Procurement Act 2023

Section 41

SCHEDULE 5 Direct award justifications

1 This Schedule contains the direct award justifications.

Prototypes and development

2 The public contract concerns the production of a prototype, or supply of other novel goods or services, for the purpose of—

(a) testing the suitability of the goods or services,

(b) researching the viability of producing or supplying the goods or services at scale and developing them for that purpose, or

(c) other research, experiment, study or development.

3 In paragraph 2, “novel goods or services” means goods or services designed or developed at the request of the contracting authority.

Single suppliers

4 The public contract concerns the creation or acquisition of a unique work of art or artistic performance.

5 The following conditions are met in relation to the public contract—

(a) due to a particular supplier having intellectual property rights or other exclusive rights, only that supplier can supply the goods, services or works required, and

(b) there are no reasonable alternatives to those goods, services or works.

6 The following conditions are met in relation to the public contract—

(a) due to an absence of competition for technical reasons, only a particular supplier can supply the goods, services or works required, and

(b) there are no reasonable alternatives to those goods, services or works.

Additional or repeat goods, services or works

7 The public contract concerns the supply of goods, services or works by the existing supplier which are intended as an extension to, or partial replacement of, existing goods, services or works in circumstances where—

(a) a change in supplier would result in the contracting authority receiving goods, services or works that are different from, or incompatible with, the existing goods, services or works, and

(b) the difference or incompatibility would result in disproportionate technical difficulties in operation or maintenance.

8 The public contract concerns the supply of goods, services or works by the existing supplier that are similar to existing goods, services or works where—

(a) the existing goods, services or works were supplied under a public contract that was awarded in accordance with a competitive tendering procedure within the period of five years ending with the day on which the transparency notice is published, and

(b) the tender notice or any tender document in respect of that earlier contract set out—

(i) the contracting authority’s intention to carry out a subsequent procurement of similar goods, services or works in reliance on this direct award justification, and

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

9 In paragraphs 7 and 8—

• “existing goods, services or works” means goods, services or works already supplied, or contracted to be supplied, to the contracting authority;

• “existing supplier” means the supplier that has already supplied, or contracted to supply, the existing goods, services or works.

Commodities

10 The public contract concerns goods purchased on a commodity market.

Advantageous terms on insolvency

11 The award of the public contract to a particular supplier will ensure terms particularly advantageous to the contracting authority due to the fact that a supplier, whether or not the one to whom the contract is to be awarded, is undergoing insolvency proceedings.

12 A supplier is “undergoing insolvency proceedings” if it has—

(a) become bankrupt or, in Scotland, the estate of the supplier has been sequestrated,

(b) become subject to insolvency or winding-up proceedings,

(c) had its assets subject to administration or receivership, including by a liquidator or court,

(d) entered into an arrangement with its creditors,

(e) become subject to a petition or application for any such procedures or arrangements, or

(f) in any jurisdiction, been subject to a procedure or an application that corresponds to any procedure or application mentioned in paragraphs (a) to (e).

Urgency

13 Where—

(a) the goods, services or works to be supplied under the public contract are strictly necessary for reasons of extreme and unavoidable urgency, and

(b) as a result the public contract cannot be awarded on the basis of a competitive tendering procedure.

14 For the purpose of paragraph 13, urgency is unavoidable if it—

(a) is not attributable to any act or omission of the contracting authority, and

(b) could not have been foreseen by the contracting authority.

User choice contracts

15 The public contract is a contract for the supply of user choice services and the conditions in paragraph 17 are met.

16 In paragraph 15, “user choice services” means services—

(a) that are of a kind specified in regulations under section 9 (light touch contracts),

(b) that are supplied for the benefit of a particular individual, and

(c) in respect of which a contracting authority would, in awarding a contract for their supply, be required under an enactment to have regard to the views of the individual, or a person providing care to the individual (their “carer”), in relation to who should supply the services.

17 The conditions are that—

(a) the individual to whom the services are to be supplied or their carer has expressed a preference as to who should supply the services, or the nature of the services to be supplied is such that only one supplier is capable of providing them, and

(b) the contracting authority considers that it is not in the best interests of the individual to award the contract under section 19.

Defence and security

18 The following conditions are met in relation to the public contract—

(a) the contract is a defence and security contract,

(b) the contract relates to the supply of air or maritime transport services to the armed forces or the security services—

(i) while they are deployed outside the United Kingdom, or

(ii) in order for them to be so deployed, and

(c) the nature of the services is such that no reasonable supplier would be able to guarantee that all of the terms that would be contained in a tender submitted for the supply of those services by such a supplier would remain in effect for the period of 10 days beginning with the day of submission.

19 (1) The following conditions are met in relation to the public contract (the “new contract”)—

(a) there is another contract between the contracting authority and the supplier (the “existing contract”),

(b) either of the conditions in sub-paragraphs (2) and (3) is met in relation to the new contract, and

(c) the new contract would, if awarded directly, be a “qualifying defence contract” under section 14(2) of the Defence Reform Act 2014 (regulations relating to qualifying defence contracts).

(2) The condition in this sub-paragraph is met if, treating the new contract as a modification of the existing contract, the new contract would not be a substantial modification of the existing contract within the meaning given in section 74(3).

(3) The condition in this sub-paragraph is met if, treating the new contract as a modification of the existing contract, the new contract would be a modification of the existing contract of a kind described in—

(a) paragraph 4 of Schedule 8 (unforeseeable circumstances), or

(b) paragraph 8 of that Schedule (additional goods, services or works).

20 The following conditions are met in relation to the public contract—

(a) the contract is a defence authority contract,

(b) the contract is not a defence and security contract only by virtue of section 7(1)(g) (or, in the case of a framework, section 7(1)(g) and (2)), and

(c) it is necessary for the contract to be awarded directly in order to enhance or maintain the operational capability, effectiveness, readiness for action, safety or security of the armed forces.