By Sarah Foster, Katherine Calder & Victoria Fletcher
|Published 28 April 2026
Note: This article first appeared in Local Government Lawyer on 27 February 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 first article, we focus on changes to the supplier exclusion regime.
The introduction of the Cabinet Office’s debarment list was a headline-making change and was broadly welcomed by the market. It does make sense having seen many frustrated headlines over the years regarding failing suppliers continuing to win large contracts.
The list remains empty for now but nevertheless, the process for placing suppliers on it is operational, and contracting authorities must check it in every procurement.
However, what has been discussed less are the changes to the grounds for exclusion themselves, particularly the emphasis on forward‑looking risk, the usability of the new national security grounds and the accountability of connected and associated persons.
While many exclusion grounds resemble those in the Public Contracts Regulations 2015 (PCR 2015), the emphasis is now on forward‑looking risk. Where relevant circumstances are disclosed, authorities must assess not only whether those circumstances give rise to a ground for exclusion, but whether the circumstances giving rise to the ground are continuing or likely to occur again. This is similar to the "self-cleaning test" under the PCR 2015 but the focus there was whether the measures taken by a supplier were "sufficient to demonstrate its reliability despite the existence of a relevant ground". Authorities now need to form a view not only on what happened (though still relying on supplier disclosure rather than independent due diligence), but whether a similar failure is likely to happen again – a judgment many procurement teams feel ill‑equipped to make. They are unsure about how they could gather information to make such an assessment and what level of assurance is needed.
Authorities are taking a light-touch approach to supplier exclusion and are not, in reality, altering their approach. This may explain why the list of excluded suppliers reported to the Cabinet Office and/or placed on the debarment list remains low (and zero in the latter case).
The new national security discretionary ground was also very much welcomed, especially for procurements involving sensitive data or infrastructure which attract international suppliers from states the public or media may consider a risk. In most cases it is country of registration which is the concern rather than holding any more detailed information on potential tenderers. However, in practice the requirement under section 29 of the Act to notify a minister via the National Security Unit for Procurement (and the two‑month indicative referral period) makes it a slow and administratively heavy tool in practice and one which authorities are reluctant to take. Of course, placing the decision with ministers also means exclusion on this ground will be a political decision. We are finding authorities are reluctant to make a referral and continue to rely on more traditional ways to ensure suppliers which they consider may pose a high security risk are not successful.
The expanded ground for poor supplier performance will, no doubt, become a useful tool if used correctly and failures are properly managed and reported. There remain some questions as to practical application e.g. query whether a settlement agreement should be disclosed when many include confidentiality provisions and/or no admission as to breach.
It will become easier for authorities to assess poor performance once there is more data in the form of contract performance notices, though how many are likely to identify poor performance or breach? Many authorities are including three 'achievable' standard KPIs as their publishable KPIs in public contracts, to make contract management and publishing obligations as palatable as possible to attract suppliers to the competition and reduce risk - so it will remain to be seen how useful the data will become in reality.
The Act widens accountability to associated persons (entities relied on by a supplier to pass the conditions of participation) and sub-contractors and allows exclusion of bidders based on those third parties if an exclusion ground applies to them. Note "connected" persons (e.g. parent entities, directors) were always covered but now it is much clearer that they are so.
This means that suppliers need to declare their whole supply chain early in the process and authorities must carry out due diligence on all associated persons (who may also be sub-contractors) and may carry out due diligence on other sub-contractors.
Before excluding a supplier because an associated person or sub-contractor is an excluded or excludable supplier, the authority must give the supplier the opportunity to replace that third party (there is no such opportunity in respect of a connected person being an excluded or excludable supplier). Authorities should be aware in advance how this might impact their procurement timetable:
As the first year of the Procurement Act 2023 beds in, it is clear that while the new exclusion regime offers stronger tools and clearer accountability, its practical impact is still emerging. Many authorities remain cautious, balancing the desire for robust supplier oversight with resourcing pressures, political sensitivities and uncertainty about how to assess forward‑looking risk. As data, guidance and market familiarity improves, we expect authority confidence to grow. In the meantime, close attention to process, documentation and early supply‑chain engagement will be key to making the regime work as intended.
In our next article we will look at the new flexibilities of the competitive flexible procedure and how authorities are approaching their procurement processes.
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