Defence Procurement in the UK – Application of the Procurement Act 2023
The Procurement Act 2023 (the PA23) governs the procurement of defence and security contracts and introduces specific flexibilities for the award of these contracts.
The PA23 replaces the Defence and Security Public Contracts Regulations 2011 (the DSPCR), which had implemented in the UK the EU’s defence procurement directive (Directive 2009/81/EC). The PA23 also provides for changes to the separate Single Source Contracts Regulations 2014 (the SSCR).
The PA23 and amended SSCR provide the legal framework for the award of defence contracts in the UK.
The reforms introduced by the PA23 will be key to the delivery of the UK Government’s ambitions for increasing the scale and pace of defence procurement. These ambitions have been set out following the UK Government’s recent Strategic Defence Review (the SDR) and adoption of a new Defence Industrial Strategy.
Key Changes
The PA23 introduces a number of key changes to be aware of, including new provisions regarding transparency requirements, exclusion and debarment, and rules governing debriefing and standstill. The new regime has also broadened the scope of what is classed as a “defence and security contract”.
Defence suppliers should also be aware of new grounds for direct award of contracts (i.e., awards without any form of open competitive tendering) including:
- for contracts for supply of air or maritime transport services regarding armed forces or security services’ deployment outside the UK; and
- where necessary to enhance or maintain the operational capability, effectiveness, readiness for action, safety or security of the armed forces.
Lastly, the PA23 makes provision for significant reforms to the SSCRs. The key changes aim to provide more choice and flexibility both for the procuring bodies and contractors, to speed up and simplify the application of the framework, and to stimulate innovation. This includes the introduction of alternative pricing mechanisms, enabling componentisation of contracts, and simplifying processes for calculating profit rates.
How can CMS help?
The aerospace and defence sectors are at the forefront of technological innovation, international commerce and national security. At CMS, we provide comprehensive legal support to clients operating in these industries, whether they are established market leaders or emerging innovators.
Often working as part multidisciplinary teams, we advise on all aspects of defence procurement, defence contracting and related regulatory aspects around export controls, sanctions, national security, antitrust and FDI rules, intellectual property, cybersecurity and evolving international trade laws in this sector.
