The Procurement Act 2023: a new regime governing bid challenges

What you need to know if contracting with the UK Government post-24 February 2025.

On 14 January 2025, Freshfields and Monckton Chambers co-hosted an event on how the Procurement Act 2023 will reform public procurement law in the UK when it comes into force on 24 February 2025. 

We are now publishing a series of briefings summarising the key changes being introduced by the Procurement Act 2023, which are likely to be of particular interest to our clients. In this briefing – the fourth in the series - we discuss changes to the remedies regime under the new Act. For information about what the Act would mean for exclusion and debarment, direct awards and contract performance, see: 

• The Procurement Act 2023: a new regime for exclusion and debarment
• The Procurement Act 2023: an updated regime for direct awards
• Contract Performance under the Procurement Act 2023: A New Era of Accountability

Overview

The new Act introduces key changes to the bid challenge landscape. The key changes include (i) the introduction of assessment summaries which will be provided to all bidders once a contracting authority has arrived at its decision; (ii) changes to the start and duration of the mandatory standstill, during which a contract cannot be executed; (iii) changes to who can bring a bid challenge; and (i) the codification of the test for lifting the automatic suspension once proceedings have been issued.

Bid challenges are time intensive, procedurally knotty and fast paced. This article highlights the key points for those who may be challenging or involved in defending public procurement challenges under the new Act.

Available Remedies 

As with the previous regime, there are (broadly speaking) two categories of remedy available to a disgruntled bidder: those which arise before contract execution and those which arise after. 

Pre-contractual Remedies

If a contract has been awarded, but not executed, a successful challenge could result in the court making one of the following orders: 

• an order setting aside the decision or action (such as the decision to award the contract);
• an order requiring the contracting authority to take any action (such as reconsidering a decision it has made);
• an order for damages (which can be in addition to another order, and has historically been for the profits the claimant lost because of the breach and/or wasted bid costs); or
• any other order that the court considers appropriate.
  (s.103)

Post-contractual Remedies

If the awarded contract has been executed, the only available remedies are damages; and/or an order setting aside the contract (if the conditions outlined in s.105) (s.104(1)) (see below for more details).

Interim Remedies

There are also several interim remedies set out in s.102 of the Act which can apply to any claim, regardless of whether the claim form has been issued before or after an award decision. These are temporary measures intended to be in place until the court has considered the claim. The Act broadly replicates the interim remedies that were outlined in the existing regime, except now it provides for suspending the modification of a contract or its performance. 

Notices and Standstill

As under the previous regime, the Act contains a “standstill period” during which an awarded contract cannot be executed until that standstill period has ended. The new Act maintains that mechanic – but there are some key changes. 

Assessment Summaries

These are a creation of the new Act. After reaching an award decision a contracting authority must now provide an assessment summary to each bidder (s.50(3)). These are given privately and are not published on the central digital platform. They must contain information about the contracting authority's assessment of the tender and, if different, the most advantageous tender submitted in respect of the contract.

These fulfil roughly the same function as a notice of a decision to award a contract under the previous regime. But – whereas under the old regime the notice of a decision to award the contract began the standstill period (Reg 87(2) PCR/Reg 33(1)-34 DSPCR) - under the new Act the assessment summary does not start the standstill period.

Contract Award Notice (or CAN)

After issuing the assessment summaries (but before entering the contract), a contracting authority must publish a CAN setting out its intention to enter into the contract (s.50(1)). This is what triggers the start of the standstill under the new Act.

It is important to not get tripped up by the new terminology: A ‘contract award notice’ under the previous regime refers to a notice published following conclusion of the contract (which is called a ‘contract details notice’ under the new Act (s. 53(1))). CANs must now be published when awarding call off contracts under frameworks or dynamic markets (assuming that these contracts are above threshold). 

Standstill

Under the old regime the standstill period began on issuance of a compliant “award decision notice” by the contracting authority. The standstill period then ended at midnight at the end of the tenth (calendar) day after the issuing of the notice (Reg 87(2) of the PCRs). 

Under the new Act, the mandatory standstill period is now a period of eight (working) days beginning with the day on which the CAN is published.

The contracting authority must not enter into (sign) the contract until the mandatory standstill period (or any longer standstill period stated in the contract award notice) is over. 

Standing

Under the previous regime you generally only had standing to bring a challenge if you were an ‘economic operator’ (Reg 91 PCR 2015). This would include the bidding entity (i.e. unsuccessful bidders) but generally not key sub-contractors (see IGT v Gambling Commission [2023] EWHC 1961 (TCC)). 

