Keep calm and "have regard": new duties in the Procurement Act 2023

The Procurement Act 2023 (the Act) has finally come into force. As we explained in our recent post, the Act constitutes a major overhaul of the existing regime with the new Act applying to contract award procedures commenced (through publication of a tender notice) on or after 24 February 2025.

Given the raft of new changes, this blog post will highlight one interesting new aspect that will certainly have caught the eye of many public lawyers at the very least: the new duties on contracting authorities to "have regard" and "consider" certain matters.

Key provisions

• Section 12(1) specifies four objectives which contracting authorities must have regard to the importance of when conducting a procurement. These include:
  • delivering value for money (a well-known phrase which means "optimising the use of public funds by balancing effectiveness, efficiency and economy over the life-cycle of a product, service or works to achieve the intended outcomes of the procurement" and includes "wider socio-economic and environmental benefits and impacts"¹);
  • maximising public benefit;
  • sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions (in other words, transparency); and
  • acting, and being seen to act, with integrity.
• Sections 12(2) and (3) impose duties related to equal treatment of suppliers (a familiar EU principle) but there is no reference to the other familiar concept of proportionality in section 12 (though there are references to it throughout to Act,² eg, section 20(3) where the contracting authority must ensure that the competitive tendering procedure is a "proportionate" means of awarding the public contract, "having regard" to the contract's nature, complexity and cost).
• Section 12(4) introduces a new obligation to "have regard" to the fact that small and medium-sized enterprises (SMEs) may face particular barriers to participation, and to "consider" whether such barriers can be removed or reduced.
• Section 13(9) requires contracting authorities to "have regard" to the new National Procurement Policy Statement (NPPS), which sets out the Government's strategic priorities for public procurement in order to achieve the overarching priority of delivering value for money:
  • Driving economic growth – Contracting authorities should drive economic growth and strengthen supply chains by giving SMEs and voluntary, community and social enterprises a fair chance at public contracts, creating high quality jobs and championing innovation;
  • Delivering social and economic value – Contracting authorities should deliver social and economic value that supports the Government's missions including by working in partnership across organisational boundaries; and
  • Building commercial capability to deliver value for money and stronger outcomes – Contracting authorities should ensure the right commercial capability standards are in place to procure and manage contracts effectively and to collaborate with other contracting authorities to deliver best value.

Challenging these duties

The phrase "have regard to" is very familiar to public lawyers and it often appears in guidance contexts where adherence by the relevant public authority is expected unless a clear, reasoned explanation is provided for deviation. Importantly, these new duties are generally enforceable in civil proceedings brought under Part 9 of the Act. The exception? The duties in section 12(4) (requirement to have regard to barriers facing SMEs) and 13(9) (requirement to have regard to the NPPS).³ Judicial review is likely to be the route of challenge there,⁴ which throws up some practical challenges for bidders around remedies whose focus at the post-contract award stage is more likely to be on damages, rather than the traditional remedies available in judicial review of quashing and remittal.  

Comment

Contracting authorities should ensure that they have robust processes in place to consider, and take action on, these new powers and obligations. And, of course, it is important to have record-keeping policies in place to record compliance.

Suppliers will likely remain in a "wait and see" position until a clear practice in respect of these duties has emerged once new procurements have progressed under the new regime. However, one step to take now is to get up to speed on the scope to challenge (whether under Part 9 of the Act or by way of judicial review) in order to ensure suppliers can consider all options (and their tight timelines) if an issue arises.