With the Procurement Act 2023 (PA 2023) having taken effect on 24 February 2025, here is a timely reminder how it impacts procurement challenges and remedies.
Key Questions
As the PA 2023 introduces certain procedural changes, several key questions arise:
- Will supplier challenges increase or decrease?
- How will risks change for contracting authorities?
- How will the PA 2023 influence procurement disputes?
There was no dramatic shift on 24 February 2025. Unsuccessful bidders still have the right to challenge procurement decisions under similar rules as before, and contracting authorities must continue to account for challenge risks.
Background
In the lead-up to the passage of the Procurement Act 2023, the UK government considered various reforms as part of the Procurement Bill (2022). However, several proposed changes were ultimately rejected, including:
- A tribunal for lower-value claims
- Mandatory internal reviews
- Prioritising pre-contractual remedies over damages
- A cap on recoverable damages
These proposals were dismissed due to concerns about their practicality and political feasibility. While procurement challenges serve an essential role in maintaining accountability and fairness, they also place a strain on public sector resources. The government sought to balance these interests by preserving a familiar framework while introducing refinements to improve efficiency.
Remedies Framework Under PA 2023
The PA 2023 retains many existing principles while adjusting certain procedural aspects of procurement challenges. Below are the key elements of the new framework:
Statutory Duty
Contracting authorities are legally required to comply with the PA 2023. Suppliers from the UK and treaty states have the right to enforce compliance, but only those with a legitimate interest in the outcome of a procurement process will have standing to bring a challenge. Other interested parties will need to seek judicial review rather than bringing a direct claim under the PA 2023.
Time Limits
The time limits for initiating procurement challenges remains largely the same under the new legislation. Suppliers must file a claim within 30 days of when they knew, or ought to have known, the basis for their challenge. This maintains consistency with the previous legal framework and reinforces the importance of acting promptly.
Automatic Contract Suspension
A key feature of procurement challenges is the automatic suspension of contract finalisation once a claim is filed. The PA 2023 continues this rule, ensuring that contracts cannot proceed while disputes are pending. However, courts frequently lift suspensions if they determine that financial compensation would be an adequate remedy for the claimant.
A notable revision in the new Act is that the automatic suspension will only apply if legal proceedings are initiated before the standstill period expires, reinforcing the need for swift action by claimants.
Service of Claims
Under the current rules, suppliers have a strict deadline of seven days to serve a claim after filing it in court. The PA 2023 removes this rigid requirement, instead allowing claimants up to four months to serve their claim. However, contracting authorities will have the ability to issue a notice requiring service within 14 days, which means, in practice, the effective deadline will often be extended to 28 days. This change introduces greater flexibility for claimants while still ensuring timely resolution of disputes.
Available Remedies
Pre-Contractual Remedies:
Courts retain the power to intervene in procurement decisions before contracts are finalised. Remedies include:
- Setting aside a decision that breaches the PA 2023
- Ordering corrective measures to address legal violations
- Awarding damages to an affected supplier
- Issuing any other orders deemed necessary to ensure compliance
However, in practice, these pre-contractual remedies are not commonly granted because courts often lift automatic suspensions, allowing contracts to proceed despite ongoing challenges.
Post-Contractual Remedies:
For challenges brought after a contract has been awarded, damages remain the primary remedy. A key consideration in these cases is whether the breach was “sufficiently serious” to justify compensation. Although the PA 2023 does not explicitly codify this standard, courts are likely to continue exercising discretion in determining whether damages should be awarded. Consequently, claimants may still face difficulties in securing financial redress.
Setting Aside Contracts:
The ability to nullify contracts awarded unlawfully remains intact under the PA 2023, though the terminology has changed. The new legislation refers to this remedy as a “set aside order.” The grounds for setting aside a contract remain largely unchanged from previous law and include:
- Failure to publish required procurement notices
- Violations of standstill period rules
- Unauthorised contract modifications that breach procurement regulations
This ensures that contracting authorities remain accountable for serious breaches of the PA 2023, preserving avenues for legal redress when improper practices occur.
Conclusion
While the PA 2023 introduces procedural refinements, it does not revolutionise procurement law. Many key principles remain unchanged, and claimants must continue to act promptly if they wish to challenge procurement decisions. However, the PA 2023 does offer greater flexibility in serving claims and introduces some new considerations for courts handling disputes.
Ultimately, the long-term impact of the PA 2023 will depend on how courts interpret and apply its provisions. Contracting authorities and suppliers alike will need to stay vigilant in adapting to the new legislation.
How can we help?
For further information about issues raised in this article, please contact a member of our Procurement team.
