The Procurement Act 2023 (the "Act") is now in force (as of 24 February 2025). The Act provides for accompanying regulations which set out further information and detail in relation to the provisions made under the Act. The Procurement Regulations 2024 ("PR 2024") came into force at the same time as the Act and contain significant detail around certain aspects of the new public procurement regime established by the Act.
Further regulations have now been made under the Act. These are the Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 (the "PR 2025") which also came into force on 24 February 2025. The PR 2025 amend the Act to amend the threshold amounts (which are set out in the table below) and amend the PR 2024, The Health Care Services (Provider Selection Regime) Regulations 2023, and other primary and secondary legislation in order to give effect to the new procurement regime brought in under the Act.
This briefing focuses on the changes made to threshold amounts in the Act and the PR 2024. Please click here to read our briefing on the changes made to the Provider Selection Regime.
PA 23 - Schedule 1: Threshold Amounts
|
Type of contract |
Threshold amount (inclusive of VAT) |
|
Light touch contract (that is not a utilities contract or concession contract) |
£663,540 |
|
Concession contract |
£5,372,609 |
|
Works contract |
£5,372,609 |
|
Contract for the supply of goods or services to a central government authority |
£139,688 |
| Contract for the supply of goods or services to a sub-central government authority | £214,904 |
Key amendments to the PR 2024
- A new provision has been included at Regulation 11 PR 2024 (supplier’s connected person information) which states that where a connected person is a company registered under the Companies Act 2006 ("CA 2006"), the supplier must provide the connected person’s registration number under the CA 2006. Contracting authorities should therefore include a requirement for suppliers to provide this information in their tender documents.
- Regulation 13A (supplier’s exclusion grounds information) sets out the information that the supplier or connected persons must provide if they are subject to certain exclusion events which will assist contracting authorities in determining whether a supplier is excluded or excludable in accordance with section 58 of the Act. It states that suppliers must provide evidence that they:
- took the event seriously, for example by paying any fine or compensation
- took steps to prevent the event occurring again, for example by changing staff or management, or putting procedures or training in place, and
- committed to taking further preventative steps, where appropriate
- Where a contract has been directly awarded, the Transparency, Contract Award and Contract Details Notices must state which direct award justification in Schedule 5 of the Act applies and must include an explanation of why the contracting authority considers that it applies. The Contract Details Notice must also state which direct award justification ground (section 41(5) of the Act) applies and include an explanation as to why the contracting authority considers that it applies. Contracting authorities will therefore have to ensure that their justifications for directly awarding a contract are clearly set out and in accordance with the Act to avoid the risk of a challenge from an unsuccessful supplier.
- New provisions 42A (vertical arrangements), 42B (horizontal arrangements), and 42C (affiliated persons) have been inserted into the PR 2024 which set out how to calculate the percentage requirements to confirm whether a contracting authority controls or is affiliated with a person in order to determine whether the contract would be exempt under Schedule 2 of the Act (vertical and horizontal arrangements, often known as the "Teckal" and "Hamburg" exemptions). There are also further clarifications for utility activities under Schedule 4 of the Act regarding how to calculate the amount of gas or heat (Regulation 42D PR 2024), electricity (Regulation 42E PR 2024), or water (regulation 42F PR 2024) being procured.
Practical considerations
There are a number of transparency and information requirements for contracting authorities and suppliers to comply with under the Act and further detail is included the PR 2024. The PR 2025 have added to and clarified the PR 2024. We recommend that contracting authorities update their template tender packs and also work up template Transparency, Contract Award and Contract Details Notices which set out all of the information which the contacting authority must publish to ensure that they obtain the information required to comply with the provisions under the Act and the accompanying regulations.
We are working with clients to update their internal policies and guidance, tender documentation and template contracts to reflect the new legislation. Please contact DACB's procurement team for further information.
