Public procurement

1 Introduction
2 The Procurement Act 2023
3 Background: the Government Construction Strategy
4 Procurement route
5 Contracts
6 Building Information Modelling
7 Major projects
8 Payment
9 Related articles on Designing Buildings
10 External references

[edit] Introduction

Public procurement in the UK construction sector is now governed by the Procurement Act 2023, which came into force on 24 February 2025. The Act creates a single, simplified legal framework for how public bodies buy works, goods and services, replacing the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011.

It builds on, but supersedes, the principles first set out in the 2011 Government Construction Strategy (see Background, below), several of which continue to influence practice even though the strategy itself has been superseded by the National Procurement Policy Statement and the Construction Playbook.

[edit] The Procurement Act 2023

The Act was originally expected to come into force in October 2024 but was delayed to allow contracting authorities and suppliers more time to prepare; it was commenced on 24 February 2025. Alongside a simpler rulebook, it introduces:

Two headline procurement procedures: the open procedure and the competitive flexible procedure. These replace the previous restricted procedure, competitive dialogue, competitive procedure with negotiation, innovation partnership and design contest routes. The competitive flexible procedure allows a contracting authority to design a process suited to the individual project, provided it remains transparent and proportionate;
New transparency obligations, including pipeline notices, planned procurement notices, tender notices and contract details notices, published through the central digital platform (Find a Tender), and a duty to publish a minimum of three key performance indicators for contracts worth more than £5 million and lasting longer than 12 months;
A National Procurement Policy Statement (NPPS), a statutory statement of the government's strategic procurement priorities laid before Parliament alongside commencement, replacing the previous non-statutory Public Procurement Policy Statement and a number of individual Procurement Policy Notes (PPNs);
A centralised debarment list, allowing suppliers to be excluded, or made excludable, from public contracts on integrity, performance or national security grounds;
Strengthened prompt payment requirements, extending the 30-day payment obligation and reporting duties further down the supply chain (see Payment, below).

[edit] Background: the Government Construction Strategy

The Government Construction Strategy (available from the Cabinet Office website) was published in May 2011. It was prepared by the Efficiency and Reform Group, working with the Construction Sector Unit of the Department for Business Innovation and Skills (BIS), and Infrastructure UK (IUK, which itself was later absorbed into the Infrastructure and Projects Authority, and then, from April 2025, the National Infrastructure and Service Transformation Authority – see Major projects, below).

It was a relatively short document that replaced many hundreds of pages of guidance previously published by the Office of Government Commerce (OGC, itself since absorbed into the Efficiency and Reform Group). This earlier guidance had set out in great detail the procedures for procuring public projects, including definitions of roles, gateway review processes, and guidance for key tasks. OGC guidance has long since been archived.

The Government Construction Strategy stated that the right model for public sector construction procurement in the UK is one in which:

Clients issue a brief that concentrates on required performance and outcome;
Designers and constructors work together to develop an integrated solution that best meets the required outcome;
Contractors engage key members of their supply chain in the design process where their contribution creates value;
Value for money and competitive tension are maintained by effective price benchmarking and cost targeting, by knowing what projects should cost, rather than through lump sum tenders based on inadequate documentation;
Supply chains are, where the programme is suited, engaged on a serial order basis of sufficient scale and duration to incentivise research and innovation around a standardised (or mass customised) product;
Industry is provided with sufficient visibility of the forward programme to make informed choices (at its own risk) about where to invest in products, services, technology and skills; and
There is an alignment of interest between those who design and construct a facility and those who subsequently occupy and manage it.

These principles were carried forward, in updated form, into the Construction Playbook, first published in December 2020 and refreshed in September 2022. The Playbook is now the primary government guidance on how public works projects and programmes should be assessed, procured and managed, and endorses the Gold Standard (Mosey Review) recommendations for construction frameworks and contracts. The Common Minimum Standards referred to in the original strategy have effectively been superseded by the Playbook's twelve key policies.

[edit] Procurement route

The Government Construction Strategy suggested that “procurement is best looked at as part of a broader asset life cycle, rather than as a stand-alone process,” and that it is therefore part of a system that commences at the inception stage of a project and is concluded only when the facility has been brought into use with proper arrangements made for asset management.

