Procurement Act 2023

• Citation: 2023 c. 54
• Sections: 350

Section 1 Procurement and covered procurement

(1) In this Act—

(a) “ procurement ” means the award, entry into and management of a contract;

(b) “ covered procurement ” means the award, entry into and management of a public contract.

(2) In this Act, a reference to a procurement or covered procurement includes a reference to—

(a) any step taken for the purpose of awarding, entering into or managing the contract;

(b) a part of the procurement;

(c) termination of the procurement before award.

(3) In this Act, a reference to a contracting authority carrying out a procurement or covered procurement is a reference to a contracting authority carrying out a procurement or covered procurement—

(a) on its own behalf, including where it acts jointly with or through another person other than a centralised procurement authority, and

(b) if the contracting authority is a centralised procurement authority—

(i) for or on behalf of another contracting authority, or

(ii) for the purpose of the supply of goods, services or works to another contracting authority.

(4) In this Act, “ centralised procurement authority ” means a contracting authority that is in the business of carrying out procurement for or on behalf of, or for the purpose of the supply of goods, services or works to, other contracting authorities.

Section 2 Contracting authorities

(1) In this Act “ contracting authority ” means—

(a) a public authority, or

(b) in the case of a utilities contract, a public authority, public undertaking or private utility,

other than an excluded authority.

(1A) But see also section 83B(5)(b)(i) (which provides for “contracting authority” to have an extended meaning in relation to certain contracts regulated under Part 5A (outsourcing: protection of workers)).

(2) In this Act—

“ public authority ” means a person that is—

wholly or mainly funded out of public funds, or

subject to public authority oversight,

and does not operate on a commercial basis (but see subsections (9) and (10));

“ public undertaking ” means a person that—

is subject to public authority oversight, and

operates on a commercial basis;

“ private utility ” means a person that—

is not a public authority or public undertaking, and

carries out a utility activity.

(3) A person is subject to public authority oversight if the person is subject to the management or control of—

(a) one or more public authorities, or

(b) a board more than half of the members of which are appointed by one or more public authorities.

(4) The following are examples of factors to be taken into account in determining whether a person operates on a commercial basis—

(a) whether the person operates on the basis that its losses would be borne, or its continued operation secured, by a public authority (whether directly or indirectly);

(b) whether the person contracts on terms more favourable than those that might reasonably have been available to it had it not been associated with a public authority;

(c) whether the person operates on a market that is subject to fair and effective competition.

(5) The following authorities are excluded authorities—

(a) a devolved Scottish authority , except where a devolved Scottish authority carries out procurement falling within section 115A ;

(b) the Security Service, the Secret Intelligence Service and the Government Communications Headquarters;

(c) the Advanced Research and Invention Agency;

(d) any person that is subject to public authority oversight—

(i) only by reference to a devolved Scottish authority, or

(ii) by reference to an authority mentioned in paragraph (b) or (c).

(6) An authority is a “devolved Scottish authority” if its functions are exercisable only in or as regards Scotland, and—

(a) none of its functions relate to reserved matters, or

(b) some of its functions relate to reserved matters and some do not.

(7) A contracting authority that is a public undertaking or private utility is to be treated as a devolved Scottish authority for the purposes of this Act if it operates only in or as regards Scotland, and—

(a) none of its activities relate to reserved matters, or

(b) some of its activities relate to reserved matters and some do not.

(8) In this Act, a reference to a devolved Scottish authority includes a reference to an authority that is to be treated as a devolved Scottish authority for the purposes of this Act.

(9) In this Act, a reference to a public authority includes a reference to the Common Council of the City of London.

(10) For the purposes of this Act, a person that operates on a commercial basis but is, as a controlled person, awarded an exempted contract by a public authority in reliance on paragraph 2 of Schedule 2 (vertical arrangements) is to be treated as a public authority in relation to any relevant sub-contract.

(11) This Act does not apply to His Majesty acting in his private capacity.

(12) In this section—

“ relevant sub-contract ” means a contract substantially for the purpose of performing (or contributing to the performance of) all or any part of the exempted contract;

“ reserved matters ” has the same meaning as in the Scotland Act 1998.

Section 3 Public contracts

(1) A “public contract” is a contract of a kind specified in subsection (2), (3) or (4).

(2) Any contract for the supply, for pecuniary interest, of goods, services or works to a contracting authority which—

(a) has an estimated value of not less than the threshold amount for the type of contract, and

(b) is not an exempted contract.

(3) Any framework which—

(a) has an estimated value of not less than the threshold amount for the type of contract, and

(b) is not an exempted contract.

(4) Any concession contract which—

(a) has an estimated value of not less than the threshold amount for the type of contract, and

(b) is not an exempted contract.

(5) Schedule 1 sets out the threshold amounts.

(6) Schedule 2 sets out contracts that are exempted contracts for the purposes of this Act.

Section 4 Valuation of contracts

(1) For the purposes of this Act, the “estimated value” of a contract is its value for the time being estimated by a contracting authority.

(2) A contracting authority that estimates the value of a contract must do so in accordance with Schedule 3.

(3) A contracting authority must not exercise a discretion in connection with estimating the value of a contract with a view to securing that any requirement of this Act does not apply in relation to the contract.

Section 5 Mixed procurement: above and below threshold

(1) Subsection (3) applies if, on award of a below-threshold contract other than a framework, a contracting authority considers that—

(a) certain of the goods, services or works to be supplied under the contract could reasonably be supplied under a separate contract, and

(b) that contract would have an estimated value of not less than the threshold amount for a contract of its type.

(2) Subsection (3) applies if, on award of a below-threshold contract that is a framework, a contracting authority considers that—

(a) certain of the goods, services or works to be supplied under contracts awarded in accordance with the framework could reasonably be supplied under a contract not awarded in accordance with the framework, and

(b) that contract would have an estimated value of not less than the threshold amount for a contract of its type.

(3) The contract is to be treated as having an estimated value of not less than the threshold amount for the type of contract.

(4) In considering whether goods, services or works could reasonably be supplied under a separate contract, a contracting authority may, for example, have regard to the practical and financial consequences of awarding more than one contract.

(5) In this Act “ below-threshold contract ” means—

(a) a contract for the supply, for pecuniary interest, of goods, services or works to a contracting authority,

(b) a framework, or

(c) a concession contract,

that has an estimated value of less than the threshold amount for the type of contract.

(6) This section does not apply to a contract awarded in accordance with a framework.

Section 6 Utilities contracts

(1) In this Act, “ utilities contract ” means a contract for the supply of goods, services or works wholly or mainly for the purpose of a utility activity.

(2) In this Act, “ utility activity ” means an activity that—

(a) is specified in Part 1 of Schedule 4,

(b) is not specified in Part 2 of Schedule 4,

(c) is not carried out wholly outside the United Kingdom, and

(d) in the case of an activity carried out by a person that is not a public authority or public undertaking, is carried out pursuant to a special or exclusive right.

(3) A person carries out a utility activity pursuant to a “special or exclusive right” if—

(a) the person (whether alone or with others) has been granted a right to carry out the activity pursuant to any statutory, regulatory or administrative provision, and

(b) that provision also substantially limits the ability of persons not granted the right to carry on the activity.

(4) But a right to carry out a utility activity is not a “special or exclusive right” if it is granted—

(a) following award under section 19 (competitive award), or

(b) otherwise pursuant to a procedure in which—

(i) the opportunity to be granted the right was publicised widely enough to avoid an artificial narrowing of competition, and

(ii) the grant of the right was based on criteria that did not favour or disadvantage certain persons.

(5) An appropriate authority may by regulations amend Part 2 of Schedule 4 for the purpose of—

(a) specifying an activity, or

(b) removing an activity.

(6) Regulations under subsection (5) may not specify an activity unless the authority is satisfied that—

(a) the activity is carried out on a market that is subject to fair and effective competition, and

(b) entry to that market is unrestricted.

