Procurement Act 2023—key changesSTOP PRESS: As of 24 February 2025, the main provisions of the Procurement Act 2023 (PA 2023) are in force. Procurements begun on or after this date must be carried out under PA 2023, whereas those begun under the previous legislation (the Public Contracts Regulations 2015 (PCR 2015), the Utilities Contracts Regulations 2016, the Concession Regulations 2016, and the Defence and Security Public Contracts Regulations 2011) must continue to be procured and managed under that legislation. See Practice Note: Introduction to the Procurement Act 2023—PA 2023.IntroductionThe Procurement Act 2023 (PA 2023) is the new legislation that will govern public procurement. It will replace the Public Contracts Regulations 2015 (PCR 2015), SI 2015/102, the Utilities Contracts Regulations 2016 (UCR 2016), SI 2016/274, the Concession Contracts Regulations 2016 (CCR 2016), SI 2016/273 and the Defence and Security Public Contracts Regulations 2011 (DSPCR 2011), SI 2011/1848. On 12 September 2024, the government announced that the go-live date for PA 2023 will be delayed until 24 February 2025.Key changesPublic Contracts Regulations 2015Procurement Act 2023Scope and applicationBroader applicationThere are currently four sets of regulations covering procurement in England:—PCR 2015, SI 2015/102—UCR 2016, SI 2016/274—CCR 2016, SI 2016/273—DSPCR 2011, SI 2011/1848PA 2023 consolidates these regulations.Section 10(6) introduces the concept of ‘special regime contracts’ which are:—concession contracts—defence and security contracts—light touch contracts, and—utilities contractsEach special regime contract has specific sections in PA 2023 which will apply, in addition to the general rules elsewhere in PA 2023. The Cabinet office has produced PA 2023 guidance.Updated definitions and new terminologyDefined terms are set out in PCR 2015, SI 2015/102, reg 2.Key Definitions now has its own Part (PA 2023, ss 1–10).There are slightly amended versions of existing defined terms such as 'public contract' and 'contracting authority'.There are also new terms to describe the same thing, eg 'selection criteria' becomes 'conditions of participation' and 'declaration of ineffectiveness' becomes 'set aside proceedings', as well as new terms to describe existing concepts, eg ‘exempted contracts’ describes contracts not caught by PA 2023.Updated principles and objectivesPCR 2015, SI 2015/102 incorporates the EU Treaty Principles as follows:—transparency (see Practice Note: Transparency in procurement processes)—equal treatment—non-discrimination—proportionalityPA 2023, s 12 sets out the updated objectives:—delivering value for money—maximising public benefit—sharing information for the purpose of allowing suppliers and others to understand the contracting authority’s procurement policies and decision, and—acting, and being seen to act, with integrityThere is no explicit reference to proportionality here although PA 2023 requires contracting authorities to act proportionately throughout.PA 2023, s 12 includes an express requirement to treat suppliers the same, unless a difference between them justifies different treatment (providing suppliers are not put at an unfair advantage or disadvantage).PA 2023, s 13 requires contracting authorities to have regard to the National Procurement Policy Statement (NPPS), which is published here.Award of contracts and proceduresMEAT to MATUnder PCR 2015, SI 2015/102, a contract must be awarded to the supplier with the Most Economically Advantageous Tender (MEAT).Contracting authorities can apply quality / price weightings and may award on the basis of price alone. Quality can be weighted heavily but the overall approach is to award the contract to the supplier that offers the best value for money.See Practice Note: Using different evaluation methodologies for different types of public procurement.PA 2023, s 19(1) requires contracting authorities to award a contract to the supplier that submits the Most Advantageous Tender (MAT).This gives contracting authorities more discretion to use the award criteria that best meets its needs and doesn't need to take price into account (although, of course, public bodies will have a duty to achieve best value for money).New procedures with greater flexibilityCurrently, there are five procedures (excluding use of the negotiated procedure without prior publication—see direct award below):—open procedure—restricted procedure—competitive procedure with negotiation—competitive dialogue procedure—innovation partnershipContract award criteria cannot be amended once the procurement starts.See: Public procurement procedure selection—pre-PA 2023—flowchart [Archived].PA 2023, s 20 introduces the concept of the ‘competitive tendering procedure ’ which may be either:—a single-stage procedure (open procedure), or—any other competitive procedure that the contracting authority considers appropriate (competitive flexible procedure)The competitive flexible procedure offers contracting authorities greater flexibility to design the procedure, including