Whilst the strategy did not itself propose which procurement routes should be adopted, the Common Minimum Standards referred to in the strategy stated that “procurement routes should be limited to those which support integrated team working (PPP/PFI, Design & Build, the Prime-type Contracting approach and framework arrangements consistent with the Construction Strategy).”

It stated that “traditional, non-integrated procurement approaches should not be used unless it can be clearly shown that they offer best value for money – this means, in practice they will seldom be used.”

PFI has since been widely discredited due to a perceived lack of value for money, and neither PFI nor its successor, PF2 (itself discontinued in 2018), is used on new public projects. The Construction Playbook and the National Procurement Policy Statement now set out the preferred delivery models, with an emphasis on outcome-based specifications, longer-term portfolios and early contractor involvement rather than a fixed list of routes.

[edit] Contracts

Early supply chain involvement should be sought by inviting tenders from integrated supply teams on the basis of an output-based specification, with procurement streamlined through a standardised pre-qualification process. PAS 91 remains in use for this purpose, and since Procurement Policy Note PPN 03/23 the Common Assessment Standard (CAS) has also been recognised as an accepted form of pre-qualification questionnaire for public works contracts, alongside PAS 91.

Standard forms of contract are recommended in preference to bespoke drafting; GC Works contracts are no longer updated and have not been in general use for some years, and the New Engineering Contract (NEC) suite remains the government's preferred form. The current edition, NEC4, was published in 2017 and has superseded NEC3 for new contracts.

Incentivisation and competitive tension should be introduced through procurement routes other than lump-sum tendering, to encourage innovation, supply chain integration and to align the interests of designers and contractors with occupants and operators. Standardisation and off-site fabrication (modern methods of construction) continue to be encouraged where appropriate, and are now a specific theme of the Construction Playbook.

NB: In December 2013, measures were announced to make it easier for small businesses to win public contracts, including abolishing pre-qualification questionnaires for low-value contracts and mandating the use of core PQQs for high-value contracts. The Procurement Act 2023 carries this principle forward through a simplified, “light touch” regime for procurements below the relevant thresholds, which are reviewed periodically by the Cabinet Office.

[edit] Building Information Modelling

The Government Construction Strategy proposed the phased roll-out of Building Information Modelling (BIM), resulting in a requirement for fully-collaborative 3D BIM (BIM Level 2) on centrally-procured construction contracts from 2016. This requirement, and the PAS 1192 suite of standards that underpinned it, has since been superseded by the international ISO 19650 series, implemented in the UK through the UK BIM Framework. Public contracts now generally require compliance with ISO 19650 rather than the earlier Level 2 documents.

[edit] Major projects

The Infrastructure and Projects Authority (IPA) was formed in January 2016 from the merger of the Cabinet Office's Major Projects Authority and HM Treasury's Infrastructure UK. In April 2025, the IPA was itself combined with the National Infrastructure Commission to form the National Infrastructure and Service Transformation Authority (NISTA), jointly sponsored by the Cabinet Office and HM Treasury, which now leads on the assurance and delivery of the government's major projects and infrastructure programme.

A project is generally treated as a government major project if it meets criteria such as:

It requires HM Treasury approval;
It could lead to a breach in departmental expenditure limits;
It involves significant levels of unplanned spending; or
It could set an expensive precedent.

There are around 200 projects on the government's major projects portfolio at any one time. Procedures set out by NISTA (previously the IPA, and before that the Major Projects Authority) are mandatory for projects on the portfolio and focus on a series of reviews and approvals at key stages of a project's development. The Treasury Approval Point process reviews projects outside a department's delegated authority but below the level requiring wider scrutiny.

See Major projects authority MPA and Infrastructure and Projects Authority for more information.

[edit] Payment

Prompt payment through the supply chain remains a legal requirement. Public bodies in England must include 30-day payment clauses in supply chain contracts, a requirement originally introduced under the Public Contracts Regulations 2015 and carried forward and reinforced under the Procurement Act 2023, which extends reporting obligations on payment performance further down the supply chain and links persistent late payment to the new exclusion and debarment provisions.