(7) In this Act, a reference to a utilities contract includes a reference to a framework for the future award of contracts for the supply of goods, services or works wholly or mainly for the purpose of a utility activity.

Section 7 Defence and security contracts

(1) In this Act, “ defence and security contract ” means a contract for the supply of—

(a) military equipment;

(b) sensitive equipment;

(c) goods, services or works necessary for the development, production, maintenance or decommissioning of military equipment or sensitive equipment;

(d) logistics services relating to military equipment or sensitive equipment;

(e) goods, services or works for wholly military purposes;

(f) sensitive services or sensitive works;

(g) goods, services or works that are otherwise relevant to the operational capability, effectiveness, readiness for action, safety or security of the armed forces.

(2) In this Act, a reference to a defence and security contract includes a reference to a framework for the future award of contracts for the supply of goods, services or works of a kind described in subsection (1)(a) to (g).

(3) A contract that is a defence and security contract only by virtue of subsection (1)(g) is not to be treated as a defence and security contract for the purposes of Schedule 1 (thresholds for application of this Act).

(4) In this Act, “ defence authority contract ” means a defence and security contract awarded by a defence authority.

(5) A “defence authority” is a contracting authority specified in regulations made by a Minister of the Crown.

(6) A Minister of the Crown may only specify a contracting authority for the purposes of subsection (5) if the Minister considers that the authority exercises its functions wholly or mainly for the purposes of defence or national security.

(7) In this section—

“ classified information ” means information or other material which—

in the interests of national security, requires protection from unauthorised access, distribution, or destruction, or from other compromise, and

on the basis of those interests, has that protection under the law of any part of the United Kingdom;

“ decommissioning ”, in relation to equipment, includes—

withdrawal of equipment from use;

disposal or destruction of equipment;

“ development ”, in relation to equipment, includes—

research allowing for the development of equipment, and

development of industrial processes allowing for the production of equipment;

“ equipment ” includes any part, component or subassembly of equipment;

“ maintenance ”, in relation to equipment, includes—

repair of equipment;

modernisation of equipment;

modifications to equipment;

installing equipment, including after its transport to a new location;

testing equipment;

“ military equipment ” means equipment specifically designed or adapted for military purposes, including—

arms, munitions or war material, and

any of the military goods, software and technology the export or transfer of which is controlled by virtue of Schedule 2 to the Export Control Order 2008 ( S.I. 2008/3231 ), as amended from time to time;

“ sensitive equipment ” means equipment for use for security purposes where—

the use or supply of the equipment may involve dealing with classified information,

the supply of the equipment requires access to a physical site or to other equipment as a result of which classified information is likely to be accessible to the supplier, or

the equipment contains classified information;

“ sensitive services ” means services performed for security purposes where performing the services—

involves dealing with classified information, or

requires access to a physical site or to equipment as a result of which sensitive equipment or classified information is likely to be accessible to the supplier,

and includes the training of personnel to use sensitive equipment;

“ sensitive works ” means works undertaken for security purposes, where undertaking the works—

involves dealing with classified information, or

requires access to a physical site or to equipment as a result of which sensitive equipment or classified information is likely to be accessible to the supplier;

“ supply ”, in relation to equipment, other goods, services or works, includes the development of the equipment, other goods, services or works for the purposes of their supply to the contracting authority;

“wholly military purposes” include—

the transportation of military personnel or military equipment;

the training of military personnel;

the training of other personnel to use military equipment;

the construction of military facilities, including military airfields, military storage facilities or facilities for the maintenance of military equipment.

Section 8 Concession contracts

(1) In this Act, “ concession contract ” means a contract for the supply, for pecuniary interest, of works or services to a contracting authority where—

(a) at least part of the consideration for that supply is a right for the supplier to exploit the works or services, and

(b) under the contract the supplier is exposed to a real operating risk.

(2) An “operating risk” is a risk that the supplier will not be able to recover its costs in connection with the supply and operation of the works or services, where the factors giving rise to that risk—

(a) are reasonably foreseeable at the time of award, and

(b) arise from matters outside the control of the contracting authority and the supplier.

Section 9 Light touch contracts

(1) In this Act, “ light touch contract ” means a contract wholly or mainly for the supply of services of a kind specified in regulations under subsection (2).

(2) An appropriate authority may by regulations specify services for the purposes of the definition in subsection (1).

(3) But an appropriate authority may specify services only if, having had regard to the nature of those services, the authority considers that it is appropriate for the award of public contracts for their supply to be exempted from the provisions of this Act that do not apply to light touch contracts.

(4) In having regard to the nature of services for that purpose, the appropriate authority must, in particular, consider the extent to which—

(a) suppliers from outside the United Kingdom are likely to want to compete for contracts for the supply of the services;

(b) the services are supplied for the benefit of individuals (for example, health or social care services) or the community generally;

(c) proximity between the supplier and the recipient of the services is necessary or expedient for the effective and efficient supply of the services.

(5) In this Act, a reference to a light touch contract includes a reference to a framework for the future award of contracts wholly or mainly for the supply of services of a kind specified in regulations under subsection (2).

Section 10 Mixed procurement: special regime contracts

(1) Subsection (3) applies if, on award of a special regime contract other than a framework, a contracting authority considers that—

(a) certain of the goods, services or works to be supplied under the contract could reasonably be supplied under a separate contract, and

(b) that contract—

(i) would not be a special regime contract of the same kind (or at all), and

(ii) would have an estimated value of not less than the threshold amount for the type of contract.

(2) Subsection (3) applies if, on award of a special regime contract that is a framework, a contracting authority considers that—

(a) certain of the goods, services or works to be supplied under contracts awarded in accordance with the framework could reasonably be supplied under a contract not awarded in accordance with the framework, and

(b) that contract—

(i) would not be a special regime contract of the same kind (or at all), and

(ii) would have an estimated value of not less than the threshold amount for the type of contract.

(3) The contract is not to be treated as a special regime contract for the purposes of this Act.

(4) Subsection (3) does not apply to prevent the contract from being treated as a defence and security contract if the contracting authority has good reasons for not awarding separate contracts.

(5) In considering whether goods, services or works could reasonably be supplied under a separate contract, a contracting authority may, for example, have regard to the practical and financial consequences of awarding more than one contract.

(6) A “ special regime contract ” means—

(a) a concession contract,

(b) a defence and security contract,

(c) a light touch contract, or

(d) a utilities contract,

and a reference to a special regime contract of a particular kind is a reference to a special regime contract of a kind described in paragraph (a), (b), (c) or (d).

(7) This section does not apply for the purpose of determining whether a contract is a public contract.

(8) This section does not apply to a contract awarded in accordance with a framework.

Section 11 Covered procurement only in accordance with this Act

(1) A contracting authority may not carry out a covered procurement except in accordance with this Act.

(2) Accordingly, a contracting authority may not enter into a public contract unless it is awarded in accordance with—

(a) section 19 (competitive award);

(b) section 41 (direct award in special cases);

(c) section 43 (direct award after switching procedures);

(d) section 45 (award under frameworks).

Section 12 Covered procurement: objectives

(1) In carrying out a covered procurement, a contracting authority must have regard to the importance of—

(a) delivering value for money;

(b) maximising public benefit;

(c) sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions;

(d) acting, and being seen to act, with integrity.

(2) In carrying out a covered procurement, a contracting authority must treat suppliers the same unless a difference between the suppliers justifies different treatment.

(3) If a contracting authority considers that different treatment is justified in a particular case, the authority must take all reasonable steps to ensure it does not put a supplier at an unfair advantage or disadvantage.

(4) In carrying out a covered procurement, a contracting authority must—

(a) have regard to the fact that small and medium-sized enterprises may face particular barriers to participation, and

(b) consider whether such barriers can be removed or reduced.

Section 13 The national procurement policy statement

(1) A Minister of the Crown may publish a statement setting out the Government’s strategic priorities in relation to procurement.

