

To use this ground, you must meet the following conditions:

the end user or their carer has expressed a preference as to which supplier should provide the services or there is only one supplier capable of providing the service,

and

the contracting authority considers that a competitive tendering process would not be in the best interests of the end user

Transparency notices (section 44)

A transparency notice is not required when awarding a contract via a direct award on the ground of user choice.

Competitive flexible procedure

Time limits (section 54)

There are no minimum procurement time scalesfor light touch contracts.

Modifying a section 19 procurement (section 31)

For light touch contracts there is greater flexibility to make any necessary modifications to a procurement procedure which is underway. Section 31 (Modifying a section 19 procurement) allows modifications to be made, even if considered to be substantial, up until the final tender deadline. When making such modifications you:

should still have regard to the procurement objectives (see section 12) and consider revising any applicable timescales as a result of such modification (see section 54)
must also revise and republish the tender notice (and update any associated tender documents) if they are impacted by the modification or the revised timescales and
must also notify the participating suppliers of such changes at the same time, where a participation period applies (see section 54)

Reserving contracts to public service mutuals(section 33)

In respect of certain, specified light touch contacts, the ability to reserve contracts to qualifying public service mutuals has been retained as long as the contract term is for 5 years or less. To be a qualifying public service mutual, the organisation must not have entered into a reserved contract for the same kind of light touch services with the same contracting authority in the previous 3 years.

Where a contract is being reserved to a public service mutual, only the competitive flexible procedure can be used.

Table 1 in Schedule 1 to the Procurement Regulations 2024 specifies reservable light touch service by the letter “R” in column 3.

Frameworks and dynamic markets

Frameworks: Maximum term (section 47)

The maximum term does not apply to a light touch framework (the maximum terms under section 49 for open frameworks do apply).

Framework requirements (section 45)

If the framework is a light touch contract (i.e. the framework is wholly for the purposes of light touch services) it is permissible for contracting authorities to award a contract directly to a supplier without carrying out a competition.

Frameworks: competitive selection process(section 46)

These requirements under this section do not apply to a framework that is a light touch contract.

Supplier selection

Meaning of excluded and excludable supplier(section 57), and

Considering whether a supplier is excluded or excludable (section 58)

Exclusion grounds now apply in full to light touch contracts in the same way as other public contracts, meaning that contracting authorities awarding light touch contracts must now consider whether a supplier is an excluded or excludable supplier based on the exclusion grounds before assessing their tender.

Assessment and award

Award criteria (section 23)

Where the light touch contract is centred upona particular individual or service recipient (enduser), there are some additional flexibilities that can be considered to ensure the most appropriate outcome. Under section 23(6) of the Act there is the ability to consider certain views and needs of the end user/service recipient inthe award of contracts which are for the benefit of an end user/service recipient.

In such contracts the award criteria may also make reference to:

the views of the individual service recipient for whose benefit the service is being provided or of a person providing care to that individual service recipient in relation to:

a. who should supply the services, and

b. how and when they should be supplied;

the different needs of different service recipients;
the importance of proximity between the supplier and service recipients for the effective and efficient supply of the services