Transition to the new Procurement Act

Contracting Authorities are governed by the Procurement Act 2023 (the Act) on how they purchase goods, works and services. In England and Wales, it replaces various sets of old Regulations, such as the Public Contracts Regulations 2015 (PCR).

Given the upcoming changes being brought into effect by the Act, we set out details of when the new Act and old Regulations apply. Under the UK Government’s Commencement Regulations , most provisions of the Act will come into full force on 28 October 2024.

Overview of the Transition

The Act received Royal Assent on 26 October 2023, with some provisions already in force since 19 January 2024. The full transition is formalised by the Commencement Regulations. These specify the transition mechanics from the current procurement regime to the new regime under the Act.

As a result, contracting authorities need to update their processes, procedures, and staff training to comply with the new rules with effect from that date.

Key Provisions and Transitional Arrangements

Commencement Details

Effective Date: Most provisions will take effect on 28 October 2024.
Current Provisions: Sections 115(2), (3), and (4) are effective from 23 May 2024, enabling Scottish Ministers to manage devolved Scottish procurement legislation.
Delayed Provisions: Transparency-related obligations, such as the publication of payment compliance notices and contract performance information, are not yet scheduled for enforcement.

Transitional Provisions

Existing Regime Continuation: Procurements or contracts “commenced” or awarded before 28 October 2024 will remain under the old Regulations.
The old Regulations are:

- Public Contracts Regulations 2015 (PCR)
- Utilities Contracts Regulations 2016 (UCR)
- Concessions Contracts Regulations 2016 (CCR)
- Defence and Security Public Contracts Regulations 2011 (DSPCR).
Validity Limits: Dynamic Purchasing Systems (DPS) procured under the old regulations will have validity limits. If they do not terminate before then, they will automatically expire on 27 October 2028. Interestingly, there are no such automatic expiry provisions for framework agreements, so a utilities framework procured in 2024 could continue in force for 8 years, not expiring until 2032.

Determining Which Legislation Applies

It’s crucial for contracting authorities to know whether the old or new rules apply to their procurements. Generally, this will be straightforward, but some cases will require a closer look. If a contracting authority prefers the new Act, it should be careful not to inadvertently commence a procurement under the old Regulations.

What Triggers a Procurement to “Commence” under the old Regulations?

Contract Notice Submission: The act of submitting (not publishing) a contract notice starts the procurement.
Direct Awards: Contacting a supplier with the intent to contract under the negotiated procedure without prior publication (or “direct award”) starts the procurement. In many cases this will be clear-cut, but sometimes contact between the contracting authority and the supplier is initially tentative and exploratory without a clear intent to make a direct award. If a contracting authority intends to direct award under the old Regulations, it would be worth making a file note of this before 28 October.
Below-Threshold Procurements: Publishing a below-threshold opportunity commences the procurement.
Voluntary Transparency Notice: Issuing this notice before 28 October also starts the procurement under the old Regulations.

Note that if there is a change to a contract awarded under the old Regulations, that change will be reviewed under those old Regulations (e.g. PCR, Regulation 72), not under the Act. In some cases, there are differences of approach to contract variation under the Act compared with the old Regulations.

What Doesn’t Trigger Commencement under the old Regulations?

Pipeline Notices: There will be no statutory mechanism for publishing a pipeline notice until 1 April 2025, so their publication doesn’t start a procurement.
Prior Information Notice (PIN): Under the old Regulations, a PIN could be used as a call for competition by sub-central contracting authorities (e.g. local authorities). Submitting a PIN for publication on or after 26 May 2024 can no longer commence a procurement under the old Regulations — so local authorities should no longer use a PIN as a call for competition.

Prompt payment reporting under “old” contracts

The Act changes the reporting requirements of contracts awarded under the old Regulations. Under the Act, contracting authorities must report every 6 months on their compliance with the rule that they should pay suppliers within 30 days. This varies the position for example under Regulation 113(7) of the PCR, which required annual publication.

National Procurement Policy Statement

The Government presented the Statement to Parliament on 13 May 2024, setting strategic priorities for public procurement, which contracting authorities must consider under section 13(9) of the Act.

Five National Priorities:

Value for Money: Emphasises balancing effectiveness, efficiency, and economy, including socio-economic and environmental impacts.
Social Value: Focuses on resilient businesses, innovation, climate change, and waste reduction.
SMEs: Encourages reducing barriers to open procurement opportunities for small and medium-sized enterprises.
Commercial Delivery: Recommends using Government’s Playbook series for best practices in commercial delivery.
Skills and Capability: Stresses the importance of having skilled procurement and contract management teams.

The Statement effectively codifies a number of provisions that have long been seen as good practice. Under the Act, contracting authorities must have regard to the Statement. As the Statement has already been published, many contracting authorities are likely to choose to have regard to the Statement with immediate effect, even though it will not be mandatory under the Act comes into force of 28 October 2024.

Comment

Although the underlying principles are largely unchanged, the Act introduces significant changes to the UK procurement regime, requiring contracting authorities to update their processes and train staff extensively. With just under three months until full implementation, contracting authorities face significant resource and compliance challenges. The new regime emphasises value for money, social value, SME participation, and transparent procurement processes. It is supported by the Statement and Implementing Regulations, which flesh out the detail of the Act, particularly in relation to the publication of the many notices now required, to ensure fairness and transparency in public procurement.