The Procurement Act 2023 repeals the current set of rules governing utilities procurement in the UK. Other than for utilities operating solely in Scotland and not in reserved areas, all UK utilities procurement will now be governed by the new regime. This new regime enters into force from 28 October 2024.
Key issues to be aware of include the extent of coverage of the new regime to both public and private sector utilities, new provisions regarding forms of notices, new award procedures (including the use of frameworks and dynamic marketplaces), expanded exclusion and debarment rules and new rules governing debriefing and standstill.
Coverage and scope
The Act repeals the Utilities Contracts Regulations 2016 (UCRs). Once the Act enters into force later this year, the new regime will apply to the procurement of a ‘utilities contract’, which is defined as a contract that relates to a ‘utility activity’.
A ‘utility activity’ is defined broadly to reflect the current position under the UCRs. Part 1 of Schedule 4 of the Act sets out a list of activities that are deemed utility activities. These largely replicate the activities under the UCRs. Part 2 then goes on to list certain activities within that list that are excluded, effectively reflecting the exclusions as recognised currently by the European Commission under the EU Utilities Directive 2014/25/EU.
The activities listed in Part 1 of Schedule 4 are the following:
- Gas and heat;
- Electricity;
- Water;
- Transport;
- Ports and airports;
- Extraction of oil and gas and exploration for, or extraction of, coal or other solid fuels.
Part 2 of Schedule 4 then applies the existing exclusions covering:
- Electricity generation and production in England, Scotland or Wales;
- Wholesale or retail sale (supply) of electricity in England, Scotland or Wales;
- Wholesale or retail sale (supply) of gas in England, Scotland or Wales;
- Exploration for or production of oil or natural gas in England, Scotland or Wales;
- Development of infrastructure for the production of oil or natural gas in England, Scotland or Wales.
Accordingly, in the energy sector the rules continue to apply largely to the incumbent energy network businesses and the rules do not apply at all to upstream oil and gas activities in Great Britain.
Coverage of the other utilities activities also remains largely unchanged. Heat networks that are connected to the main energy networks are also caught unless the supply to the network is ancillary to the main purpose of the heat network (with threshold tests set out in the Act and to be elaborated on in secondary legislation). The application to the water sector is also largely unchanged, though perhaps with more scope for exemptions to be applied. As a result of certain rules on transport not being carried over as retained EU law, the Act appears to provide for a more ‘open-ended’ list of transport services. Whilst the Act refers to the activity of the provision or operation of a network for the provision of public transport services by rail, tram and bus, it also refers to ‘other means’ of public transport.
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