Procurement Act 2023: increasing the consequences of anticompetitive activity

Alongside the UK Competition and Markets Authority’s (CMA’s) recent announcement of changes to its merger control review processes based on the concept of “Four Ps” (Pace, Proportionality, Predictability and Process), another ‘P’ took centre stage in the CMA’s draft Annual Plan for 2025-2026: Procurement.

The CMA’s draft Annual Plan for 2025/26 sets out how it intends to support the government’s focus on economic growth. The CMA stated that it will apply a “sharp focus” on public procurement, as the government “pursues essential programmes to improve public services and invest in economic infrastructure.”

The focus on procurement coincides with the entry into force of the Procurement Act 2023 (the Act) on 24 February 2025. The Act changes the rules that shape how public bodies buy goods and services and introduces, for the first time in the UK’s procurement rules, the risk of exclusion from participation in public tender opportunities for companies found to have breached competition law.

In this briefing we look at the CMA’s increasing focus on procurement, the new competition law ground for exclusion from public tender opportunities, and what businesses can be doing to mitigate the risks of exclusion.

Why is the CMA focused on procurement?

The CMA estimates that procurement accounts for one third of all public expenditure. In a speech at the end of 2024, the CMA’s interim Executive Director for Competition Enforcement highlighted that procurement is a potential hotspot for anti-competitive behaviour, with UK public funds frequently allocated to sectors widely recognised as ‘high risk’ for anticompetitive activity, such as construction.

The CMA’s recent enforcement activity supports these concerns: in 2023, it fined 10 construction firms nearly £60 million for bid-rigging in public and private contracts and recently launched an investigation into suspected bid rigging between contractors competing to win tenders in relation to the Department for Education’s Condition Improvement Fund.

It is therefore perhaps no surprise that the CMA is doubling down on its efforts to safeguard the public purse by announcing procurement as a key focus in its draft Annual Plan. The CMA stated that it will deploy AI capabilities to assist national and regional public sector organisations to identify bidding anomalies and detect potential anticompetitive conduct.

Alongside the CMA’s detection and enforcement initiatives, the Act introduces new sanctions for businesses found to have breached competition law.  

The Procurement Act 2023: what are the new consequences for anticompetitive conduct?

As with the Public Contract Regulations 2015 (PCRs), under the Act, suppliers still risk being excluded from public tender processes through ‘mandatory’ and ‘discretionary’ exclusion criteria. However, under the Act, infringements of competition law are for the first time grounds for both mandatory and discretionary exclusion. 

The mandatory exclusion ground will apply where a supplier is found by the CMA to have engaged in “cartel” conduct (such as bid-rigging, price fixing or market sharing with competitors).

The discretionary ground captures most other breaches of competition law by a supplier in the UK, and, notably, in any other jurisdiction (i.e. the Act has extra-territorial reach). This discretionary ground also gives the contracting authority the power to determine that the supplier has breached competition law in the UK or abroad. The CMA has indicated that it will assist contracting authorities with the exercise of this power, including by providing information on both concluded and ongoing investigations.

Should either the mandatory or discretionary ground apply, the supplier may be deemed an “excluded” or “excludable” supplier (respectively), and could be placed on the new central disbarment list for up to 5 years. However, when determining whether the mandatory or discretionary grounds for exclusion should apply to the supplier, the contracting authority must allow the supplier to provide evidence of ‘self-cleaning’, that is, evidence that the circumstances giving rise to the applicable exclusion ground have ceased or are not likely to occur again. This includes, for example, evidence that the supplier has taken the circumstances seriously, such as by paying compensation, or evidence that the supplier has procedures and training in place. 

Importantly, a supplier may even find itself “excluded” or “excludable” by virtue of an exclusion ground applying to an “associated person” (being a person that the supplier is relying on to satisfy the conditions of participation of a tender opportunity). Any competition law breaches by an associated person, such as a subcontractor, could therefore have serious consequences for supplier. Notably, in this situation, the supplier would be required to provide evidence of the sub-contractor’s (or other associated party’s) self-cleaning to avoid potential exclusion.

What competition compliance steps can suppliers take to mitigate their exposure to risk?

The risk presented by “associated persons” satisfying the exclusion grounds means suppliers should consider whether their own supply chain is complying with competition law, for example by undertaking enhanced due diligence or compliance checks on its sub-contractors from a competition law compliance perspective. 

Within the supplier’s own business, anticompetitive conduct and practices can occur at all levels.  Understanding where competition risks arise in the supplier’s day to day business dealings and taking steps to remain compliant with the competition rules are therefore an important “first line of defence” in avoiding exclusion or debarment.  For this reason, competition law compliance policies should be robust, tailored to the risks faced by the business, regularly reviewed and updated, and implemented through training. By taking these steps, suppliers can create a firm-wide awareness of competition law. This – when coupled with a top-down culture of compliance, demonstrated by commitment from the Board – can help to mitigate the risk that the supplier engages in anticompetitive conduct in the first place; or, for any supplier at risk of exclusion, could be an important step in the process of ‘self-cleaning’.  

If a supplier discovers that it has been involved in cartel activity, it may also avoid exclusion or disbarment by admitting wrongdoing and being the first to apply for leniency from the CMA under the CMA’s leniency policy. 

Mills & Reeve’s competition experts can help suppliers understand these issues and how they apply to organisations’ businesses; please get in touch if you have any questions. 

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