(2) In this section, “ the national procurement policy statement ” means the statement for the time being published under this section.

(3) Before publishing the national procurement policy statement, a Minister of the Crown must—

(a) carry out such consultation as the Minister considers appropriate,

(b) make any changes to the statement that appear to the Minister to be necessary in view of responses to the consultation, and

(c) lay the statement before Parliament.

(4) A Minister of the Crown must withdraw the national procurement policy statement if, before the end of the 40-day period, either House of Parliament resolves not to approve it.

(5) “The 40-day period” is the period of 40 days beginning with the day on which the statement is laid before Parliament (or, if it is not laid before each House of Parliament on the same day, the later of the days on which it is laid).

(6) When calculating the 40-day period, ignore any period during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.

(7) A Minister of the Crown must keep the national procurement policy statement under review.

(8) The national procurement policy statement may be amended or replaced by a subsequent statement, and this section applies in relation to any amended or replacement statement as it applies in relation to the original statement.

(9) A contracting authority must have regard to the national procurement policy statement.

(10) Subsection (9) does not apply—

(a) to private utilities;

(b) in relation to the award of a contract—

(i) in accordance with a framework, or

(ii) by reference to suppliers’ membership of a dynamic market;

(c) in relation to procurement under a devolved Welsh procurement arrangement or transferred Northern Ireland procurement arrangement;

(d) to a devolved Welsh authority or transferred Northern Ireland authority, except in relation to procurement under a reserved procurement arrangement (but not an arrangement of a kind mentioned in paragraph (b)).

Section 14 The Wales procurement policy statement

(1) The Welsh Ministers may publish a statement setting out the Welsh Government’s strategic priorities in relation to procurement.

(2) In this section, “ the Wales procurement policy statement ” means the statement for the time being published under this section.

(3) Before publishing the Wales procurement policy statement, the Welsh Ministers must—

(a) carry out such consultation as the Welsh Ministers consider appropriate,

(b) make any changes to the statement that appear to the Welsh Ministers to be necessary in view of responses to the consultation, and

(c) lay the statement before the Senedd.

(4) The Welsh Ministers must withdraw the Wales procurement policy statement if, before the end of the period of 40 days beginning with the day on which the statement is laid before the Senedd, the Senedd resolves that the statement be annulled.

(5) When calculating the period of 40 days for the purposes of subsection (4), ignore any period during which the Senedd is dissolved or in recess for more than four days.

(6) The Welsh Ministers must keep the Wales procurement policy statement under review.

(7) The Wales procurement policy statement may be amended or replaced by a subsequent statement, and this section applies in relation to any amended or replacement statement as it applies in relation to the original statement.

(8) The following contracting authorities must have regard to the Wales procurement policy statement—

(a) a devolved Welsh authority, except in relation to procurement under a reserved procurement arrangement or transferred Northern Ireland procurement arrangement;

(b) a contracting authority other than a devolved Welsh authority in relation to procurement under a devolved Welsh procurement arrangement.

(9) But subsection (8) does not apply—

(a) to private utilities;

(b) in relation to the award of a contract—

(i) in accordance with a framework, or

(ii) by reference to suppliers’ membership of a dynamic market.

(10) In this section “ the Senedd ” means Senedd Cymru.

Section 15 Planned procurement notices

(1) Before publishing a tender notice, a contracting authority may publish a planned procurement notice.

(2) A “ planned procurement notice ” means a notice setting out—

(a) that the contracting authority intends to publish a tender notice, and

(b) any other information specified in regulations under section 95.

(3) A “ qualifying planned procurement notice ” means a planned procurement notice published at least 40 days but not more than 12 months before the day on which the tender notice is published.

(4) See section 54(4) for provision for reduced tendering periods in cases where a qualifying planned procurement notice has been published.

Section 16 Preliminary market engagement

(1) Before publishing a tender notice in respect of a public contract, a contracting authority may engage with suppliers and other persons for the purpose of—

(a) developing the authority’s requirements and approach to the procurement;

(b) designing a procedure, conditions of participation or award criteria;

(c) preparing the tender notice and associated tender documents;

(d) identifying suppliers that may be able to supply the goods, services or works required;

(e) identifying likely contractual terms;

(f) building capacity among suppliers in relation to the contract being awarded.

(2) Engagement under subsection (1) is called “preliminary market engagement”.

(3) In carrying out preliminary market engagement, a contracting authority must take steps to ensure that—

(a) suppliers participating in the preliminary market engagement are not put at an unfair advantage, and

(b) competition in relation to the award of the public contract is not otherwise distorted.

(4) Subsection (5) applies if a contracting authority considers that—

(a) a supplier’s participation in preliminary market engagement has put the supplier at an unfair advantage in relation to the award of a public contract, and

(b) the advantage cannot be avoided.

(5) The contracting authority must in relation to the award—

(a) treat the supplier as an excluded supplier for the purpose of—

(i) assessing tenders under section 19 (competitive award), or

(ii) awarding a contract under section 41 or 43 (direct award), and

(b) exclude the supplier from participating in, or progressing as part of, any competitive tendering procedure.

Section 17 Preliminary market engagement notices

(1) If a contracting authority carries out preliminary market engagement, the authority must—

(a) publish a preliminary market engagement notice before publishing a tender notice, or

(b) provide reasons for not doing so in the tender notice.

(2) A “ preliminary market engagement notice ” means a notice setting out—

(a) that the contracting authority intends to conduct, or has conducted, preliminary market engagement, and

(b) any other information specified in regulations under section 95.

(3) This section does not apply to a private utility, ...

Section 18 Duty to consider lots

(1) Before publishing a tender notice in respect of a public contract, a contracting authority must consider—

(a) whether the goods, services or works to be supplied under the contract could reasonably be supplied under more than one contract, and

(b) whether such contracts could appropriately be awarded by reference to lots.

(2) If the contracting authority considers that the goods, services or works could reasonably be supplied under more than one contract and such contracts could appropriately be awarded by reference to lots, the authority must—

(a) arrange for the award of the contract or contracts by reference to lots, or

(b) provide reasons for not doing so.

Section 19 Award of public contracts following a competitive tendering procedure

(1) A contracting authority may award a public contract to the supplier that submits the most advantageous tender in a competitive tendering procedure.

(2) The “most advantageous tender” is the tender that the contracting authority considers—

(a) satisfies the contracting authority’s requirements, and

(b) best satisfies the award criteria when assessed by reference to—

(i) the assessment methodology under section 23(3)(a), and

(ii) if there is more than one criterion, the relative importance of the criteria under section 23(3)(b).

(3) In assessing tenders for the purposes of this section a contracting authority—

(a) must disregard any tender from a supplier that does not satisfy the conditions of participation;

(b) may disregard any tender from a supplier that—

(i) is not a United Kingdom supplier or treaty state supplier, or

(ii) intends to sub-contract the performance of all or part of the contract to a supplier that is not a United Kingdom supplier or treaty state supplier;

(c) may disregard any tender that offers a price that the contracting authority considers to be abnormally low for performance of the contract;

(d) may disregard any tender which breaches a procedural requirement set out in the tender notice or associated tender documents.

(4) Before disregarding a tender under subsection (3)(c) (abnormally low price), a contracting authority must—

(a) notify the supplier that the authority considers the price to be abnormally low, and

(b) give the supplier reasonable opportunity to demonstrate that it will be able to perform the contract for the price offered.

(5) If the supplier demonstrates to the contracting authority’s satisfaction that it will be able to perform the contract for the price offered, the authority may not disregard the tender under subsection (3)(c) (abnormally low price).

(6) The reference to a tender breaching a procedural requirement includes a reference to a supplier breaching a procedural requirement in relation to the tender.

(7) In this Act, a reference to a contracting authority’s requirements is a reference to requirements described in the tender notice or associated tender documents (see section 21(5) and (6)).

