Procurement Act 2023

Terminating public contracts U.K.

78 Implied right to terminate public contracts U.K.

(1) It is an implied term of every public contract that the contract can, if a termination ground applies, be terminated by the contracting authority in accordance with this section.

(2) Each of the following circumstances is a termination ground—

(a) the contracting authority considers that the contract was awarded or modified in material breach of this Act or regulations made under it;

(b) a supplier has, since the award of the contract, become an excluded supplier or excludable supplier (including by reference to an associated person);

(c) a supplier (other than an associated person) to which the supplier is sub-contracting the performance of all or part of the public contract is an excluded or excludable supplier.

(3) The termination ground in subsection (2)(c) is not available unless—

(a) the contracting authority requested information under section 28(1)(a) (information about sub-contractors) in relation to the award of the public contract, and

(b) subsection (4), (5) or (6) applies.

(4) This subsection applies if, before awarding the public contract, the contracting authority did not know the supplier intended to sub-contract the performance of all or part of the contract.

(5) This subsection applies if—

(a) the sub-contractor is an excluded or excludable supplier under section 57(1)(b) or (2)(b) (the debarment list), and

(b) before awarding the contract the contracting authority—

(i) sought to determine whether that was the case in accordance with section 28(1)(b), but

(ii) did not know that it was.

(6) This subsection applies if—

(a) the sub-contractor is an excluded or excludable supplier under section 57(1)(a) or (2)(a),

(b) the contracting authority requested information about the sub-contractor under section 28(2), and

(c) before awarding the contract, the contracting authority did not know that the sub-contractor was an excluded or excludable supplier.

(7) Before terminating a contract by reference to the term implied by subsection (1), a contracting authority must—

(a) notify the supplier of its intention to terminate,

(b) specify which termination ground applies and why the authority has decided to terminate the contract,

(c) give the supplier reasonable opportunity to make representations about—

(i) whether a termination ground applies, and

(ii) the authority’s decision to terminate.

(8) Before terminating a contract by reference to the fact that a supplier to which the supplier is sub-contracting is an excluded or excludable supplier (whether under subsection (2)(b) or (c)), a contracting authority must give the supplier reasonable opportunity to—

(a) cease sub-contracting to the excluded or excludable supplier, and

(b) if necessary, find an alternative supplier to which to sub-contract.

(9) A public contract may contain provision about restitution and other matters ancillary to the termination of the contract by reference to the term implied by subsection (1).

(10) But any term purporting to restrict or override the implied term is without effect.

(11) In subsection (2)(b), the reference to a supplier becoming an excludable supplier includes a reference to—

(a) a supplier becoming an excludable supplier on the basis of a discretionary exclusion ground that—

(i) did not apply before award of the contract, or

(ii) applied before award of the contract by reference to different circumstances, and

(b) a contracting authority discovering that, before award of the contract, the supplier was an excludable supplier.

(12) In this section, “material breach” means a breach that the contracting authority considers could reasonably result in a successful legal challenge under Part 9 or otherwise.

Modifications etc. (not altering text)

C1 S. 78 applied (24.2.2025) by S.I. 2013/1582, reg. 6(2), Sch. 2 Pt. 1 (as amended by The Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 (S.I. 2025/163), regs. 1(2), 17 (with reg. 33))

Commencement Information

I1 S. 78 not in force at Royal Assent, see s. 127(2)

I2 S. 78 in force at 24.2.2025 by S.I. 2024/716, Sch. (as amended by S.I. 2024/959, regs. 1(2), 2(7)(a))

79 Terminating public contracts: national security U.K.

(1) A relevant contracting authority may not terminate a contract by reference to the implied term in section 78 on the basis of the discretionary exclusion ground in paragraph 14 of Schedule 7 (threat to national security) unless—

(a) the authority has notified a Minister of the Crown of its intention, and

(b) the Minister considers that—

(i) the supplier or sub-contractor is an excludable supplier by reference to paragraph 14 of Schedule 7, and

(ii) the contract should be terminated.

(2) A relevant contracting authority may not terminate a contract by reference to the implied term in section 78 on the basis of the mandatory exclusion ground in paragraph 35 of Schedule 6 (threat to national security) unless the authority has notified a Minister of the Crown of its intention.

(3) In this section, a “relevant contracting authority” means a contracting authority other than—

(a) a Minister of the Crown or a government department,

(b) the Corporate Officer of the House of Commons, or

(c) the Corporate Officer of the House of Lords.

Modifications etc. (not altering text)

C2 S. 79 applied (24.2.2025) by S.I. 2013/1582, reg. 6(2), Sch. 2 Pt. 1 (as amended by The Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 (S.I. 2025/163), regs. 1(2), 17 (with reg. 33))

Commencement Information

I3 S. 79 not in force at Royal Assent, see s. 127(2)

I4 S. 79 in force at 24.2.2025 by S.I. 2024/716, Sch. (as amended by S.I. 2024/959, regs. 1(2), 2(7)(a))

80 Contract termination notices U.K.

(1) Before the end of the period of 30 days beginning with the day on which a public contract is terminated, a contracting authority must publish a contract termination notice.

(2) A “contract termination notice” is a notice setting out—

(a) that the contract has been terminated, and

(b) any other information specified in regulations under section 95.

(3) In this section, a reference to termination includes a reference to—

(a) discharge,

(b) expiry,

(c) termination by a party,

(d) rescission, or

(e) set aside by court order (whether or not under Part 9).

(4) This section does not apply—

(a) to private utilities, or

(b) in relation to a contract awarded under section 41 by reference to paragraph 15 of Schedule 5 (direct award: user choice contracts).

Commencement Information

I5 S. 80 not in force at Royal Assent, see s. 127(2)

I6 S. 80 in force at 24.2.2025 by S.I. 2024/716, Sch. (as amended by S.I. 2024/959, regs. 1(2), 2(7)(a))