Procurement in a Nutshell – Procurement Act 2023: Commencement & Transitional Regulations 2024

On 26^th October 2023 the Procurement Bill received Royal Assent and is now expected to come into force on 28th October 2024.

The Act will, in particular, revoke the following:

• Public Contracts Regulations 2015 (PCR)
• Concession Contracts Regulations 2016
• Utilities Contracts Regulations 2016

What this Nutshell covers

This Nutshell will detail the commencement and transitional arrangements for the introduction of the Procurement Act 2023 which contracting authorities ought to be aware of.

Key points

On 22 May 2024, the Government introduced the Procurement Act 2023 (Commencement No 3 and Transitional and Saving Provisions) Regulations 2024.

The regulations bring into force, on 28^th October 2024, the majority of the provisions within Procurement Act 2023.

The regulations also introduce transitional and savings provisions which determine which legislation applies to procurements that have already been commenced under the previous legislation, such as the Public Contracts Regulations 2015.

These arrangements were further outlined in the Government’s Guidance: transitional and saving arrangements, which was published on 24 May 2024.

In particular, under the regulations:

• Procurements that commence after the entry into force of the Act (28^th October 2024) must be conducted by reference to the Act only.
• Contracts awarded under the previous legislation will continue to be managed under that legislation until the contract (or commercial tool, such as a contract awarded under a framework agreement, dynamic purchasing system or qualification system) ceases to exist.
  • This means that contracting authorities can only modify contracts awarded using the provisions set out in previous legislation such as regulation 72 of the PCR.
  • Contracting authorities should also only use notices pertaining to the previous legislation.
• Procurements (including for below-threshold contracts) commenced under previous legislation will be governed by that legislation. Any resulting contracts will continue to be managed (which includes modified and terminated) under the previous legislation until:
  • The end of the contract
  • Where no contract is awarded, when the procurement process is abandoned
  • Where it is a framework agreement, the end of the last contract awarded under the framework agreement during the term of the framework arrangement
  • Where it is a dynamic purchasing system, the end of the last contract awarded under the dynamic purchasing system during the term of the dynamic purchasing system.

The regulations prescribe when a procurement will have been “commenced” for the purposes of any transitional or savings provision:

Competitive procurements:

• A competitive procurement is ‘commenced’ when:
  • Before 26th May 2023 a PIN was used as a call for competition by a sub-central contracting authority; or
  • A contract notice has been submitted to be published under the previous legislation;
  • A voluntary transparency notice is published under the PCR (see regulation 99(3)(b) and (4)); or
  • a below-threshold contract opportunity is published under the PCR (see regulation 110).

• Where a PIN has been published before the Act comes into force, but has not been used as a call for competition by a sub-central contracting authority prior to 26th May 2023, the procurement must be carried out under the Act and not the previous legislation.

Negotiated procedure:

• Where a contracting authority has contacted a supplier with the intention of entering into a contract with it under regulation 32 of the PCR, the procurement is deemed to have been commenced.

Pipeline Notices:

• Under previous legislation, there is no statutory obligation to publish a Pipeline Notice. However, where a public contract has been included on a ‘non-statutory’ Pipeline Notice before section 93 comes into force, but as at the date the Act comes into force the procurement for that public contract has not yet ‘commenced’, the procurement must be carried out under the Act.

Contracting authorities should also note that any dynamic purchasing system and qualification system established under the previous legislation must come to an end as set out when they were established, or by 27th October 2028 (four years after the new regime comes into effect), whichever is earlier.

Payments Compliance Notice

• The obligations in the Act in relation to the Payments Compliance Notice will apply to all contracts awarded by a contracting authority, not those just awarded under the Act.
• Once the ability to publish this information on the central digital platform is available, contracting authorities will be required to include payments made or due under public contracts procured under the previous legislation in the Payments Compliance Notices.
• Contracting authorities should continue to publish their notices under regulation 113(7) PCR as they do currently, until the Payments Compliance Notice obligation under section 69 of the Act comes into force.

What does this mean?

While the majority of the Act will come into force on October 28^th, contracting authorities should note the fact that section 71 will not. This will come as a temporary relief to suppliers as section 71 places an obligation on contracting authorities to publish an assessment of contract performance, against the relevant KPIs, as well as publish information regarding any breach of contract (if applicable) or poor performance.

The transitional arrangements seek to minimise disruption following the implementation of the Act, allowing contracts awarded, or procurement commenced, prior to the 28^th, to be governed by previous legislation. That being said, contracting authorities should prioritize reviewing and understanding the new Act, as well as preparing for the increased administrative burdens it introduces. For support and guidance on the Act, please see our dedicated Nutshell series.

For further information please contact Melanie Pears or Tim Care in our Public Sector Team