Procurement Act 2023 - The UK's new regime for public contracts

Government authorities and local bodies rely on a variety of goods and services provided by independent suppliers to help them perform many of their public duties. When awarding public contracts, authorities in the UK must comply with the procurement regime and ensure that they select suppliers using a fair and competitive process.

This regime, previously derived from EU law, has been replaced by the Procurement Act 2023, which following some delay was introduced on 24 February 2025. The new regime implements a myriad of changes requiring authorities and suppliers alike to re-think how they approach procurement procedures.

The Act applies to “contracting authorities” in England, Wales and Northern Ireland, a broad definition which covers both public authorities themselves and commercial undertakings carrying out contracts under public oversight. Scotland will adopt its own regime, but the Act also apples to Scottish cross-border authorities.

This article considers the following:

• the widened definition of “procurement”
• the reformulated “Procurement Objectives” that contracting authorities will need to adhere to
• updates to the tendering procedures that will be available, and how these are designed to introduce more flexibility
• the expanded reporting obligations imposed on authorities
• how suppliers may be compensated when obligations are breached, and time limits for making a claim

Definition of “procurement”

Whilst the previous regime focussed on how authorities awarded contracts, the Act’s new definition of “covered procurement” also includes the entry into and management of the contract. The new rules apply to “public contracts”, those being contracts above a value set by the Act and which are not exempt.

This means that the procurement rules need to be followed at every stage of the contract lifecycle, from pre-market engagement before a public contract is awarded through to its eventual termination.

Procurement objectives

Contracting authorities will now need to follow the newly formulated “Procurement Objectives” whenever they carry out a covered procurement. The objectives are phrased as follows:

• Delivering value for money
• Maximising public benefit
• Sharing information for the purpose of allowing suppliers to understand the authority's procurement policies and decisions
• Acting, and being seen to act, with integrity

If the objectives are not considered when any decision is made (including termination of a public contract), then an affected supplier may be able to challenge the decision in court.

The Act also includes additional requirements beyond the objectives, including obligations to:

• Ensure that it is proportionate to use a competitive tendering procedure to award a public contract;
• Treat suppliers the same (unless the circumstances justify otherwise);
• Factor in any National Procurement Policy Statements that the government has issued; and
• Consider any barriers to entry preventing small or medium-sized enterprises from participating in procurement procedures.

Changes to procedures

The Act also changes the procurement procedures that are available. Although there are now fewer procedures, they are designed to be more flexible and give authorities more options for how they enter contracts with suppliers:

Competitive tendering – As before, contracting authorities generally need to allow multiple suppliers to compete for a contract, using a permitted procedure. The number of procedures available has been reduced to just two, although more flexibility is granted compared to the previous regime:

• Open procedure – A single-stage procedure which remains largely unchanged. Any interested and eligible supplier can submit a tender, from which the contracting authority will choose the one which best furthers the objectives.
• Competitive flexible procedure – A non-prescriptive procedure which allows authorities to select a supplier over multiple stages, granting a large degree of freedom in how they structure the process. For example, authorities can limit the number of applicants that progress, pre-select potential suppliers to choose from, or impose minimum conditions before suppliers can apply.

Direct award – Contracting authorities can forego a competitive procedure if a prescribed justification applies, many of which carry over from the old regime. For example, as before an authority can award directly to a supplier if there are no competitors, or if IP rights make that supplier the only option, or if the supplier is an artist from whom the authority wishes to procure a unique work of art. However, a direct award can now also be made if:

• It is deemed necessary by regulations to protect life, health or public safety; or
• The contract is to supply “user choice services” – This covers services which are for the benefit of an individual, and either said individual has specified a particular supplier that they want or only one supplier can provide the service.

Frameworks – Contracting authorities can still draw up a list of pre-selected suppliers (or “framework”) for granting contracts, which lasts for a limited time. However, the Act also allows authorities to use an “open framework”, which new suppliers can be added to before it ends.  Open frameworks can allow for a limited or unlimited number of suppliers to join, although are generally limited to lasting for eight years and the Act requires authorities to “re-open” the framework to allow suppliers to join a certain number of times during its lifespan.

Reporting obligations

The Act also requires authorities to publish notices at various stages across the entire procurement lifecycle. These notices include but are not limited to:

• A notice confirming that it has undertaken preliminary market engagement;
• A “transparency notice” if it decides to make a direct award; and
• A notice confirming when a contract has ended.

Notices will now be published on a centralised digital platform, which will include an enhanced version of the previous “Find a Tender” service and what the government refers to as a new “Supplier Information Service”. Suppliers will be able to access both services using a single registration and will be assigned a unique identifier when they register.

Suppliers should also be aware that there may be more situations where they can be excluded from a procurement process by a public authority and be added to a central debarment list, although authorities will need to notify the Minister of the Crown within 30 days if they exclude a supplier or disregard a tender as a result. Suppliers may also be able to bring legal proceedings against the authority for being excluded, depending on the circumstances.

Remedies available to bidders

If an authority fails to comply with its statutory obligations, then an interested supplier will usually be able to bring a claim in the High Court (subject to limited exceptions). For example, a supplier may wish to challenge a decision to award the contract to a competitor, or if they have been awarded a contract, may take issue with the authority’s behaviour during the life of the contract. The Act is enforceable both by UK suppliers and non-UK suppliers in select jurisdictions, including the EU.

The remedies available mostly remain familiar to suppliers who are acquainted with the previous regime:

• Contract suspension – When an authority chooses a supplier, it must publish an award notice and cannot commence the contract during the standstill period of eight working days. If a rejected supplier applies to court within this period, then the contract will be temporarily suspended.
• Penalties before the contract has been entered into – If the court decides that a contract was awarded to a supplier unlawfully, then it can issue a broad range of remedies. For example, it can set aside the decision to award to the chosen supplier, require the authority to take any action (such as repeat its decision), award damages, or do anything else that it considers appropriate.
• Penalties after the contract has been entered into – If the court finds that the authority breached its obligations and the contract has already been entered into, then the contract might be set aside or reduced in duration or scope, and damages may also be awarded.

In most cases, suppliers will need to bring a claim within 30 days that they first knew (or ought to have known) of the breach that gave rise to their claim. However, if a supplier wishes to set aside a contract, which the authority did not publish a notice for when it was awarded, then the 30-day time limit still applies but a claim cannot be brought after 6 months have elapsed since the contract was entered into.

Next steps

The introduction of the new regime is accompanied by three services provided by the new “Procurement Review Unit”, which will oversee procurement activities. This includes the previous “Public Procurement Review Service”, allowing suppliers to anonymously raise concerns about how procurement practices are conducted, and a new “Procurement Compliance Service” to issue guidance for contracting authorities and a “Debarment Review Service” to investigate suppliers for misconduct.

Although the full effects of these changes will only be felt now that the regime has been introduced, the new duties and reporting obligations are likely to affect the ways in which contracting authorities interact with suppliers. Suppliers should also update themselves on the new procedures available, as the added flexibility may lead to some more variation between authorities in how they award contracts.

The provisions of the Act are detailed and are likely to have major implications for both public authorities and companies that supply to them. If you require assistance to ensure your procurement processes remain compliant, then please contact our commercial team.