Conflicts of interest under the Procurement Act 2023: the official guidance, explained

The key facts

• The guidance applies to covered procurements under the Procurement Act 2023 and supports the integrity objective in section 12(1)(d).
• Section 81(1) requires contracting authorities to take all reasonable steps to identify, and keep under review, conflicts of interest and potential conflicts.
• An interest under section 81(4) includes a personal, professional or financial interest that may be direct or indirect, and section 81(2)(b) brings Ministers acting in relation to the procurement within scope.
• Section 82 requires all reasonable steps so that a conflict does not put a supplier at an unfair advantage or disadvantage, and section 82(2) allows the authority to require a supplier to take mitigating steps.
• Where unfair advantage cannot be avoided, or a supplier refuses required steps, sections 82(3) and (4) mean the supplier must be treated as an excluded supplier under section 19 and cannot participate or progress.
• Section 83(1) requires a conflicts assessment to be prepared before publishing a tender notice, a transparency notice or a dynamic market notice relating to the establishment of a dynamic market.
• Section 83(8) requires confirmation that an assessment has been prepared or revised when publishing a tender notice, transparency notice, dynamic market notice, contract details notice or contract change notice. The assessment itself is not published.
• The conflicts of interest provisions in the Act do not apply to below threshold procurements, though the guidance recommends a proportionate approach.

What the guidance is and who it applies to

Guidance: Conflicts of Interest is the Cabinet Office document in the Procurement Act 2023 guidance suite for the define phase. It explains the statutory provisions and advises contracting authorities on how to comply. It applies to covered procurements and sits alongside the duty to act with integrity in the procurement objectives at section 12(1)(d).

A conflict of interest is defined as a conflict between the interests of a person acting in relation to a procurement and those of the procurement itself. A potential conflict is where a conflict will arise if certain future events occur, for example where a spouse's employer acquires a company that has submitted a tender. A perceived conflict is circumstances the authority considers likely to cause a reasonable person to wrongly believe a conflict exists.

The people to be considered are those acting for or on behalf of the contracting authority in relation to the procurement, and, under section 81(2)(b), Ministers acting in relation to it. The examples given span the whole delivery chain: senior responsible officers, budget holders, commercial directors, board members, tender assessors, external experts, consultants and special advisers. Where conflicts are not identified and effectively mitigated, the guidance warns, the consequences can be far reaching, including accusations of fraud, bribery and corruption, legal challenges and loss of public confidence.

Identifying conflicts: the duty under section 81

Section 81(1) requires contracting authorities to take all reasonable steps to identify, and keep under review, any conflicts of interest or potential conflicts of interest. The duty is one of reasonable steps rather than a guarantee of a perfect result, and it is continuous: identification is not a single event at the start of a procurement.

The definition of interest at section 81(4) is broad. It includes a personal, professional or financial interest, direct or indirect. The indirect interest is the one teams most often miss: a family member's employment, a shareholding held through another vehicle, or a former colleague now working for a bidder.

The Act does not prescribe the exact steps. Approaches authorities may use include requiring conflicts declarations specific to the procurement, reviewing pre existing declarations already held, checking public registers, noted as particularly relevant for Ministers, and confirming with individuals and teams whether relevant interests exist. Because the method is left open, the burden falls on the authority to show that what it chose was reasonable for that procurement.

Mitigating conflicts and excluding suppliers: section 82

Section 82 requires contracting authorities to take all reasonable steps to ensure that a conflict of interest does not put a supplier at an unfair advantage or disadvantage. The test is about effect on competition, not simply whether someone declared something: a declared conflict left unmanaged still breaches the duty if it distorts the field.

Mitigation examples given include reassigning personnel, using multiple tender assessors rather than one individual, including independent observers, ensuring management oversight, sharing information with all suppliers in a timely way, and, where nothing else works, cancelling and rerunning the procurement.