(8) See sections 26 and 28 for provision about disregarding tenders from suppliers that are excluded or excludable suppliers or that are sub-contracting to excluded or excludable suppliers.

(9) See sections 32 and 33 for provision about reserving public contracts to supported employment providers and qualifying public service mutuals.

(10) See section 34 for provision about disregarding tenders from suppliers that are not members of a dynamic market.

(11) In this section “ procedural requirement ” includes a requirement that a supplier provide information.

Section 20 Competitive tendering procedures

(1) Before awarding a public contract under section 19, a contracting authority must carry out a competitive tendering procedure in accordance with a tender notice and any associated tender documents.

(2) A “competitive tendering procedure” is—

(a) a single-stage tendering procedure without a restriction on who can submit tenders (an “open procedure”), or

(b) such other competitive tendering procedure as the contracting authority considers appropriate for the purpose of awarding the public contract (a “competitive flexible procedure”).

(3) A contracting authority must ensure that the procedure is a proportionate means of awarding the public contract, having regard to the nature, complexity and cost of the contract.

(4) A competitive flexible procedure—

(a) may limit the number of participating suppliers, generally or in respect of particular tendering rounds or other selection processes;

(b) may provide for the refinement of award criteria in accordance with section 24;

(c) may not permit the participation of suppliers that did not submit a tender in the first round of tendering or that were excluded following an earlier round.

(5) A competitive flexible procedure may provide for the exclusion of suppliers—

(a) by reference to conditions of participation (see section 22);

(b) by reference to an intermediate assessment of tenders;

(c) that are not United Kingdom suppliers or treaty state suppliers;

(d) that intend to sub-contract the performance of all or part of the contract to a supplier that is not a United Kingdom supplier or treaty state supplier.

(6) The reference in subsection (5)(b) to an intermediate assessment of tenders is a reference to an assessment of which tenders—

(a) satisfy the contracting authority’s requirements, and

(b) best satisfy the award criteria at the point of exclusion, when assessed by reference to—

(i) the assessment methodology under section 23(3)(a), and

(ii) if there is more than one criterion, the relative importance of the criteria under section 23(3)(b),

in each case, at the point of assessment.

(7) A competitive tendering procedure may, if a contract is being awarded by reference to lots, limit the number of lots in respect of which any one supplier can submit a tender.

(8) See sections 27, 28 and 30 for provision about excluding suppliers that are excluded or excludable suppliers, that are sub-contracting to excluded or excludable suppliers or for improper behaviour.

(9) See sections 32 and 33 for provision about reserving public contracts to sheltered employment providers and qualifying mutual societies.

(10) See section 34 for provision about excluding suppliers that are not members of a dynamic market.

Section 21 Tender notices and associated tender documents

(1) A contracting authority must publish a tender notice for the purpose of—

(a) inviting suppliers to submit a tender as part of an open procedure, or

(b) in the case of a competitive flexible procedure—

(i) inviting suppliers to submit a request to participate in the procedure, or

(ii) where no such invitation is made, inviting suppliers to submit their first, or only, tender as part of the procedure.

(2) A “ tender notice ” means a notice setting out—

(a) that a contracting authority intends to award a public contract under section 19, and

(b) any other information specified in regulations under section 95.

(3) A contracting authority must provide any associated tender documents in accordance with the tender notice.

(4) “ Associated tender document ” means, in relation to a tender notice, a document setting out information specified in regulations under section 95 that supplements that set out in the tender notice.

(5) A contracting authority may not invite suppliers to submit a tender as part of a competitive tendering procedure unless it is satisfied that the tender notice or associated tender documents contain—

(a) information sufficient to allow suppliers to prepare such a tender, and

(b) in particular, details of the goods, services or works required by the contracting authority.

(6) In detailing its requirements, a contracting authority must be satisfied that they—

(a) are sufficiently clear and specific, and

(b) do not break the rules on technical specifications in section 56.

(7) See section 40 for an exception to the duty in subsection (1) for contracts awarded by reference to suppliers’ membership of certain utilities dynamic markets.

Section 22 Conditions of participation

(1) A contracting authority may set conditions of participation in relation to the award of a public contract under section 19 only if it is satisfied that the conditions are a proportionate means of ensuring that suppliers have—

(a) the legal and financial capacity to perform the contract, or

(b) the technical ability to perform the contract.

(2) A “condition of participation” is a condition that a supplier must satisfy if the supplier is to be awarded the public contract.

(3) A condition set under subsection (1)(a) may not—

(a) require the submission of audited annual accounts, except from suppliers who are, or were, required to have the accounts audited in accordance with Part 16 of the Companies Act 2006 or an overseas equivalent;

(b) require insurance relating to the performance of the contract to be in place before the award of the contract.

(4) A condition set under subsection (1)(b) may relate to suppliers’ qualifications, experience or technical ability, but may not—

(a) require suppliers to have been awarded a contract by a particular contracting authority,

(b) break the rules on technical specifications in section 56, or

(c) require particular qualifications without allowing for their equivalents.

(5) When considering whether a condition is proportionate for the purposes of subsection (1), a contracting authority must have regard to the nature, complexity and cost of the public contract.

(6) A condition of participation may require the provision of evidence that is verifiable by a person other than the supplier.

(7) If a supplier does not satisfy a condition of participation, the contracting authority may exclude the supplier from participating in, or progressing as part of, the competitive tendering procedure.

(8) A supplier is to be treated as satisfying a condition of participation to the extent that a supplier associated with the supplier satisfies the condition.

(9) For the purposes of this section, a supplier is associated with another supplier if—

(a) the suppliers are submitting a tender together, or

(b) the contracting authority is satisfied that the suppliers will enter into legally binding arrangements to the effect that—

(i) the supplier will sub-contract the performance of all or part of the contract to the other, or

(ii) the other supplier will guarantee the performance of all or part of the contract by the supplier.

Section 23 Award criteria

(1) In this Act, “ award criteria ” means criteria set in accordance with this section against which tenders may be assessed for the purpose of awarding a public contract under section 19 (award following competitive tendering procedure).

(2) In setting award criteria, a contracting authority must be satisfied that they—

(a) relate to the subject-matter of the contract,

(b) are sufficiently clear, measurable and specific,

(c) do not break the rules on technical specifications in section 56, and

(d) are a proportionate means of assessing tenders, having regard to the nature, complexity and cost of the contract.

(3) In setting award criteria, a contracting authority must—

(a) describe how tenders are to be assessed by reference to them and, in particular, specify whether failure to meet one or more criteria would disqualify a tender (the “assessment methodology”), and

(b) if there is more than one criterion, indicate their relative importance by—

(i) weighting each as representing a percentage of total importance,

(ii) ranking them in order of importance, or

(iii) describing it in another way.

(4) In setting award criteria for the assessment of tenders by reference to lots, a contracting authority—

(a) may limit the number of lots that may be awarded to any one supplier, and

(b) in doing so, must provide an objective mechanism for supplier selection in circumstances where a supplier would otherwise exceed the limit.

(5) In subsection (2), the reference to the subject-matter of a contract includes a reference to—

(a) the goods, services or works to be supplied under the contract, including in respect of any aspect of their production, trading or other stage in their life-cycle;

(b) how or when those goods, services or works are to be supplied;

(c) the qualifications, experience, ability, management or organisation of staff where those factors are likely to make a material difference to the quality of goods, services or works being supplied;

(d) price, other costs or value for money in all the circumstances.

(6) In the case of a light touch contract, the reference to the subject-matter of the contract also includes a reference to—

(a) the views of an individual for whose benefit the services are to be supplied (a “service recipient”), or of a person providing care to a service recipient, in relation to—

(i) who should supply the services, and

(ii) how and when they should be supplied;

(b) the different needs of different service recipients;

(c) the importance of proximity between the supplier and service recipients for the effective and efficient supply of the services.

