The Act provides that, subject to certain limited exceptions, contracting authorities must “have regard to” the NPPS (or in the case of Welsh contracting authorities, the NPPS for Wales).  It is notable that the obligations to have regard to the NPPS are not limited to a particular stage of the procurement (e.g. when designing the procurement or setting award criteria etc.) and therefore in principle the NPPS will be relevant throughout the lifecycle of the procurement and subsequent contract. 

Interestingly, the NPPS starts by noting that the Government will be introducing a new public interest test for contracting authorities to assess, at the outset of a procurement process, whether the work should be outsourced at all, or if it could be done more effectively and drive better value for money in house. 

Shortly after the 2024 General Election, the Labour Government announced it would be delaying the Act’s entry into force to 24 February 2025 in order to enable the new Government to review and revise the NPPS. The new NPPS was published on 13 February 2025 and provides that in carrying out a procurement process covered by the Act, a contracting authority must have regard to “the importance of delivering value for money” (VFM), which should be the overarching priority in public procurement. Although this was also the key focus of the previous version, the February 2025 statement provides much more detail as to what factors may be relevant to any VFM consideration. In particular, the NPPS states that VFM must include consideration of outcomes and quality to avoid waste from low value, poor quality bids, by balancing effectiveness, efficiency and economy over the lifecycle of a product, service or works. Factors which contracting authorities should have regard to include those aimed at delivering economic growth, economic and social value and internally building commercial capacity, such as:

• encouraging participation of SMEs and voluntary, community and social entries in public tenders and maximising spend with such organisations;
• early market engagement to consider innovative products and services; 
• securing social and economic value, taking account of local and regional economic growth plans; and
• ensuring suppliers are actively working to tackle environmental impact and stamp out late payment of invoices in their supply chain.

The reference to tackling late payment of invoices within the supply chain is part of a wider policy initiative. The Government previously announced through Procurement Policy Note 015 that as from 24 February 2025, central Government departments, and their executive agencies and non-department public bodies should ensure that for contracts worth in excess of £5m, suppliers are expected to demonstrate they are paying 95% of invoices within 60 days (90% with an action plan), and also paying all their invoices within an average of 55 days. This overall average timescale is intended to be reduced further from 1 October 2025 via PPN 018, when the requirements will be for a supplier to demonstrate it pays all its invoices within an average of 45 days.

Another key focus of the Act has been to improve transparency both during the procurement process and subsequently during the life of the contract. There are a number of new notices and mandatory publication obligations that contracting authorities must comply with including, amongst others:

• advance notification of the intention to modify a public contract (as opposed to the publication of a VEAT notice); 
• the specific KPIs set in contracts worth in excess of £5m (which will be used subsequently to assess a supplier’s annual performance under the contract); and  
• publication of a copy of any public contract estimated to be worth more than £5m, within 90 days of the contract being entered into. 

However, the requirement to publish a notice summarising a supplier’s annual performance against KPIs referred to above and, perhaps even more controversially, a notice if a supplier’s breach of contract results in a termination of the contract, the award of damages or a settlement agreement, is not yet in force.  It is unclear whether this simply reflects the natural time lapse between the entry into force of the Act and the award of contracts governed by it, or is a signal of a more material reservation about this particular set of transparency requirements. 

Although the existing procurement Regulations provide for mandatory and discretionary exclusion of bidders/suppliers, a key aspect of the Act relates to the strengthening and expansion of this regime. 

The first key change is that the Act introduces a Central Debarment List (the Debarment List) which will enable Ministers to commence a process to place suppliers onto the Debarment List. This process is in addition to the current arrangements whereby contracting authorities make their own tender by tender evaluations. If a supplier is on the Debarment List, all contracting authorities will need to take that into account when assessing whether a supplier should be excluded from a public procurement process. Suppliers can be placed on the Debarment List for up to 5 years.  The Government recently announced that it would be taking steps to initiate this process in respect of a number of contractors who are named in the Grenfell report and who may be considered to have committed professional misconduct. Given the time that has elapsed since the tragedy, some have questioned whether that conduct will be considered to have occurred within the relevant time period envisaged under the Act, which is typically limited to conduct occurring in the 3-5 years prior to the decision on exclusion. However, the Government is likely to focus on the issuance of the Grenfell report’s findings when assessing the relevant time period. 