amending award criteria / weightings after the procurement has started (providing this right has been reserved and complies with the timescales and conditions set out in PA 2023).PA 2023, s 31 also allows contracting authorities to modify the terms of the procurement before the tender deadline (in an open procedure) or the request to participate period has ended (in a competitive flexible procedure). Non-substantial modifications to the competitive flexible procedure can also be made before the tender deadline.Dynamic markets to replace DPSThe PCRs refer to Dynamic Purchasing Systems (DPS), which are suitable for common commodity-type contracts.PA 2023 extends the concept of DPSs into ‘dynamic markets’.The intention is dynamic markets can be used for more complex requirements.PA 2023, ss 34–40 describe how dynamic markets can be procured and operated. PA 2023, s 38 permits contracting authorities to charge suppliers a fee (this will be a % of the awarded contract value). This is a change from PCR 2015, SI 2015/102, reg 29 which prohibits this.Additional grounds for direct awardPCR 2015, SI 2015/102, reg 32 sets out circumstances in which a direct award can be made as follows:—where no suitable tenders have been received following an open procedure or restricted procedure—where the contract can only be performed by one supplier and one of three grounds apply, and—in situations of extreme urgency not attributable to the contracting authorityDirect award is permitted ‘in special cases’ PA 2023 by PA 2023, s 41 or Sch 5.Schedule 5 includes additional grounds for direct award, as well as those in PCR 2015, SI 2015/102, reg 32, including where:—the contract is for production of a prototype or supply of novel goods/services—the contract is for goods purchased on a commodity market (eg raw materials where tendering in the usual way would not be appropriate), and—in the context of insolvency proceedings, where a direct award will give advantageous terms to the contracting authority—the contract is for a light touch service which is a ‘user choice’ servicePA 2023, s 42 permits direct award where regulations are made by the government permitting this in order to protect life or health or protect public order or safety.New flexibility to conclude open frameworks up to eight years in durationPCR 2015, SI 2015/102, reg 33 sets out that frameworks may last for a maximum of four years (unless exceptional circumstances justify a longer term). New suppliers cannot join an existing framework.See Practice Note: Framework agreements—overview and tendering.'Closed' frameworks with a term of four years continue to exist.PA 2023, s 49 introduces an 'open' framework, which can last up to eight years. New suppliers can join during the term of the framework. The terms of the framework must remain the same.Standstill letters will become assessment summariesPCR 2015, SI 2015/102, regs 86 and 87 require contracting authorities to issue standstill / debrief letters to all tenderers. This letter starts the standstill period and needs to provide information about the preferred bidder, including the relative advantages and characteristics of its bid.See Practice Note: The standstill period.PA 2023, s 50 requires contracting authorities to publish a contract award notice notifying the market that it intends to enter into a contract. This notice starts the standstill period.Contracting authorities must issue ‘assessment summaries’ with feedback to all tenderers on the reasons for the scores. The concept of ‘relative advantages and characteristics’ has disappeared.Change to standstill periodThe current standstill period is ten calendar days, starting after the date ending on a working day.PA 2023, s 51 mandates a standstill period of eight working days, beginning with the day on which the contract award notice is published.There is no requirement to hold a standstill period for:—light touch contracts—contracts called off under a framework, or—dynamic market, or—where a direct award is made on the urgency or ‘protect life’ groundSupplier exclusion and debarmentSupplier exclusionPCR 2015, SI 2015/102, reg 57 sets out the mandatory and discretionary exclusion grounds.PCR 2015, SI 2015/102, reg 57(8)(g) provides a discretionary ground to exclude for serious poor performance where this has led to early termination / payment of damages or similar.See Practice Note: Eligibility and selection in public procurement—exclusion criteria.PA 2023 follows a similar approach but introduces new terminology:—‘excluded’ suppliers (excluded on a mandatory ground), and—‘excludable’ suppliers (excludable on a discretionary ground)Excluded suppliers must be excluded from the procurement, while contracting authorities may exclude excludable suppliers.PCR 2015, SI 2015/102, reg 57(8)(g) discretionary exclusion ground is expanded in PA 2023 to also include a situation where a supplier has ‘failed to remedy’ a breach following the relevant contracting authority having exercised a contractual right to require it to do so.A supplier