Welcome to ‘Did You Know?’, Hempsons’ publication designed to keep you informed about the latest legal developments, legislation, and noteworthy case law across our sectors.

This edition will be a spotlight on some key areas of the Procurement Act 2023 (the “Act”) and a significant new case. In future editions, we will explore topics such as employment, inquests and more, ensuring you stay well-informed about the latest developments in these areas.

We hope you find the articles in this edition both interesting and useful. If you need any legal assistance, have questions, or wish to discuss any of the issues covered, we would be delighted to hear from you.

In short, the Procurement Act 2023 (the “Act”) won’t significantly change how things work under the PSR.

The PSR is its own stand-alone regime that applies when “relevant authorities” (NHS England, Integrated Care Boards, NHS trusts, Foundation Trusts, and local or combined authorities) are procuring “relevant healthcare services” as defined in the PSR. There have, however, been a few minor amendments to the PSR to take account of changes brought about by the Act. These changes do not affect the processes and contracts under the PSR, other than in relation to the provisions on exclusions and debarment.

Click here for details on these changes, and how these changes impact processes already underway.

If you are a “relevant authority” and you wish to procure a service that is classified as relevant healthcare, you must follow the relevant processes and transparency requirements within the PSR. The procedures and transparency requirements of the Act will not be applicable.

Please also note that framework agreements established under the PSR can only be established by relevant authorities, noting which organisations are defined as relevant authorities above.

Many of the below-threshold rules under the Procurement Act 2023 (the “Act”) are similar to those under the Public Contracts Regulations 2015 (the “PCR”), such as prohibiting suitability assessments to short-list suppliers.

Contracts with an estimated value below the relevant threshold for that type of contract are known as a below-threshold contract. It is not a public contract and, therefore, is not a covered procurement for the purposes of the Act.

This means that below-threshold contracts are not subject to the main rules of the Act.

Click here for more details on below-threshold contracts.

The most notable difference between the Act and the PCR is that the Act is clear that if a contracting authority modifies a below-threshold contract where the modification would take the value of the contract above the relevant threshold, the modification is caught by the Act. These are known as “convertible contracts”. A modification that would bring a below-threshold contract’s value above the procurement financial threshold is only permitted under the same modification grounds that apply to all above-threshold contracts. Once the modification has taken place, the full scope of the Act will apply to that contract.

The general principle is that procurements, including below threshold contracts that commence after 24 February 2025, must be conducted by reference to the Act only, whilst those that were commenced under the previous legislation must continue to be procured and managed under that legislation until such a time as the contract, or commercial tool, ceases to exist.

Therefore, the new introduction of “convertible contracts” is only applicable to a below-threshold contract that has been awarded post 24 February 2025.

Generally, the Procurement Act 2023 (the “Act”) enables contracting authorities to continue to establish and manage frameworks similarly to the Public Contracts Regulations 2015 (the “PCR”).

The Act has also introduced a new type of framework – the open framework. Many of the same framework rules apply to an open framework. However, an open framework can run for up to eight years and allow new suppliers to join during the life of the framework.

The open framework must, as a minimum, be re-opened at least once during the first three years and at least every five years following that. There is scope to re-open more frequently, such as on an annual basis, if desired.

Suppliers can be readmitted to the open framework when a successive framework is awarded in several ways. If there is no limit on the number of suppliers allowed on the framework, contracting authorities can readmit suppliers based on their previous award or by evaluating an earlier or new tender. However, if there is a limit on the number of suppliers, they cannot be automatically readmitted and must be assessed based on either a new or earlier tender.

The benefits include maintaining competitive frameworks, driving value for money, and minimising administrative efforts by avoiding the need to reassess all suppliers’ tenders.

We will have to see whether open frameworks are established and become commonplace, or whether familiar “closed” frameworks with a duration of up to four years remain the norm.

Please note that framework agreements can only be established by contracting authorities.  Please also note the transparency requirements around call off contracts.

The Procurement Act 2023 (the “Act”) introduces a new statutory requirement for contracting authorities to “have regard” to the policy objectives contained within the published NPPS (the version applicable at the time the contracting authority is carrying out the procurement).  Please note that the NPPS is not applicable to private utilities or when awarding a contract under a framework agreement or dynamic market.

On 13 February 2025 the government published the latest statutory NPPS (Click here) in which public procurement can support delivery of the Government’s missions, which includes:

• Kickstarting economic growth
• Make Britain a clean energy superpower
• Take back our streets
• Break down barriers to opportunity
• Build a National Health Service fit for the future

Contracting authorities have a duty only to consider the NPPS national priorities. Contracting authorities will need to consider the NPPS and consider how to design their processes to have regard to the competing requirements set out in the NPPS.

When considering PPNs, it is essential to understand to which group of organisations the PPN applies.

