Understanding the UK’s New Procurement Regime in 2025

The UK’s new Procurement Act 2023 (the “Act”) takes effect from 24 February 2025. Our view is that while there are a small number of important differences, which we discuss below, the majority of the processes outlined in previous legislation, remain unchanged, despite some changes in terminology.

A simplified, unified regime is welcomed. The Act replaces the previous legal framework, made up of the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Defence and Security Public Contracts Regulations 2011 and the Concession Contracts Regulations 2016, will be revoked and replaced by the Act. Previously, the UK’s procurement system relied on the EU’s framework, which was made up of multiple procedures. The UK has capitalised on its exit from the EU by replacing this approach with a single, flexible procedure that can be adapted to different types of procurements, including defence and security projects. Such changes are designed to simplify the procurement process and increase opportunities for companies bidding for contracts.

The regime will apply to businesses who participate in general public procurement contracts, utilities contracts, concession contracts, and defence and security contracts. Notably, however, the Act does not cover health care services procurements, which will operate within its own regime: the Healthcare Services (Provider Selection Regime) Regulations 2023, which came into force on 1 January 2024.

More opportunities for suppliers

The good news is that the changes are aimed at increasing competition and opportunities for suppliers. There is a recognition that contracts now typically have shorter durations than in the past, and a need to widen the pool of participants. This is reflected in changes to multiple stages of the procurement process:

• Notices: Companies should be able to access greater information about potential procurements. Under the old regime, one notice would have been published. Going forward, authorities may have to publish details of pipeline procurements.^[1] Earlier notice can provide further planning time for companies to prepare a strategy for a bid. One of the barriers for SMEs can be the short time frames to prepare a bid response with limited resources in comparison with larger companies. This change could help address this imbalance.
• An obligation to “lot”: the Act introduces a legal duty on authorities to consider dividing contracts into smaller lots.^[2] In theory, this should increase the number of opportunities to suppliers. If an authority chooses not to lot, an explanation should be provided in the tender notice. The suggestion here being that suppliers no longer need to be the one-stop shop, which should allow for more participants in the process. It is possible this increases the administrative burden on contracting authorities, having to run multiple bids in tandem for different lots.
• Removing barriers to entry: the Act introduces a requirement to consider SMEs and the barriers they face for participation and consider whether these can be removed or reduced Authorities therefore should factor in these considerations when designing and running a procurement process.^[3] However, there is currently no legal sanction for failing to demonstrate this has been undertaken.
• The basis for making an award: the basis of awarding contracts has changed to the “most advantageous tender”, which replaces the “most economically advantageous tender”.^[4] This is likely to grant the authority more discretion in awarding contracts to those who best meet all the assessment criteria. Is this a shift away from the focus on delivering value for money? Our view is that a broader definition could allow for socio-economic factors, such as cost of living and the environment being given more weight than under the prior regime. This change arguably gives authorities greater discretion over how and to whom it awards contracts.
• Debarment: contracting authorities will be able to exclude suppliers on various grounds, placing them on a publicly-available debarment list. These grounds can be broadly categorised as circumstances in which a company has failed to comply with its regulatory obligations, or for poor behaviour in a procurement process.^[5] The latter being an opportunity to see incumbent providers challenged by new participants. We will explore the issues surrounding debarment in a later article, as we expect this to be a fertile area for legal challenges under the new regime.

Changes to be aware of if successfully awarded a contract

To increase accountability and transparency, authorities will have a new power to measure a supplier’s performance against certain key performance indicators (KPIs) during the life-cycle of a contract. These KPIs must be set, and published in the contract details notice. Suppliers’ performance marked against those KPIs is then published, at least, once every twelve months. Therefore, there is a risk of reputational damage if a contract is underperformed. Such information is also likely to give an indication to the market as to the strength of the supplier’s performance and the chances of competing should the contract be re-tendered. Again, the quality of these assessments and their usefulness is likely to vary significantly across the various authorities based on, among other things, the resources available to carry out such assessments effectively.

Challenging procurement decisions under the new regime

Understanding the deadlines to bring a challenge in this process is critical if you are unsuccessful in your procurement bid. Two changes under the Act are:

• Set-aside proceedings: bidders’ rights to challenge awards are substantively unchanged, although the terminology of “declarations of ineffectiveness” have given way to “set-aside proceedings."^[6] As before, the time limit to commence set-aside proceedings is 30 days from the date the supplier knew, or ought to have known, of the circumstances giving rise to the claim. This time can be extended with good reason, but not beyond six months from the date the contract was entered into. For set aside proceedings, the rules regarding service of the Claim Form within seven days of it being issued do not appear in the Act. As that requirement is a deviation from the usual time limits for service of claim forms, it is possible that there may be an attempt to move away from this, however, our expectation is that claimants will be cautious and will want to do all they can to protect their claims, having gone to the effort of issuing and so we expect the existing seven-day limit for service to be adhered to.
• Standstill periods changed to eight working days: under the new regime, the Act provides that the standstill period should be eight working days from the day on which a contract award is published.^[7] This differs from the old regime, which required ten days to pass since the issue of a compliant award notice. There are exceptions where the standstill period does not apply, e.g. where there has been a direct award due to an “extreme or unavoidable” urgency, undoubtedly a response to the difficulties endured carrying out procurements during the COVID-19 pandemic.

The rationale behind the strict rules for challenging awards is understandable: the authorities and the successful bidder require finality and certainty so that the contract can begin, and services can be delivered. The success of any set-aside proceedings under the Act will invariably depend on suppliers being alive to these short timeframes. As ever, best practice is to engage lawyers at the start of the procurement process. That way, should the circumstances of a challenge arise, suppliers can be best-placed to exercise their rights under the Act and avoid missing any key deadlines, which is often fatal to meritorious claims.