Section 24 Refining award criteria

(1) A contracting authority may refine an award criterion as part of a competitive flexible procedure if—

(a) the tender notice or associated tender documents provide for the refinement of the criterion, and

(b) the authority is yet to invite suppliers to submit tenders to be assessed under section 19 (award following competitive tendering procedure).

(2) A contracting authority may, in consequence of refining an award criterion under subsection (1), refine the indication of the relative importance of the award criteria under section 23(3)(b).

(3) A contracting authority may not make a refinement under this section if it would result in award criteria that would, had the refinement been made earlier, have allowed one or more suppliers that did not progress beyond an earlier round or selection process to have done so.

(4) A contracting authority must modify and republish or provide again the tender notice and any associated tender documents affected by refinements under this section.

Section 25 Sub-contracting specifications

(1) Subsection (2) applies if a contracting authority considers that the authority could award a contract for the supply of certain goods, services or works to a particular supplier under section 41 (direct award in special cases).

(2) In awarding a contract that is wholly or partly for the supply of those goods, services or works under section 19 (award following competitive tendering procedure), the contracting authority may require that a supplier sub-contracts the supply of those goods, services or works to the particular supplier.

Section 26 Excluding suppliers from a competitive award

(1) In assessing tenders under section 19, a contracting authority must disregard any tender from a supplier that is an excluded supplier.

(2) Before assessing which tender best satisfies the award criteria for the purposes of section 19, a contracting authority—

(a) must consider whether a supplier is an excludable supplier, and

(b) may disregard any tender from an excludable supplier.

(3) If the supplier is an excluded or excludable supplier only by virtue of an associated person being an excluded or excludable supplier, the contracting authority must, before disregarding a tender—

(a) notify the supplier of its intention to disregard, and

(b) give the supplier reasonable opportunity to replace the associated person.

(4) In this Act, “ associated person ” means a person that the supplier is relying on in order to satisfy the conditions of participation (see section 22(8)), but not a person who is to act as guarantor as described in section 22(9).

Section 27 Excluding suppliers from a competitive flexible procedure

(1) Before permitting a supplier to participate in a competitive flexible procedure, a contracting authority must determine whether the supplier is—

(a) an excluded supplier, or

(b) an excludable supplier.

(2) The contracting authority must exclude an excluded supplier from participating in, or progressing as part of, the competitive flexible procedure.

(3) The contracting authority may exclude an excludable supplier from participating in, or progressing as part of, the competitive flexible procedure.

(4) Before excluding a supplier that is an excluded supplier or excludable supplier only by virtue of an associated person, a contracting authority must—

(a) notify the supplier of its intention, and

(b) provide the supplier with reasonable opportunity to replace the associated person.

(5) In this section, a reference to a supplier participating in a competitive flexible procedure is a reference to a supplier participating beyond the initial submission of tenders or requests to participate.

Section 28 Excluding suppliers by reference to sub-contractors

(1) A contracting authority must as part of a competitive tendering procedure—

(a) request information about whether a supplier intends to sub-contract the performance of all or part of the public contract, and

(b) seek to determine whether any intended sub-contractor is on the debarment list.

(2) A contracting authority may, as part of a competitive tendering procedure, request information for the purpose of determining whether any intended sub-contractor is an excluded or excludable supplier.

(3) If, after requesting information under subsection (1) or (2), a contracting authority considers that a supplier intends to sub-contract to a supplier that is an excluded supplier, the contracting authority must—

(a) treat the supplier as an excluded supplier for the purpose of assessing tenders under section 19, and

(b) exclude the supplier from participating in, or progressing as part of, the competitive tendering procedure.

(4) If, after requesting information under subsection (1) or (2), a contracting authority considers that a supplier intends to sub-contract to a supplier that is an excludable supplier, the contracting authority—

(a) must treat the supplier as an excludable supplier for the purpose of assessing tenders under section 19, and

(b) may exclude the supplier from participating in, or progressing as part of, the competitive tendering procedure.

(5) Before disregarding a tender or excluding a supplier under subsection (3) or (4), a contracting authority must—

(a) notify the supplier of its intention, and

(b) give the supplier reasonable opportunity to find an alternative supplier with which to sub-contract.

(6) In this section, a reference to a supplier participating in a competitive tendering procedure is a reference to a supplier participating beyond the initial submission of tenders or requests to participate.

(7) Subsections (3) and (4) do not apply if the intended sub-contractor is an associated person.

Section 29 Excluding a supplier that is a threat to national security

(1) This section applies if a relevant contracting authority intends to disregard a tender under section 26 or 28 or exclude a supplier under section 27 or 28 on the basis of the discretionary exclusion ground in paragraph 14 of Schedule 7 (threat to national security).

(2) The contracting authority may not disregard the tender, exclude the supplier or notify the supplier of its intention unless—

(a) the authority has notified a Minister of the Crown of its intention, and

(b) the Minister of the Crown considers that—

(i) the supplier or an intended sub-contractor is an excludable supplier by reference to paragraph 14 of Schedule 7, and

(ii) the tender should be disregarded or supplier excluded.

(3) The reference in subsection (2) to a contracting authority notifying a supplier of its intention is a reference to notification in accordance with section 26(3), 27(4) or 28(5).

(4) In this section, a “ relevant contracting authority ” means a contracting authority other than—

(a) a Minister of the Crown or a government department,

(b) the Corporate Officer of the House of Commons, or

(c) the Corporate Officer of the House of Lords.

Section 30 Excluding suppliers for improper behaviour

(1) Subsection (2) applies if a contracting authority determines that—

(a) a supplier has acted improperly in relation to the award of a public contract,

(b) in consequence, the supplier is put at an unfair advantage in relation to the award, and

(c) the unfair advantage cannot be avoided other than by excluding the supplier.

(2) The contracting authority must in relation to the award—

(a) treat the supplier as an excluded supplier for the purpose of assessing tenders under section 19, and

(b) exclude the supplier from participating in, or progressing as part of, any competitive tendering procedure.

(3) Before making a determination of the kind described in subsection (1), a contracting authority must give the supplier reasonable opportunity to—

(a) make representations, and

(b) provide relevant evidence.

(4) In subsection (1), the reference to a supplier acting improperly is reference to a supplier—

(a) failing to provide information requested by the contracting authority,

(b) providing information that is incomplete, inaccurate or misleading,

(c) accessing confidential information, or

(d) unduly influencing the contracting authority’s decision-making.

(5) Subsection (6) applies if—

(a) a contracting authority has, in relation to the award of a public contract, requested—

(i) information about a supplier’s connected persons or associated persons for the purpose of determining whether the supplier is an excluded or excludable supplier, or

(ii) other information under section 28(2) (excluding suppliers by reference to sub-contractors), and

(b) the supplier has—

(i) failed to provide the information requested, or

(ii) provided information that is incomplete, inaccurate or misleading.

(6) The contracting authority must in relation to the award—

(a) treat the supplier as an excluded supplier for the purpose of assessing tenders under section 19, and

(b) exclude the supplier from participating in, or progressing as part of, any competitive tendering procedure.

Section 31 Modifying a section 19 procurement

(1) A contracting authority may modify the terms of a covered procurement before the following deadlines have passed—

(a) in the case of an open procedure, the deadline for submitting tenders;

(b) in the case of a competitive flexible procedure—

(i) the deadline for submitting a request to participate in the procedure, or

(ii) where there has been no invitation to submit such requests, the deadline for submitting a first or only tender.

(2) In the case of a competitive flexible procedure, a contracting authority may also modify the terms of a covered procurement before the deadline for submitting a tender for assessment under section 19 (award following competitive tendering procedure) has passed if—

(a) the modification is not substantial, or

(b) the procurement relates to the award of a light touch contract.

(3) A modification is “substantial” if—

(a) it would permit suppliers that are not participating suppliers to submit a tender, or

(b) the contracting authority considers that, had the modification been reflected in the tender notice or associated tender documents before a deadline referred to in subsection (1)(b) passed—

(i) one or more participating suppliers would not be a participating supplier, or

(ii) one or more suppliers that are not participating suppliers would be a participating supplier.

