PROCUREMENT ACT 2023 Get ready for the new public procurement regime!

Raechel Slattery Jo Pickering

Jo has been a partner at Sharpe Pritchard since 2001 and has extensive experience of acting in connection with a wide range of commercial property matters, with a particular specialism advising on large scale and complex regeneration and development projects. She heads up the firm’s real estate department and advises on all aspects of commercial property law, acting for a wide range of public and private sector clients. She has many years’ experience in advising on all land and property related aspects arising on numerous infrastructure projects, mixed use schemes, waste, renewable energy and transport sectors.  Jo regularly advises local authorities on the public procurement regime particularly as it applies to development agreements and land transactions, and has extensive experience of delivering regeneration and development projects though competitive dialogue and other procurement routes.  Raechel is a commercial contracts and public procurement specialist at Sharpe Pritchard, providing clients with targeted and strategic legal advice to ensure the successful delivery of large scale and complex outsourcing projects. She advises clients in central and local government across a wide range of sectors including education, waste and infrastructure, IT, facilities management, health and social care, and leisure services.  Raechel has extensive experience of advising on outsourcing projects conducted under the restricted, open and competitive dialogue and competitive procedure with negotiation, as well as below threshold procurements, and those that fall under Schedule 3 of the Public Contracts Regulations 2015. She also advises on contractual issues that may arise post-award, including the legality of contract variations.

Jo and Raechel gave Eastern Branch members an account of the new procurement regime and kindly agreed to follow it up with this article. Here, the authors emphasise that all public authorities who currently carry out functions under current regulations will need to become familiar with the new regime. 

The Procurement Bill was given Royal Assent on 26 October 2023. It was previously thought that the Procurement Act 2023 (the “Act”) would ‘go live’ in October 2024; however Cabinet Office announced on 12 September 2024 that it will now go-live on 24 February 2025, to allow time for a new National Procurement Policy Statement (NPPS) to be produced (Written statements - Written questions, answers and statements - UK Parliament) 

It is important for those involved in public procurement to become acquainted with the Procurement Act, as it provides the basis for the associated secondary legislation, guidance and electronic registers under the new public procurement regime. 

As a starting point for navigating the new regime, we identify some key themes below. 

Key themes 

A single Act 

The Procurement Act repeals the Public Contracts Regulations 2015 (the ‘PCR’), Utilities Contracts Regulations 2016, Concessions Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011 and consolidates these into a single piece of primary legislation. All public authorities who currently carry out functions under these regulations will need to become familiar with the Act. 

Secondary legislation 

While the Procurement Act does consolidate the previous regulatory regime, it is supplemented by secondary legislation: 

Procurement Regulations 2024 (the ‘Regulations’) 

The provisions of the Regulations will largely come into force alongside the Procurement Act, and the Procurement Act must be read alongside the Regulations. 

The Regulations cover the following: 

• The notices to be published on the Central Digital Platform 

• The required content for all PA 23 notices 

• The required content for assessment summaries 

• The specification of ‘light touch services’ 

• The specification of ‘central government authorities’ 

• The specification of ‘works’. 

Procurement Act 2023 (Commencement No. 3 and Transitional and Saving Provisions) Regulations 2024 (the ‘No. 3 Regulations’) 

The No. 3 Regulations specify when the majority of the Procurement Act provisions will come into force and clarify that procurements, contracts, frameworks or Dynamic Purchasing System (DPS) commenced or procured under PCR will continue to be procured or managed under PCR. 

National Procurement Policy Statement 

While not technically ‘secondary legislation’, s13(9) PA 23 requires authorities to “have regard to the national procurement policy statement”. As stated above, we await the publication of the new NPPS, which will set out the new government’s “priorities for public procurement”. 

New procurement objectives 

Section 12 of the Act introduces procurement ‘objectives’, replacing the concept of the ‘principles of procurement’ found in Regulation 18 of the PCR. These are: 

• 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 

• treating suppliers the same unless a difference between suppliers justifies different treatment 

• having regard to ‘the fact that small and medium-sized enterprises may face particular barriers to participation, after which they should ‘consider whether such barriers can be removed or reduced’. 

Contracting authorities should note this move away from European ‘Treaty principles’ and look out for future guidance on their practical application. 

Competitive Flexible Procedure 

The new competitive flexible procedure (s20(2)(b)) is a consolidation of the restricted procedure, competitive procedure with negotiation, competitive dialogue, innovation partnership and design contests, under current procurement regulations. 

The Act retains features of procedures under the PCR: 

• The Open Procedure (s20(2)(a)) 

• Light Touch Contracts (s9) are granted a relaxation of the rules akin to the ‘light touch regime’ in Schedule 3 of the PCR 

• The Negotiated Procedure without Prior Publication in regulation 32 of the PCR is captured through Direct Award Procedures in the Act: the ‘Direct award in special cases’ (s41 & Schedule 5), the ‘Direct award to protect life, etc’ (s42) and ‘Switching to direct award’ (s43). 

Notice requirements 

All notices under the Act will need to be published on the Central Digital Platform. The Regulations provide the detail on what the notices will need to include – in some cases adding to, and in other cases supplementing the relevant notice provisions in the Act. 

The Regulations also set out must be included in the Assessment Summaries to be provided to tenderers prior to the publication of notices. 

The procurement notices to be published under the Act are set out in the diagram including optional notice and those that are only mandatory in certain circumstances. 

Notices under PA23

Additionally, s52 requires contracting authorities to set and publish at least three KPIs ahead of entering a contract with an estimated value of more than £5 million (except where certain exceptions apply). S71 requires the assessment, and publication of information following the assessment, of the supplier’s performance against the KPIs. 

More generally, s98 states that contracting authorities must keep records of the rationale behind any material decisions they make when awarding public contracts. They must also keep records of any communication between themselves and the suppliers made in relation to the award, before the contract is entered into. 

Contract modifications 

S74 provides grounds on which modifications to an existing contract are justified under the Act. 

Permitted contract modifications: these are listed at Schedule 8, and are cases where there is: 

• A modification which was ‘“unambiguously” provided for in the contract 

• Urgency and the protection of life 

• Unforeseeable circumstances 

• Materialisation of a known risk 

• Additional goods, services or works 

• Transfer on corporate restructuring 

• Defence authority contracts. 

S74 also permits modifications that are not substantial (which are defined in S74(3)) as well as “below threshold modifications” (which are defined in S74(4)). 

In ‘live’ procurements where the contract term is likely to extend beyond February 2025, proposed modifications to a contract, framework or DPS procured under PCR must be made in accordance with s72 PCR. Essentially, s72 PCR will continue to apply to ‘old contracts’ procured under PCR. 

What next? 

As well as getting familiar with the intricacies of the Act and associated secondary legislation, keep a close eye on guidance such as Procurement Policy Notes, guidance notes issued by the Cabinet Office which address all aspects of the new regime, as well as communications from Cabinet Office on its learning and development programmes. You can sign up to the Cabinet Office’s Transforming Public Procurement - GOV.UK (www.gov.uk) updates to ensure that you receive the latest news and are notified when new guidance is issued. 

Note: This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this article was first published. Sharpe Pritchard advises contracting authorities and utilities on all manner of public procurement matters. Our experts are on hand to guide you through the intricacies of the existing and new procurement regimes. Please contact us for further information.