Section 82(2) allows the authority to require a supplier to take reasonable steps to mitigate a conflict. Under sections 82(3) and (4), if the unfair advantage cannot be avoided, or the supplier refuses those steps, the supplier must be treated as an excluded supplier under section 19 and must not be allowed to participate or progress in a competitive tendering procedure. That has direct commercial consequences for a bidder, so the reasoning needs to be recorded at the time.

The conflicts assessment and the notice requirements: section 83

Section 83(1) requires a conflicts assessment to be prepared before publishing a tender notice or transparency notice, or a dynamic market notice relating to the establishment of a dynamic market. It is a gate on publication, not a document produced at the end for the file.

Section 83(3) sets out the contents: details of the conflicts or potential conflicts identified, and any steps taken, or to be taken, to mitigate them. Section 83(4) also requires steps taken on perceived conflicts to be recorded, to demonstrate that a conflict does not in fact exist. Beyond that minimum, the guidance recommends recording the relevant individuals and teams, how each is relevant, whether a declaration was received, the mitigation applied, and the review dates.

Sections 83(5) and (6) make it a living document: it must be kept under review and revised as necessary until the authority gives notice that the contract will not be awarded, publishes a notice of contract termination, or ceases to operate the dynamic market. Section 83(8) sets the transparency requirement. When publishing a tender notice, a transparency notice, a dynamic market notice, a contract details notice or a contract change notice, the authority must confirm that a conflicts assessment has been prepared and revised as required. The assessment itself is not published, so the underlying record is what would be tested in a challenge or an audit.

Below threshold procurements and practical application

The conflicts of interest provisions in the Act do not apply to below threshold procurements, but the guidance does not treat that as a reason to ignore the subject. The underlying principles remain relevant and authorities should take a proportionate approach, since individuals remain personally liable for fraud, bribery, corruption and misconduct in public office regardless of contract value.

Turning the duties into routine practice means three things: a declaration step specific to each covered procurement that captures indirect interests as well as direct ones, a single conflicts assessment record per procurement carrying roles, declarations, mitigation and dated review entries, and a check built into publication so no tender, transparency or dynamic market notice goes out before the assessment exists. Because section 83 ties preparation to publication and requires review until a defined end point, the dates are part of the compliance.

How eSourcing Data helps

In operational terms, sections 81 to 83 are a record keeping and workflow problem. eSourcing Data holds each procurement as a single structured record, so declarations, the conflicts assessment, mitigation decisions and dated review entries live alongside the tender documents, the evaluation and the award. When an assessment has to be produced for audit or challenge, it is retrieved rather than reconstructed.

Because section 83 makes the assessment a precondition of publishing, the check can sit where the notices are prepared, so the confirmation required by section 83(8) is made against a record that exists. The same applies at contract details and contract change notice stage, where the obligation recurs later in the contract life.

On mitigation, evaluation in the platform supports the measures the guidance describes: multiple assessors rather than a single scorer, clear allocation of who scored what, and a timestamped moderation trail. Supplier records and communications are held centrally so information can be shared with all bidders at once, and where a supplier is treated as excluded under section 19 the reasoning sits in the same file.

What to do about it

1. 1Add a procurement specific conflicts declaration step to every covered procurement, covering direct and indirect interests as defined at section 81(4), and scope it to everyone acting for the authority including any Minister.
2. 2Prepare the conflicts assessment before publishing the tender notice, transparency notice or dynamic market notice, and record the date it was prepared.
3. 3Record for each identified conflict the mitigation taken or planned, and for perceived conflicts record the steps that demonstrate no conflict exists.
4. 4Set review triggers so the assessment is revised when evaluators change, when the bidder list is known and when supplier ownership changes, and continue until non award, termination or cessation of the dynamic market.
5. 5Build the section 83(8) confirmation into your notice publication checklist for tender, transparency, dynamic market, contract details and contract change notices.
6. 6Agree in advance how you will document a decision to treat a supplier as excluded under section 19 where a conflict cannot be mitigated or the supplier refuses required steps.
7. 7Apply a proportionate version of the same discipline below threshold, even though the Act's conflicts provisions do not apply there.