Secondly, the old mandatory and discretionary grounds of exclusion are now renamed, so that bidders/suppliers are either “excluded” or “excludable” suppliers, with the grounds leading to each of those designations now expanded. This means, amongst others, that suppliers considered to give rise to national security risks or have a track record of consistently poor performance in public contracts, as well as those considered by the relevant decision maker to have breached competition law, could be excluded from public procurement tenders.  From a competition law perspective, it is notable that criteria resulting in a supplier being deemed to be an excludable supplier are no longer limited to circumstances where a supplier has been found to have infringed competition law by the Competition & Markets Authority (CMA) or other competition regulator. The Explanatory Notes to the Act make clear that this could also apply whilst the supplier is being investigated for an alleged breach of competition law. In practice, this could therefore result in a prolonged period of exclusion if, for example, a company being investigated by the CMA for involvement in a price fixing cartel is first an excludable supplier during the investigation, and then subject to a separate mandatory ground of exclusion as an excluded supplier if the CMA subsequently issues an infringement decision. 

Thirdly, the Act also makes clear that when considering whether a bidder/supplier is excluded or excludable, the focus is not limited to the legal entity submitting the bid but can also include consideration of the supplier’s “connected persons” and/or any “associated persons”.  In summary, “connected persons” include persons with significant control over the supplier, parent or subsidiary companies, and/or predecessor companies, amongst others. Associated persons are third parties whose experience and resources are being relied on in the tender, such as named sub-contractors and/or consortia partners. Where the grounds for exclusion relate to an associated person, the supplier should be given the opportunity to replace that associated person. 

Fourthly, the regime will now apply both during the tender process and also to suppliers who meet one of the grounds of exclusion during the life of any public contract governed by the Act, as the Act gives contracting authorities an implied right to terminate the contract – including in circumstances where the supplier has, since the award of the contract, become an excluded or excludable supplier (including by reference to an associated person). 

It is, however, important to note that, other than where a bidder/supplier is added to the Debarment List as an excluded supplier, a designation as an “excluded” or “excludable” supplier will not automatically result in exclusion from a tender process. Instead, the Act provides that where a supplier is so designated, a contracting authority must assess the circumstances giving rise to the application of the exclusion grounds. Only if the contracting authority considers that the circumstances in question are continuing or likely to occur again, will the supplier be excluded. In making this assessment the Act provides that the contracting authority may have regard to factors such as: 

• whether the supplier has paid any compensation; 
• the steps taken to prevent a reoccurrence of the issue, commitments to do so and provisions for monitoring such steps; and/or 
• time elapsed since the circumstances last occurred. 

It remains to be seen how these factors may be assessed in practice and how high a bar contracting authorities may consider it is reasonable to set when considering whether to exclude a bidder/supplier. However, it is clear that in many cases even a designation as an “excluded” or “excludable” supplier may not necessarily be the end of the story.

The Act also introduces a number of amendments to the procurement remedy regime.  For example, the standstill period is now eight working days rather than 10 calendar days, and automatic suspension (which prevents contracting authorities entering into a disputed contract without first seeking court approval to lift the stay) will only be available in respect of challenges brought before the courts during the standstill period, as opposed to the current position where the automatic stay will apply as long as the challenge is brought before the courts prior to the contract being entered into.  The test for lifting an automatic stay is now contained in the legislation, although it remains to be seen whether this provision will result in fewer stays being lifted. However, in light of the much tighter timescale for obtaining an automatic stay in the first place, there may be fewer instances where this becomes relevant. 

There are also changes to the information to be provided to losing bidders regarding the assessment of the bids. However, perhaps the biggest procurement question of all is whether any action for damages for breach of the procurement rules will still need to demonstrate that the breach is “sufficiently serious” to merit damages, in accordance with the high standard set in the recent Braceurself decision.