However, the new Act no longer contains the concept of an ‘economic operator’. It is replaced by the concept of a ‘supplier’ which is not (at present) defined anywhere in the Act. Directive/EU law no longer assists in the interpretation of this concept, so the debate surrounding whether sub-contractors can bring a claim is essentially reopened. This means that, potentially, there could be a greater number of potential claimants.

Automatic Suspension

The new Act codifies the right to an automatic suspension. If during the applicable standstill period a supplier brings proceedings in relation to a contract; and notifies the contracting authority that it has done so, an automatic suspension will apply (s.101).

Much like under the old regime, the automatic suspension will prevent the contracting authority from contracting; and it may only be ended by court order (or the end of proceedings under s.102).

This is all much in line with the old regime; but again, there are key changes:

• If they are to benefit from the automatic suspension, “suppliers” must now bring their proceedings within the applicable standstill period which is (i) the new 8 working day standstill (s.51(1)(a)); or (ii) any longer standstill period that is stated in the contract award notice (s.51(1)(b)).
• Under the previous regime, proceedings needed only to have been brought before contract execution. 
• It is unclear therefore whether, if parties bilaterally agree to extend the standstill period, and the challenging party issues a claim in that extended period, it will necessarily have the benefit of the automatic suspension.
• Until that question is settled by the courts, to preserve a right of challenge, an unsuccessful bidder may be best advised to issue proceedings by the end of the mandatory standstill (8 working days from the CAN or any longer period set out in the CAN) and continue any without prejudice discussions with the contracting authority in parallel. 

Lifting of Automatic Suspensions

Like under the old regime, a contracting authority can make an application to the court to lift the suspension at an early interim stage (as is typical). 

Under the old regime, the court would apply the American Cyanamid test to assess if the suspension should be lifted.[1] That is now replaced by a new codified test in s.101(2) and s.102(2) of the Act. The test requires that the court must have regard to: 

• the public interest in, among other things: (i) upholding the principle that public contracts should be awarded, and contracts should be modified, in accordance with the law; (ii) avoiding delay in the supply of the goods, services or works provided for in the contract or modification […]; 
• the interests of suppliers, including whether damages are an adequate remedy for the claimant; and 
• any other matters that the court considers appropriate. 

Under the old regime, applications to lift have generally been granted by the court (damages are for the most part found to be an adequate remedy). It is unclear whether the new test at s.102(2) of the Act will result in a vastly different range of outcomes for claimants. However, one clear change is that the court will be unable to stop its analysis at whether damages would be an adequate remedy; but rather go on to consider “any other matters” that it considers appropriate.

Damages

Damages should compensate a claimant for the loss it has suffered as a result of the contracting authority’s breach. As is typical, the court must decide whether the breach caused the damage or loss suffered and whether an award of damages is appropriate in any event. The court will also decide the quantum of the damages. It will take into account mitigating factors; and all the circumstances of the case.

In the previous regime, for an award of damages, there had to be a ‘sufficiently serious breach’. Yet the concept of ‘sufficiently serious breach’ is not included in the Act. It is unclear to what extent the courts will continue to apply this test. 

Whatever the case, claimants will retain the ability to seek damages (regardless of whether any set aside order is granted (s.104(2)).

Set Aside 

Orders for “set aside” have effectively replaced “declarations of ineffectiveness” under the existing regime. They apply when a breach has occurred in the award or modification of the contract, but the supplier was denied the opportunity to seek a pre-contractual remedy.

The conditions for an order to “set aside” the contract are contained in s.105 of the Act and are slightly wider than those for a “declaration of ineffectiveness” under the old regime. If any one condition is made out under s.105 of the Act, the court must set aside the contract, subject to the public interest test in s.104(3) of the Act. 

Even where the s.105 conditions are met, the Act allows the court an element of discretion to not set aside the contract, if it is satisfied that there is an overriding public interest in not doing so. Examples include cases: 

• of certain health or defence-related contracts where the impact of setting a contract aside could have an unacceptable impact; and
• where reduction of the duration of the contract or the goods, services or works to be provided would be more beneficial. 

Also, note that s.104(5) of the Act sets out certain limitations on what the court can take into account when considering the public interest exception.

[1]           In summary terms, that test required the court to consider: (i) whether there is a serious issue to be tried; (ii) whether damages would be an adequate remedy; and (iii) if not, does the balance of convenience favour the CA.

With thanks to Monckton Chambers