The Procurement Act 2023: One Year On - How procurement processes are evolving

In this first article, Katherine Calder and Sarah Foster focus on changes to procurement design at selection and tender stage in three key areas of change that the Act introduced, namely: excluded and excludable bidders; differing approaches to the competitive flexible procedure; and the flexibility to change rules, scope or criteria mid procurement.

What's new for supplier exclusion?

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.

Forward-looking risk

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).

What are the new exclusion grounds?

National security: 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.

Poor performance: 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. 

Replacing "associated persons" and sub-contractors

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:

• Will you allow resubmission of the whole Procurement Specific Questionnaire (PSQ) response or just those questions impacted by the change in supply chain, e.g. previous experience? Is this permitted after the PSQ submission date? Presumably "yes".
• What about the impact on the tender response if it has been provided at the same time? Do you allow changes to the proposed solution and/or pricing schedule? When does this become a resubmission after the tender response date?
• Can bidders restructure their bid teams/consortium models entirely or is this a direct like-for-like replacement only? Can they remove the sub-contracted element?

Are we seeing more innovative process design?

The new competitive flexible procedure

The competitive flexible procedure (CFP) gives authorities broad scope to design a process suited to their needs, provided transparency, equal treatment and the section 12 objectives are met. Authorities can incorporate presentations, site visits, workshops, demonstrations and iterative feedback more confidently than under the PCR 2015 due to explicit encouragement from the Government.

The CFP is particularly useful for iterative shaping of requirements where innovation, complexity or bespoke delivery models require market feedback and the opportunity for suppliers to demonstrate their solutions through presentations or prototypes. 

Government guidance suggested authorities could turn traditional processes on their head if reasonable and appropriate in the circumstances, e.g. not checking conditions of participation until the end; filtering suppliers based on vital but limited aspects of their proposals (e.g. a demo) before asking for written tenders at all; evaluating quality and price sequentially rather than together.

Yet, despite this flexibility, we are seeing that many authorities remain cautious and continue using dialogue/negotiation‑like formats. Why is this? This hesitation usually stems from concern about transparency obligations or the risk that informal interactions could become “modifications” if not managed carefully. The threat of procurement challenge still looms large and until we see how the courts will approach the new flexibilities, the market remains cautious.

Those who have embraced CFP flexibilities report clear benefits, including more manageable bidder pools and better‑tailored solutions. For example, one local authority has designed a process with initial capability filters before issuing the PSQ to down-selected bidders. This approach helped it reduce a pool of 250 interested suppliers to 20 genuine bidders to take forward to PSQ.

Refining award criteria or modifying the terms of a procurement?

Section 24, refining award criteria: Authorities may refine award criteria in a competitive flexible procedure before inviting tenders, provided the tender notice signposted the possibility of refinement and, had the refinement been made earlier in the process, it would not have allowed one or more unsuccessful suppliers to progress to the next stage.  

This is particularly useful in a multi-stage competitive flexible where early dialogue may clarify requirements or authority priorities. Refinements may include:

• changing weightings and the relative importance of award criteria (explicitly permitted in section 24 of the Act);
• rewording technical questions, perhaps following dialogue or supplier clarification; or
• amending or adding sub‑criteria.

Refinement is unlikely to extend to adding new main criteria, or new sub-criteria not associated with the main criteria, or adding or removing pass/fail tests.

Authorities should carry out an “outcome test” to check that unsuccessful suppliers would not have progressed had the refinement been made earlier, documenting the result for its audit trail. This will be easier when weightings have been changed, as it will be a simple mathematical process, but harder when questions or sub-criteria change.

Section 31, modifying the terms of the procurement: Authorities may also modify the terms of the procurement:

• before the deadline for tenders in an open procedure (or CFP when there is no previous request to participate stage);
• before requests to participate in a CFP; or
• at any time, if the modification is not substantial (i.e. it would not have changed the pool of bidders in the process, had the modification been made earlier).

Section 31(7) provides that the "terms" of the procurement means anything set out in a tender notice including the conditions of participation or the award criteria. This could presumably include altering the scope of the services, the technical requirements, the timelines or the procurement process/structure itself.

Award criteria can be changed under section 24 or section 31, but section 31 is wider in its application (it includes the open procedure) and appears to deal with circumstances where unforeseen modifications are required. It prohibits change in wider circumstances, including where a supplier who didn’t request to participate at all would have wanted to participate (contrast with section 24 which focuses on unsuccessful suppliers only). Reliance on section 24 requires advance planning and publication in the tender notice and is far more focused on deliberate and strategic refinement of award criteria at each stage. If authorities are changing award criteria, they need to understand under which section they do this and ensure this is recorded.

Conclusion

One year on, it is clear that the Act’s promised flexibilities come with practical challenges for authorities. The shift to forward‑looking exclusion assessments, the broadened accountability across connected and associated persons, and the need to manage potentially disruptive supply‑chain substitutions all require more resource, clearer internal processes and confident decision‑making.

At the same time, the new competitive flexible procedure offers meaningful opportunities to design procurements that better reflect local priorities and market realities but only where authorities maintain transparency and equal treatment.

As authorities gain experience with refining and modifying procurement documents under sections 24 and 31, a more nuanced understanding of how and when changes can be made is emerging.

Ultimately, the first year of the Act shows that its success will depend less on the legal flexibilities themselves and more on whether public bodies have the capability, confidence and governance structures to deploy them effectively.

In our next article we will look at other practical impacts of the Act such as how to choose the right regime now the Provider Selection Regime applies too; how authorities are tackling the various notice requirements; considerations when making modifications; and setting and monitoring KPIs. 

We invite Local Government Lawyer readers to join senior members of DAC Beachcroft's Procurement team to our webinar on 19 March 2026. For more information, please click here or contact This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..