can also be excluded / excludable if an associated supplier (a ‘relied on’ supplier such as a material sub-contractor) is itself excluded / excludable.New debarment listSuppliers may be excluded under PCR 2015, SI 2015/102, reg 57 under a mandatory or discretionary exclusion ground, but there is currently no obligation to notify any centralised body about this.PA 2023, ss 59–60 require that when a contracting authority has excluded a supplier, it must give notice to the Cabinet Office within 30 days of this exclusion. The Cabinet Office may then decide to investigate whether the supplier is actually an excluded supplier or an excludable supplier.PA 2023, s 62 then sets out that this report will establish whether the supplier should be added to a Debarment List (the supplier will be given notice and an explanation).Contract managementKPIs to be included in contracts over £5mThere are no requirements in PCR 2015, SI 2015/102 to include KPIs in contracts or to publish details of KPIs.PA 2023, s 52 requires that where a contract is valued at over £5m:—at least three Key Performance Indicators (KPIs) must be published via a Contract Performance Notice (and reported against at least every 12 months (PA 2023, s 71(2)))—the contracting authority must also publish where there has been a breach or failure to perform within 30 daysThis is not required if the contracting authority does not consider that performance of the contract can be assessed by reference to KPIs.It will not apply to framework agreements, utilities contracts, concession contracts, or light touch contracts.Implied payment termsTerms regarding prompt payment of invoices are implied into public contracts via PCR 2015, SI 2015/102, regs 113–113A.This continues in PA 2023 and is supported by a new obligation to publish a Payments Compliance Notice under PA 2023, s 69.Implied termination rightsPCR 2015, SI 2015/102, reg 73 implies a right to terminate where a PCR 2015, SI 2015/102, reg 72 modification has been made unlawfully or where a supplier should have been excluded from the procurement.This continues in PA 2023 but has been extended. PA 2023, s 78 allows termination where contracting authorities consider that the contract was awarded in material breach of PA 2023, or where a supplier, associated person, or sub-contractor has become an excluded or excludable supplier since the date of contract signature.Transparency and noticesPublication of contracts over £5mThere is an obligation to publish a Contract Award Notice but no obligation in PCR 2015, SI 2015/102 to publish a copy of the contract (although some contracting authorities, such as central government, may be required to do so under PPNs and transparency guidance).PA 2023, s 53 requires a notice similar to the current contract award notice under PCR 2015, SI 2015/102, but now called a ‘Contract Details Notice’, to be published within 30 days of the date of contract signature (or 120 days if it is a light touch contract).For contracts valued at over £5m, a copy of the contract must be published within 90 days from the date of contract signature (or 180 days for light touch contracts).Extended scope of contract change noticesPCR 2015, SI 2015/102, reg 72 requires contracting authorities to publish a contract modification notice in two of the six safe harbours for modifications.Contract change notices will be required for all modified contracts except where the amendment:—increases or decreases the value by less than 10% (for goods and services) or 15% (for works), or—increases or decreases the original contract term by less than 10% of the original contract termContract change notices will not be needed for light touch contracts.If the change is over £5m, this will be a ‘qualifying modification’ under PA 2023, s 77 and will require a copy of the modified contract to be published within 90 days of the date of the modification.Greater range of notices to be publishedTransparency is an important part of PCR 2015, SI 2015/102 and contracting authorities are required to publish various notices.Contracting authorities will now be required to publish notices covering the whole procurement journey, as follows (not all of these are mandatory):—Planned Procurement Notice (PA 2023, s 15)—Preliminary Market Engagement Notice (PA 2023, s 17)—Tender Notice (PA 2023, s 21)—Dynamic Market Notice (PA 2023, s 39)—Transparency Notice (PA 2023, s 44)—Contract Award Notice (PA 2023, s 50)—Contract Details Notice (PA 2023, s 53)—Procurement Termination Notice (PA 2023, s 55)—Payment Compliance Notice (PA 2023, s 69)—Contract Performance Notice (PA 2023, s 71)—Contract Change Notice (PA 2023, s 75)—Contract Termination Notice (PA 2023, s 80)—Below Threshold Tender Notice (PA 2023, s 87)—Below Threshold Contract Details Notice (PA 2023, s 87)—Pipeline Notice (PA 2023, s 93)Notices such as the Contract Performance Notice and Contract Termination Notice will make contract management information publicly available and represents a significant shift in the scope of the public procurement rules.