(4) Whenever a contracting authority modifies the terms of a covered procurement, the authority must consider revising applicable tender deadlines and other time limits in accordance with section 54 (time limits).

(5) If a contracting authority modifies the terms of a covered procurement under subsection (1), the authority must revise and republish or provide again the tender notice and any associated tender documents affected by the modifications or time limit revisions.

(6) If a contracting authority modifies the terms of a covered procurement under subsection (2), the authority must notify each participating supplier.

(7) In this section—

“ terms of a covered procurement ” means anything set out in a tender notice or associated tender documents, including any requirements of a competitive tendering procedure, conditions of participation or award criteria;

“ participating supplier ” means a supplier that—

has submitted a request to participate in, or a tender as part of, the competitive tendering procedure, and

has not been excluded in accordance with the procedure or under this Act.

(8) See section 43 for provision about switching to direct award.

Section 32 Reserving contracts to supported employment providers

(1) A competitive flexible procedure may provide for suppliers that are not supported employment providers to be excluded from participating in, or progressing as part of, the procedure.

(2) Subsection (3) applies in relation to the award of a public contract under section 19 if the competitive flexible procedure provides for suppliers to be excluded as set out in subsection (1).

(3) In assessing tenders under section 19, a contracting authority must disregard any tender from a supplier that is not a supported employment provider.

(4) A “ supported employment provider ” means an organisation that operates wholly or partly for the purpose of providing employment, or employment-related support, to disabled or disadvantaged individuals where—

(a) disabled or disadvantaged individuals represent at least 30 per cent of the workforce of the organisation,

(b) if a particular part of the organisation is to perform the contract, disabled or disadvantaged individuals represent at least 30 per cent of the workforce of that part of the organisation, or

(c) if more than one organisation is to perform the contract, disabled or disadvantaged individuals represent at least 30 per cent of the combined workforce of—

(i) those organisations,

(ii) where a particular part of each organisation is to perform the contract, those parts, or

(iii) where a combination of organisations and parts is to perform the contract, those organisations and parts.

Section 33 Reserving contracts to public service mutuals

(1) This section applies in relation to the award of a public contract under section 19 if the contract—

(a) is for reservable light touch services, and

(b) has a maximum term of five years or less.

(2) A competitive flexible procedure may provide for suppliers that are not qualifying public service mutuals to be excluded from participating in, or progressing as part of, the procedure.

(3) Subsection (4) applies in relation to the award of a public contract under section 19 if the competitive flexible procedure provides for suppliers to be excluded as set out in subsection (2).

(4) In assessing tenders under section 19, a contracting authority must disregard any tender from a supplier that is not a qualifying public service mutual.

(5) A “ qualifying public service mutual ” means a public service mutual that has not entered into a comparable contract during the period of three years ending with the day on which the contract referred to in subsection (1) is awarded.

(6) A “ public service mutual ” means a body that—

(a) operates for the purpose of delivering public services and mainly for the purpose of delivering one or more reservable light touch services,

(b) is run on a not-for-profit basis or provides for the distribution of profits only to members, and

(c) is under the management and control of its employees.

(7) In this section—

“ comparable contract ” means a contract that was—

a contract for the same kind of services,

awarded by the same contracting authority, and

awarded in reliance on this section;

“ reservable light touch services ” means services of a kind specified in regulations under subsection (8).

(8) An appropriate authority may by regulations specify services of a kind specified in regulations of the authority under section 9 (light touch contracts).

Section 34 Competitive award by reference to dynamic markets

(1) A competitive flexible procedure may provide for the following suppliers to be excluded from participating in, or progressing as part of, the procedure—

(a) suppliers that are not members of an appropriate dynamic market, or

(b) suppliers that are not members of an appropriate part of an appropriate dynamic market.

(2) Subsection (3) applies in relation to the award of a public contract under section 19 if the competitive flexible procedure provides for suppliers to be excluded as set out in subsection (1).

(3) In assessing tenders under section 19, a contracting authority must disregard any tender from a supplier that is not a member of—

(a) the appropriate dynamic market, or

(b) the appropriate part of the appropriate dynamic market.

(4) A contracting authority must, before excluding suppliers or disregarding tenders under this section, consider any applications for membership of the market or part of the market from suppliers that have submitted a request to participate in the competitive flexible procedure, or submitted a tender as part of the competitive flexible procedure.

(5) Subsection (4) does not apply in relation to an application for membership if, due to exceptional circumstances arising from the complexity of the particular procurement, a contracting authority is unable to consider the application before—

(a) the deadline for submitting a request to participate in the procedure, or

(b) where there has been no invitation to submit such requests, the deadline for submitting a first or only tender.

(6) A dynamic market or part of a dynamic market is “ appropriate ” for the purposes of this section if its terms permit the award of the contract by the contracting authority.

(7) This section does not apply in relation to the award of a concession contract, unless the concession contract is also a utilities contract.

(8) In this Act—

“ dynamic market ” means arrangements established under section 35(1);

references to a contract being awarded by reference to suppliers’ membership of a dynamic market are references to a contract being awarded in reliance on this section;

references to suppliers’ membership of a dynamic market are references to suppliers’ participation in arrangements established under section 35(1).

Section 35 Dynamic markets: establishment

(1) A contracting authority may establish arrangements for the purpose of a contracting authority awarding public contracts by reference to suppliers’ participation in the arrangements.

(2) In this Act a “ utilities dynamic market ” means a dynamic market established only for the purpose of the award of utilities contracts by utilities.

(3) If arrangements established by any person comply with the requirements of this Act that apply in relation to a utilities dynamic market established by a private utility—

(a) the arrangements are to be treated for the purposes of this Act as a utilities dynamic market established by a private utility, and

(b) a utility may award public contracts that are utilities contracts by reference to suppliers’ membership of the market.

(4) In this Act, “ utility ” means—

(a) a public authority, or public undertaking, that carries out a utility activity;

(b) a private utility.

(5) Documents establishing or modifying a dynamic market are not a contract for the purposes of this Act.

Section 36 Dynamic markets: membership

(1) A contracting authority may set conditions for membership of a dynamic market or part of a dynamic market only if it is satisfied that the conditions are a proportionate means of ensuring that members—

(a) have the legal and financial capacity to perform contracts awarded by reference to membership of the market or the part of the market;

(b) have the technical ability to perform such contracts.

(2) A condition set under subsection (1)(a) may not—

(a) require the submission of audited annual accounts, except from suppliers who are, or were, required to have the accounts audited in accordance with Part 16 of the Companies Act 2006 or an overseas equivalent;

(b) require insurance relating to the performance of the contract to be in place before the award of the contract.

(3) A condition set under subsection (1)(b) may relate to suppliers’ qualifications, experience or technical ability, but may not—

(a) require suppliers to have been awarded a contract by a particular contracting authority,

(b) break the rules on technical specifications in section 56, or

(c) require particular qualifications without allowing for their equivalents.

(4) When considering whether a condition is proportionate for the purposes of subsection (1) a contracting authority must have regard to the nature, complexity and cost of contracts to be awarded by reference to suppliers’ membership of the market.

(5) A condition for membership may require the provision of evidence that is verifiable by a person other than the supplier.

(6) A contracting authority must—

(a) accept applications for membership of a dynamic market or part of a dynamic market at any time during the term of the market;

(b) consider such applications within a reasonable period;

(c) admit to the market or the part of the market, as soon as reasonably practicable, any supplier that—

(i) is not an excluded or excludable supplier, and

(ii) satisfies the conditions for membership;

(d) consider whether to admit to the market or the part of the market any supplier that—

(i) is an excludable supplier, and

(ii) satisfies the conditions for membership;

(e) inform a supplier of the outcome of their application, together with reasons for the decision, as soon as reasonably practicable.

