The Procurement Act 2023 (the "Act") came into force in February this year
The Procurement Act 2023 (the "Act") that came into force in February this year marked a shift in the UK’s approach to public procurement, including the regulation of defence and security contracts. Replacing the Defence and Security Public Contracts Regulations 2011 (DSPCR), the Act introduces a consolidated legal framework that applies to defence and security (D&S) contracts alongside other public procurement processes, which aims to both streamline procurement legislation and simplify the rules for contracting authorities.
This article explores key changes under the Act, focusing on:
- the differences from the DSPCR;
- the new concept of Defence Authority Contracts; and
- national security provisions, including exclusion and debarment on national security grounds.
1. From DSPCR to the Procurement Act 2023: key changes in the treatment of defence and security contracts
Despite aiming to consolidate the general procurement rules in the UK, the Act retains distinct provisions tailored for the unique sensitivities and operational demands of defence & security procurement.
Wider scope of D&S contracts
The scope of a defence and security contract under the Act is notably broader than under the DSPCR. It encompasses not only traditional military goods and services but also any goods, services, or works relevant to the operational capability, effectiveness, readiness for action, safety, or security of the armed forces. This allows greater flexibility in classifying and managing procurements with dual-use or emerging technologies, such as civilian drones repurposed for military applications in order to maintain operational advantage.
Increased flexibility
The Act introduces more flexible mechanisms for direct awards and permitted modifications, enabling defence authorities to respond rapidly to technological advancements. These flexibilities are designed to ensure continuity of supply, enable defence authorities to respond to adverse developments, and to seize technological advantages—vital capabilities in a fast-moving defence environment. Further detail is included on these mechanisms below.
2. Defence authority contracts: special rules
The Act introduces the concept of the defence authority contract, creating a sub-category of defence and security contracts with special rules that apply only to designated defence authorities.
Who qualifies as a defence authority?
Defined under section 7(5) of the Act, a "defence authority" is a contracting authority specified in regulations made by a Minister of the Crown. Currently, the following are specified as defence authorities:
- The Secretary of State for Defence
- The Atomic Weapons Establishment
- The National Crime Agency
- The Oil and Pipelines Agency
Special provisions applying to defence authorities
Certain provisions of the Act relating to defence and security contracts only apply to those awarded by defence authorities. Those are:
- Direct awards (Schedule 5, para 20): Defence authorities may directly award contracts when necessary to enhance or maintain the operational capability, effectiveness, readiness for action, safety, or security of the armed forces; and
- Modifications (Schedule 8, paras 10–11): Modifications of defence and security contracts are permitted for:
- Incorporating new technologies; or
- Mitigating negative impacts of technological developments; or
- Ensuring uninterrupted supply of essential goods, works or services to ensure the armed forces' ability to maintain their operational capabilities, effectiveness, readiness for action, safety, security or logistical capabilities.
These targeted provisions acknowledge the practical and security-driven needs of defence procurement, enabling agility without undermining legal integrity.
3. National security: grounds for exclusion and debarment
National security plays a central role in the exclusion and debarment mechanisms under the Procurement Act 2023. The Act introduces new and extended exclusion rules, with both mandatory and discretionary grounds related to national security.
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