Note: This is the fourth article in our own DACB series on the Procurement Act 2023, and a shortened version of an article first published in Local Government Lawyer on 1 April 2026.
We are publishing a series of articles looking at 'The Procurement Act 2023 - one year on'. Throughout the series, we take an honest look at what has changed in procurement practice, what challenges are being considered and what is working well.
In this fourth article, we consider some of the Act's practical impacts and its implications in respect of notice requirements, modifications and contract management.
Tackling notice requirements
The Act places an emphasis on transparency and there are now 17 notice types available to authorities. Authorities need to be aware of publication requirements and be conscious of what notice needs to be published, and when.
Not all notices are mandatory, for example the Planned Procurement Notice (UK3). This can be used to reduce timescales, much like a PIN under the old regime, but a Tender Notice (UK4) will still be required, meaning it may not have any significant benefit – especially if the opportunity has already been published in a Pipeline Notice (UK1). While a Contract Details Notice (UK7) is required for qualifying below-threshold contracts, a Below Threshold Tender Notice (also UK4) is not mandatory for all below-threshold contracts.
Directly awarded contracts now require at least four notices (a Transparency Notice (UK5), a Contract Award Notice, a Contract Details Notice and at least one manage stage notice). This is a significant shift away from the position in the PCRs where only the old-style Contract Award Notice was required and an authority would potentially also issue a Voluntary Ex-Ante Transparency Notice.
A Transparency Notice, according to Government guidance, is published before the contract is negotiated with the proposed supplier. We are aware of some Contract Award Notices following very quickly after the Transparency Notice – so quick there was no time for negotiation. Would a Transparency Notice ever be appropriate if an authority has not negotiated with the proposed supplier already? We would assert that an authority would want to know the deal before publicly stating it was considering entering into a contract with the supplier named in the notice.
Considerations around modifications
Notices
Under the PCRs, modification notices were only required in two circumstances - Regulation 72(1)( b) and Regulation 72(1)( c). These were also published after the modification was made.
There is now the Contract Change Notice (UK10). The obligation to publish a Modification Notice is mandatory but does not necessarily match with what might be argued to be a “substantial modification”. It has led to some confusion about what needs to be published. A Modification Notice is not required where the value of the contract increases or decreases by more than 10% for supplies and services contracts, or 15% for works contracts, or where the term increases or decreases by more than 10%. However, does an authority publish for all contract variations for ease? It would help document the history of a contract.
Many contracts include compensation events and there will be a process to claim them. The potential value of compensation events should be within the estimated contract value. When a compensation event occurs it should simply be the operation of the contract, but are these contract modifications and if so, are they justified under Schedule 8 paragraph 1 which allows for changes which are provided for in the contract? Guidance on contract modifications says that anything "provided for in the contract" is likely to be exempt which implies that not everything will be and may need a notice. The short answer is that it probably depends on the type of event and how clearly it is defined. A compensation event may need a notice where it is very broad and simply allows the employer to change the requirements, for example, but it may not be needed if specific to the outcome of a specific survey.
Change of supplier
Under Regulation 72(1)(d) of the PCRs, the entity holding a contract could change following corporate restructuring, provided the new supplier fulfilled the criteria for qualitative selection and there were no other substantial modifications.
Schedule 8 (9) of the Act explains "A novation or assignment of a public contract can be made to a supplier that is not an excluded supplier if it is required following a corporate restructuring or similar circumstance". The Government guidance is that the position from the PCRs has not changed, but there are some important points to note.
Firstly, the Act only mentions novations and assignments but what about a change to the ultimate parent or a material subcontractor as was envisaged by Pressetext? Are these changes now automatically permitted or actually automatically barred? Novations and assignments of the contract itself were the only things that were arguably not allowed under the PCRs, so why are they now permitted given the opportunity for abuse by allowing suppliers to sell their public contracts.
Further, the Act explicitly states that the novation or assignment "is required" following a corporate restructuring or similar circumstance, but there is currently no guidance on what "corporate restructuring" means – is it only intra-group? And what is a "similar circumstance"? Insolvency is not mentioned, like it was in the PCRs. We will need to see how the courts interpret this provision. In the meantime, authorities should ask sufficient questions of any supplier making such a proposal. The motive may be simply to sell an established contract.
Setting and monitoring KPIs
Section 54 of the Act requires that contracts over £5m (excluding light touch, frameworks and concessions) must include at least three key performance indicators (KPIs), unless KPIs are not appropriate for assessing the supplier’s performance. Regulation 39 of the Procurement Regulations 2024 requires the contracting authority to publish a Contract Performance Notice (UK9) detailing the supplier’s performance against the KPIs set in accordance with Section 54 each year and at the end of the contract. Government guidance suggests the Contract Performance Notice only relates to the three most important KPIs (which can change). But what if an authority decides to set more KPIs? The Act itself states that three is a minimum and the KPIs which are chosen must be published.
The contract needs to include a mechanism for the contracting authority to calculate an annual rating. A contracting authority may assess their suppliers against their own internal ratings but must use the ratings contained in the Procurement Regulations 2024 in the Contract Performance Notice (Good, Approaching Target; Requires Improvement; Inadequate; and Other). However, at present, it is unclear if this requirement relates to all KPIs set collectively, the three KPIs that have been determined the most important collectively, or each KPI individually. Authorities should make it clear to potential suppliers what the authority's decision is e.g. publishing one assessment or multiple. Suppliers will have an interest in the content of Contract Performance Notices as these notices will publicly reveal their performance.
