Procurement Act 2023: Poor Contractor Performance Goes Public
The Procurement Act 2023 has introduced a significant change in how public sector contractors are held accountable for their performance. From January 2026, contracting authorities became subject to new requirements to publish information about certain serious breaches of contract and failures to improve performance. Previously, many contractual disputes, supplier failures and negotiated settlements could remain largely between the contracting authority and its supplier. That position has fundamentally changed. Under Section 71 of the Procurement Act, a Contract Performance Notice may be required where a contractor breaches its contract, and the breach results in partial termination, an award of damages or a settlement agreement. A notice is also required where a supplier has been given a proper opportunity to improve unsatisfactory performance but fails to do so.
What does this mean for contractors?
Consider a facilities management contractor delivering maintenance services to a local authority. Repeated failures to complete emergency repairs result in complaints, operational disruption and financial losses. The authority implements a formal improvement process, but the contractor fails to deliver the required improvements.
Under the new regime, this could result in a published Contract Performance Notice identifying the supplier and the nature of the performance failure. The consequences may extend beyond the immediate contract. Other public authorities can access the information when considering future procurement decisions. Importantly, these reporting obligations are not confined to contracts exceeding £5 million.
Contractors must recognise that poor performance can now create a public record with consequences for future business opportunities. Effective contract management, documented performance reviews, early intervention and corrective action planning are becoming commercially essential.
Our course “Contractors Guide: Contract Performance Management Regime Requirements of the Procurement Act” places particular emphasis on understanding the new requirements imposed by the Act and how to ensure that contractors are able to respond to these challenges.
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