(7) A contracting authority may not—

(a) limit the number of suppliers that can be admitted to a dynamic market or part of a market, or

(b) modify the conditions for membership of a dynamic market or part of a market during the term of the market.

Section 37 Dynamic markets: removing members from the market

(1) A contracting authority must remove a supplier from a dynamic market if the authority considers that the supplier is an excluded supplier under section 57(1)(b) (debarment by reference to mandatory exclusion ground).

(2) A contracting authority may remove a supplier from a dynamic market if—

(a) the authority considers that the supplier—

(i) is an excluded supplier under section 57(1)(a),

(ii) does not satisfy the conditions for membership, or

(iii) has, since becoming a member, become an excludable supplier, or

(b) the authority discovers that, on becoming a member, the supplier was an excludable supplier.

(3) The reference to a supplier becoming an excludable supplier includes a reference to a supplier becoming an excludable supplier by virtue of a discretionary exclusion ground that—

(a) did not apply before the supplier became a member, or

(b) applied before the supplier became a member by reference to different circumstances.

(4) Before removing a supplier from a dynamic market, a contracting authority must inform the supplier of its decision to do so, together with reasons for the decision.

Section 38 Dynamic markets: fees

(1) Documents establishing a dynamic market other than a utilities dynamic market may provide for the charging of fees to suppliers that are awarded a contract by reference to their membership of the market.

(2) Fees charged by virtue of subsection (1) must be set as a fixed percentage to be applied to the estimated value of the awarded contract.

(3) Documents establishing a utilities dynamic market may provide for the charging of fees to suppliers in connection with obtaining and maintaining membership of the market.

Section 39 Dynamic market notices

(1) A notice under this section is called a “dynamic market notice”.

(2) Before establishing a dynamic market, a contracting authority must publish a notice setting out—

(a) that the authority intends to establish a dynamic market, and

(b) any other information specified in regulations under section 95.

(3) As soon as reasonably practicable after establishing a dynamic market, the contracting authority must publish a notice setting out—

(a) that the dynamic market has been established, and

(b) any other information specified in regulations under section 95.

(4) As soon as reasonably practicable after modifying a dynamic market, the contracting authority must publish a notice setting out—

(a) the modifications made to the market, and

(b) any other information specified in regulations under section 95.

(5) As soon as reasonably practicable after a dynamic market ceases to operate, the contracting authority that established the market must publish a notice setting out—

(a) that the dynamic market has ceased to operate, and

(b) any other information specified in regulations under section 95.

(6) Subsection (5) does not apply to private utilities.

Section 40 Qualifying utilities dynamic market notices: no duty to publish a tender notice

(1) The duty to publish a tender notice in section 21(1) does not apply in relation to the award of a contract by reference to suppliers’ membership of—

(a) a utilities dynamic market established by reference to a qualifying utilities dynamic market notice, or

(b) a part of such a market.

(2) A contracting authority must instead provide a tender notice to members of the market, or part of the market, for the purposes set out in section 21(1).

(3) A contracting authority may also provide a tender notice to suppliers that have applied for membership of the market, or part of the market, but have yet to be accepted or rejected.

(4) The reference in section 21(5) to a tender notice or associated tender documents includes a reference to a qualifying utilities dynamic market notice.

(5) Section 34(4) (duty to consider applications for membership) does not apply in relation to the award of a contract by reference to suppliers’ membership of—

(a) a utilities dynamic market established by reference to a qualifying utilities dynamic market notice, or

(b) a part of such a market.

(6) In this section, “ a qualifying utilities dynamic market notice ” means a dynamic market notice under section 39(2) (dynamic market notices) that—

(a) relates to the establishment of a utilities dynamic market, and

(b) sets out—

(i) that only members of the market will be notified of a future intention to award a contract by reference to suppliers’ membership of the market, and

(ii) any other information specified in regulations under section 95.

(7) In this Act, a reference to publication of a tender notice includes a reference to provision of a tender notice under subsection (2) or (3).

Section 41 Direct award in special cases

(1) If a direct award justification applies, a contracting authority may award a public contract directly—

(a) to a supplier that is not an excluded supplier, or

(b) in accordance with subsection (2).

(2) A contracting authority may award a contract to a supplier that is an excluded supplier if the contracting authority considers that there is an overriding public interest in awarding the contract to that supplier.

(3) A contracting authority may carry out a selection process or take such other preliminary steps as it considers appropriate for the purpose of awarding a contract under this section.

(4) Before awarding a contract to a supplier under this section, a contracting authority must consider whether the supplier is an excludable supplier.

(5) There is an overriding public interest in awarding a public contract to an excluded supplier if—

(a) it is necessary in order to construct, maintain or operate critical national infrastructure,

(b) it is necessary in order to ensure the proper functioning of a sector on which the defence, security or economic stability of the United Kingdom relies,

(c) failure to do so would prejudice the conduct of military or security operations, or the effective operation of the armed forces or intelligence services, or

(d) the contract is being awarded by reference to paragraph 13 of Schedule 5 (extreme and unavoidable urgency) and cannot be awarded to, or performed by, a supplier that is not an excluded supplier within the necessary time frame.

(6) The direct award justifications are set out in Schedule 5.

(7) In this section, “ intelligence services ” means the Security Service, the Secret Intelligence Service and the Government Communications Headquarters.

Section 42 Direct award to protect life, etc

(1) If a Minister of the Crown considers it necessary, the Minister may by regulations provide that specified public contracts may be awarded under section 41 as if a direct award justification applies.

(2) In subsection (1), “ necessary ” means necessary to—

(a) protect human, animal or plant life or health, or

(b) protect public order or safety.

(3) Provision under subsection (1) may—

(a) specify contracts or classes of contract, or otherwise describe contracts by reference to purpose, subject-matter or contracting authority;

(b) include other conditions or limitations;

(c) confer a discretion.

(4) A Minister of the Crown must—

(a) keep regulations made under subsection (1) under review, and

(b) if the Minister considers that direct award under section 41 is no longer necessary, revoke the regulations.

Section 43 Switching to direct award

(1) A contracting authority may award a public contract directly to a supplier that is not an excluded supplier if—

(a) the authority has invited suppliers to submit tenders as part of, or requests to participate in, a competitive tendering procedure in respect of the contract,

(b) it has not received any suitable tenders or requests in response, and

(c) it considers that award under section 19 is not possible in the circumstances.

(2) A tender or request is not suitable if the contracting authority considers that—

(a) it would be disregarded in an assessment of tenders under section 19(3)(a), (b) or (c);

(b) it does not satisfy the contracting authority’s requirements or the award criteria when assessed by reference to the assessment methodology and the relative importance of the criteria indicated under section 23(3);

(c) there is evidence of corruption or collusion between suppliers or between suppliers and contracting authorities;

(d) it materially breaches a procedural requirement in the tender notice or associated tender documents.

(3) A reference to a tender breaching a procedural requirement includes a reference to a supplier breaching a procedural requirement in relation to the tender.

(4) A breach is material if the contracting authority considers that ignoring it would put the tender at an unfair advantage.

(5) A contracting authority may carry out a selection process or take such other preliminary steps as it considers appropriate for the purpose of awarding a contract under subsection (1).

(6) Before awarding a contract to a supplier under this section, a contracting authority must consider whether the supplier—

(a) is an excludable supplier, or

(b) submitted an unsuitable tender or request in response to the invitation referred to in subsection (1)(a).

Section 44 Transparency notices

(1) Before awarding a contract under section 41 or 43 a contracting authority must publish a transparency notice.

(2) A “ transparency notice ” means a notice setting out—

(a) that a contracting authority intends to award a contract directly, and

(b) any other information specified in regulations under section 95.

(3) This section does not apply in relation to the award of a contract under section 41 by virtue of paragraph 15 of Schedule 5 (direct award: user choice contracts).

Section 45 Frameworks

(1) A contracting authority may award a public contract in accordance with a framework.