For a full list, please visit “Procurement Act 2023 PPNs”:

• PPN 001 – setting targets for SME and VCSE spend for central government authorities – from 1 April 2025 central government authorities need to set a three-year target for SME spend, and from 1 April 2026 a two-year target for VCSE spend. This PPN does not, for example, apply to NHS Trusts or Foundation Trusts, but will apply to NHS England.
• PPN 002 – Taking account of social value in the award of contracts – the Social Value Model has been updated to align with the NPPS. The new Social Value Model is mandatory from October 2025 but can be applied sooner. This PPN applies to all central government departments, their executive agencies and non-departmental public bodies which are referred to as ‘in-scope organisations’.  NHS England are caught, but other NHS organisations are not.  However, other NHS organisations are caught by the NHS England guidance that has been published, which expands the scope of the PPN.
• PPN 015/018 – How to take account of a supplier’s approach to payment in the procurement of major contracts – it replaces PPN 10/23 from 24 February 2025. PPN 018 will replace PPN 015 from 1 October 2025.
• PPN 019: Requirements to publish on Contracts Finder – update guidance for contracting authorities on the requirements to publish this information following the commencement of the Act.

PPN 03 – 014, 016 and PPN 017 – have been updated to reflect new terminology introduced by the Act and the Procurement Regulations 2024.

There is now a provision under the Procurement Act 2023 (the “Act”) that requires contracting authorities to publish a contract termination notice on termination of a contract (subject to exemptions).

This includes where a contract has reached its natural end date, or all the deliverables have been fulfilled. Please note private utilities and user choice contracts (under direct award) are exempt from contract termination notices.

The contract termination notice (ref UK11) must be published within 30 days of the date the contract ends.

Besides the standard information about the contracting authority, supplier, and contract, contract termination notices must include:

• The reasons for termination
• The date of termination
• Whether the termination is a result of a breach of contract
• The estimated value of the public contract, at the time of expiry

This allows contracting authorities, suppliers and the public to see when a contract has ended – Transparency is key to the Act.

This is just one of the many new notices that are required under the Act.

The Court of Appeal has handed down a significant judgment (Working on Wellbeing Ltd (trading as Optima Health) v Secretary of State for Work and Pensions, Department for Work and Pensions [2025] EWCA Civ 127). This judgement is a must read when considering potential clarification of tenders.

Link to case: https://www.bailii.org/ew/cases/EWHC/TCC/2024/766.html and our more detailed assessment of the case here.

Optima bid for a call-off contract under a framework agreement to provide services to the DWP. The terms of the framework agreement were clear that suppliers could not charge prices in excess of framework prices for any call-off contract. When bidding, Optima did, in fact, submit prices for some lines that were above the framework prices. DWP excluded Optima’s bid. Had Optima not been excluded, it would have been the highest scoring bidder (the impact of exceeding the framework prices was 0.02%).

Optima challenged arguing that the error was an obvious clerical error and therefore to be excluded was a breach of the principles of transparency and equal treatment and/or was disproportionate.

The High Court held that DWP’s decision to exclude the bid was lawful. Optima appealed.

The Court of Appeal allowed the appeal. The judgment sets out that the bid should not have been excluded (due to how the ITT had been drafted in an inconsistent manner) and that the DWP should have sought clarification.

The judgment of Coulson LJ also provides a detailed assessment of when clarification can and should be sought. Coulson LJ expressly stated:

“The ultimate purpose of the rules relating to public procurement, as set out in paragraphs 59-62 above, is the need for healthy and fair competition and to permit the proper evaluation of the tenders. Common sense is therefore required when applying the rules to achieve those ends: experienced evaluators working for contracting authorities should know when a response to a request for clarification is a simple adjustment of the kind they generally expected, and when it is an attempt to have another go. The latter is a new bid or a substantial change to the original bid. What is to be avoided is a strict and over-literal approach which may lead to the exclusion of the best tender for no objectively justifiable reason.”

While this clear statement of intent may provide greater assurance to contracting authorities and bidders that (appropriate) clarification is permitted, each case will need to be carefully considered on its facts and care should be taken to ensure that bidders are not allowed to submit a substantially new tender.

Hempsons have an established procurement practice and a national reputation for the provision of high-quality legal advice and project management in this area. Procurement law is a fast moving and constantly evolving area of law.

Procurement law presents a number of challenges for contracting authorities in ensuring that they comply with the Procurement Act 2023 and Procurement Regulations 2024, processes that remain caught by the Public Contracts Regulations 2015, the Provider Selection Regime, and the requirements of policy and guidance.

Suppliers should also be aware of the rules to improve their chances of successfully bidding/challenging.

Our procurement team sits within a wider Corporate Commercial department and can provide fast and incisive advice nationally.

We advise on all aspects of public procurement law, both for contracting authorities and suppliers

Our procurement solicitors can assist with:

• Advice and support on compliance with procurement legalisation
• Assistance with preparation, design, drafting, reviewing of procurement documents and governance policies.
• Support in the life cycle of the contract.
• Help with challenges made in regard to your procurement or where you feel that a procurement has not been run or evaluated compliantly.

Our specialist procurement team – main contacts