Procurement Act 2023

2 Contracting authorities U.K.

(1) In this Act “contracting authority” means—

(a) a public authority, or

(b) in the case of a utilities contract, a public authority, public undertaking or private utility,

other than an excluded authority.

(2) In this Act—

• “public authority” means a person that is—

  (a)

  wholly or mainly funded out of public funds, or

  (b)

  subject to public authority oversight,

  and does not operate on a commercial basis (but see subsections (9) and (10));

• “public undertaking” means a person that—

  (a)

  is subject to public authority oversight, and

  (b)

  operates on a commercial basis;

• “private utility” means a person that—

  (a)

  is not a public authority or public undertaking, and

  (b)

  carries out a utility activity.

(3) A person is subject to public authority oversight if the person is subject to the management or control of—

(a) one or more public authorities, or

(b) a board more than half of the members of which are appointed by one or more public authorities.

(4) The following are examples of factors to be taken into account in determining whether a person operates on a commercial basis—

(a) whether the person operates on the basis that its losses would be borne, or its continued operation secured, by a public authority (whether directly or indirectly);

(b) whether the person contracts on terms more favourable than those that might reasonably have been available to it had it not been associated with a public authority;

(c) whether the person operates on a market that is subject to fair and effective competition.

(5) The following authorities are excluded authorities—

(a) a devolved Scottish authority [F1 , except where a devolved Scottish authority carries out procurement falling within section 115A];

(b) the Security Service, the Secret Intelligence Service and the Government Communications Headquarters;

(c) the Advanced Research and Invention Agency;

(d) any person that is subject to public authority oversight—

(i) only by reference to a devolved Scottish authority, or

(ii) by reference to an authority mentioned in paragraph (b) or (c).

(6) An authority is a “devolved Scottish authority” if its functions are exercisable only in or as regards Scotland, and—

(a) none of its functions relate to reserved matters, or

(b) some of its functions relate to reserved matters and some do not.

(7) A contracting authority that is a public undertaking or private utility is to be treated as a devolved Scottish authority for the purposes of this Act if it operates only in or as regards Scotland, and—

(a) none of its activities relate to reserved matters, or

(b) some of its activities relate to reserved matters and some do not.

(8) In this Act, a reference to a devolved Scottish authority includes a reference to an authority that is to be treated as a devolved Scottish authority for the purposes of this Act.

(9) In this Act, a reference to a public authority includes a reference to the Common Council of the City of London.

(10) For the purposes of this Act, a person that operates on a commercial basis but is, as a controlled person, awarded an exempted contract by a public authority in reliance on paragraph 2 of Schedule 2 (vertical arrangements) is to be treated as a public authority in relation to any relevant sub-contract.

(11) This Act does not apply to His Majesty acting in his private capacity.

(12) In this section—

• “relevant sub-contract” means a contract substantially for the purpose of performing (or contributing to the performance of) all or any part of the exempted contract;

• “reserved matters” has the same meaning as in the Scotland Act 1998.

Textual Amendments

F1 Words in s. 2(5)(a) inserted (24.2.2025) by The Procurement Regulations 2024 (S.I. 2024/692), regs. 1(2), 47(2); S.I. 2024/716, Sch. (as amended by S.I. 2024/959, regs. 1(2), 2(7)(a))

Modifications etc. (not altering text)

C1 S. 2 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. 2 not in force at Royal Assent, see s. 127(2)

I2 S. 2 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))