(2) A “framework” is a contract between a contracting authority and one or more suppliers that provides for the future award of contracts by a contracting authority to the supplier or suppliers.

(3) Unless subsection (4) applies, a framework may only provide for the future award of a public contract following a competitive selection process.

(4) A framework may provide for the future award of a public contract without competition between suppliers—

(a) in circumstances where only one supplier is party to the framework, or

(b) if the framework sets out—

(i) the core terms of the public contract, and

(ii) an objective mechanism for supplier selection.

(5) A framework must include the following information—

(a) a description of goods, services or works to be provided under contracts awarded in accordance with the framework;

(b) the price payable, or mechanism for determining the price payable, under such contracts;

(c) the estimated value of the framework;

(d) any selection process to be applied on the award of contracts;

(e) the term of the framework (see section 47);

(f) the contracting authorities entitled to award public contracts in accordance with the framework;

(g) whether the framework is awarded under an open framework (see section 49).

(6) A framework may not—

(a) permit the award of a public contract to an excluded supplier, or

(b) prevent a contracting authority from requesting additional information from suppliers before awarding a contract.

(7) A framework may provide for the charging of fees at a fixed percentage of the estimated value of any contract awarded to the supplier in accordance with the framework.

(8) This section does not apply in relation to the award of—

(a) a concession contract, or

(b) a framework.

(9) Subsections (3) to (5) do not apply to a framework that is a light touch contract (see section 9(5)).

Section 46 Frameworks: competitive selection process

(1) A competitive selection process may provide for conditions of participation only if the contracting authority is satisfied that the conditions are a proportionate means of ensuring that suppliers party to the framework have—

(a) the legal and financial capacity to perform the contract, or

(b) the technical ability to perform the contract.

(2) In this section, a “ condition of participation ” means a condition that a supplier must satisfy in order to be awarded a public contract in accordance with the framework.

(3) A condition set under subsection (1)(a) may not—

(a) require the submission of audited annual accounts, except from suppliers who are, or were, required to have the accounts audited in accordance with Part 16 of the Companies Act 2006 or an overseas equivalent;

(b) require insurance relating to the performance of the contract to be in place before the award of the contract.

(4) A condition set under subsection (1)(b) may relate to suppliers’ qualifications, experience or technical ability, but may not—

(a) require suppliers to have been awarded a contract under the framework or by a particular contracting authority,

(b) break the rules on technical specifications in section 56, or

(c) require particular qualifications without allowing for their equivalents.

(5) When considering whether a condition is proportionate for the purposes of subsection (1), a contracting authority must have regard to the nature, complexity and cost of the public contract.

(6) A condition of participation may require the provision of evidence that is verifiable by a person other than the supplier.

(7) If a supplier does not satisfy a condition of participation, the contracting authority may exclude the supplier from participating in, or progressing as part of, the competitive selection process.

(8) A competitive selection process may provide for the assessment of proposals, but only by reference to one or more of the award criteria against which tenders were assessed in awarding the framework.

(9) The award criteria may be refined for the purposes of subsection (8).

(10) In this section, a “ competitive selection process ” means a competitive selection process for the award of a public contract in accordance with a framework.

(11) This section does not apply to a framework that is a light touch contract.

Section 47 Frameworks: maximum term

(1) The term of a framework may not exceed—

(a) in the case of a defence and security framework or a utilities framework, eight years, and

(b) otherwise, four years.

(2) Subsection (1) does not apply if the contracting authority considers the nature of the goods, services or works to be supplied under contracts awarded in accordance with the framework means that a longer term is required.

(3) If a contracting authority relies on subsection (2) in awarding a framework with a term exceeding four or eight years, the contracting authority must set out its reasons in the tender or transparency notice for the framework.

(4) In this section—

(a) “a defence and security framework” is a framework which does not provide for the future award of public contracts other than defence and security contracts;

(b) “a utilities framework” is a framework which does not provide for the future award of public contracts other than utilities contracts.

(5) This section does not apply in relation to—

(a) a framework awarded under an open framework (see section 49),

(b) a framework awarded by a private utility, or

(c) a framework that is a light touch contract (see section 9(5)).

Section 48 Frameworks: implied terms

(1) It is an implied term of every framework that a contracting authority may exclude a supplier that is an excluded supplier or has, since the award of the framework, become an excludable supplier from participating in any selection process run in relation to the award of a contract under the framework.

(2) For the purposes of the term in subsection (1), the reference to a supplier becoming an excludable supplier includes a reference to—

(a) a supplier becoming an excludable supplier on the basis of a discretionary exclusion ground that—

(i) did not apply before award of the contract, or

(ii) applied before award of the contract by reference to different circumstances, and

(b) a contracting authority discovering that, before award of the contract, the supplier was an excludable supplier.

(3) Before excluding a supplier that is an excluded or excludable supplier only by virtue of an associated person, the contracting authority must give the supplier reasonable opportunity to replace the associated person.

(4) Any term purporting to restrict or override the term implied by subsection (1) is without effect.

Section 49 Open frameworks

(1) An “open framework” is a scheme of frameworks that provides for the award of successive frameworks on substantially the same terms.

(2) An open framework must provide—

(a) for the award of a framework at least once during—

(i) the period of three years beginning with the day of the award of the first framework in the scheme, and

(ii) each period of five years beginning with the day of the award of the second framework in the scheme;

(b) for the expiry of one framework on the award of the next (but see subsection (3));

(c) for the final framework to expire at the end of the period of eight years beginning with the day on which the first framework under the scheme is awarded.

(3) An open framework may provide that, if a framework expires in accordance with subsection (2)(b) while a process for the award of a contract in accordance with the framework is ongoing, the contracting authority may continue the process and award the contract as though the framework had not expired.

(4) If there is no limit on the number of suppliers that can be party to a framework under an open framework, a contracting authority may award the framework to an existing supplier by reference to—

(a) the fact that the supplier has already been awarded a framework under the scheme,

(b) a tender relating to an earlier award under the scheme, or

(c) a tender relating to the current award.

(5) Otherwise, a contracting authority may award a framework under an open framework to an existing supplier by reference to—

(a) a tender relating to an earlier award of a framework under the scheme, or

(b) a tender relating to the current award.

(6) If a framework under an open framework is awarded to only one supplier, the framework, and the open framework, must expire before the end of the period of four years beginning with the day on which the framework is awarded.

(7) Subsection (6) applies despite subsection (2)(c) and any term of the framework or open framework.

(8) In this section, an “ existing supplier ” means a supplier that is party to a framework under the open framework.

(9) A reference to an award on substantially the same terms is a reference to an award that could be made by reference to the same tender or transparency notice without substantial modification (see section 31).

(10) A framework under an open framework may not be awarded under section 41 (direct award in special cases) or 43 (switching to direct award).

Section 50 Contract award notices and assessment summaries

(1) Before entering into a public contract, a contracting authority must publish a contract award notice.

(2) A “ contract award notice ” means a notice setting out—

(a) that the contracting authority intends to enter into a contract, and

(b) any other information specified in regulations under section 95.

(3) Before publishing a contract award notice in respect of a contract awarded under section 19 (award following competitive tendering procedure), a contracting authority must provide an assessment summary to each supplier that submitted an assessed tender.

(4) An “ assessment summary ” means, in relation to an assessed tender, information about the contracting authority’s assessment of—

(a) the tender, and

(b) if different, the most advantageous tender submitted in respect of the contract.

(5) In this section, an “assessed tender” is a tender which—

(a) was submitted in respect of the contract and assessed for the purposes of determining the most advantageous tender under section 19(1), and

(b) was not disregarded in the assessment of tenders.

(6) Subsection (1) does not apply in relation to—

(a) a defence and security contract awarded under a defence and security framework;

(b) a contract awarded under section 41 by reference to paragraph 15 of Schedule 5 (direct award: user choice contracts).