Who counts as a contracting authority under the Procurement Act 2023: the official guidance, explained

The key facts

• Contracting authority is the term used for an entity that is subject to the Procurement Act 2023.
• The Act refers to a contracting authority as a person, so that the definition works across a variety of legal forms and circumstances.
• A legal definition is essential so that entities can determine whether they are in scope of the rules or not.
• The relevant legal framework for the definition is section 2 of the Act.
• The guidance on exempted contracts is relevant to this area, in particular for information relating to vertical arrangements.
• The guidance on utilities is also flagged as relevant reading alongside the definition.
• The guidance documents are technical, and are aimed at procurement practitioners and commercial policy leads in contracting authorities.
• The guidance should be read alongside the Procurement Act 2023 itself and its associated regulations.

What this guidance is and who it applies to

This is one of the Cabinet Office guidance documents published to support the Procurement Act 2023. It deals with a single but foundational question: what is a contracting authority. The guidance is explicitly technical. It exists to help with interpretation and understanding of the Act, and it is written for procurement practitioners and commercial policy leads working inside contracting authorities rather than for a general audience.

The guidance is not a substitute for the legislation. It says plainly that the guidance documents should be read in conjunction with the Procurement Act 2023 and its associated regulations. Where the two appear to diverge, the Act and the regulations govern. The guidance is there to help you apply them consistently.

The audience is broader in practice than the guidance suggests. Suppliers, funders and legal advisers all need to know whether a given body is a contracting authority, because that determines whether the Act's procedural rules, notice obligations and remedies apply to the way that body buys.

What the definition actually does

The guidance explains that contracting authority is the term used to refer to an entity that is subject to the Act. The Act itself uses the word person rather than entity or organisation. That drafting choice is deliberate: it ensures the definition applies across a variety of circumstances rather than being tied to one legal form. Public bodies come in many shapes, from departments and local authorities to companies, trusts, joint ventures and statutory corporations, and the definition has to reach all of them that should be in scope.

The reason a legal definition matters so much is set out directly in the guidance: it is essential in order for entities to determine whether they are in scope of the rules, or not. Everything else in the regime follows from that single determination. If you are a contracting authority carrying out a covered procurement, you are subject to the objectives, the competitive tendering procedures, the notice regime and the transparency obligations. If you are not, none of that machinery applies to you in the same way.

The legal framework for the definition sits in section 2 of the Act. Practitioners assessing borderline cases should work from that section, using the guidance as an aid to interpretation rather than as the source of the test itself.

The connected questions the guidance points you to

The guidance flags two other areas as relevant reading. The first is the guidance on exempted contracts, specifically for information relating to vertical arrangements. Vertical arrangements are the relationships between public bodies and the entities they control, and whether such an arrangement falls inside or outside the Act's rules is a recurring source of difficulty. The status question and the exemption question are often argued together, so it is sensible to read both documents at once.

The second is the guidance on utilities. Utilities operate under a distinct set of provisions, and an entity may be within scope for some activities and treated differently for others. Reading the utilities guidance alongside the definition helps entities that sit near that boundary avoid applying the wrong rule set to the wrong contract.

Taken together, the message is that status is rarely a single yes or no answer that can be settled in isolation. It is the first step in a short chain of questions: are you a contracting authority, is this a public contract, and is it exempted.

Applying it in practice

The practical advice is to settle the status question once, in writing, and then reuse that determination rather than re litigating it on every procurement. Bodies that have never formally recorded why they consider themselves in or out of scope tend to discover the gap at the worst possible moment, usually when a supplier challenges a process or an auditor asks for the basis of a decision.

Where a group of entities sits under one parent, the assessment needs to be made for each entity rather than for the group as a whole. Subsidiaries, trading companies and joint ventures can reach different answers from their parent. The same applies where new bodies are created: status should be assessed at the point of incorporation, not the point of first procurement.

The guidance also carries a short but firm instruction that applies to every document in the series: make sure you read the guidance documents in full. Working from summaries, including this one, is a starting point rather than a substitute.

How eSourcing Data helps

Once an organisation has established that it is a contracting authority, the practical consequence is a long list of process and transparency obligations that have to be met consistently across every team that buys. eSourcing Data gives those teams a single controlled environment for running procurements, so the rules that follow from in scope status are applied the same way each time rather than depending on which officer happens to run the exercise.

The platform keeps a complete audit trail of each procurement, from the initial requirement through to award and contract management. When an entity has to demonstrate that it applied the correct regime, or explain to an auditor or a challenger why a particular route was chosen, that evidence is already captured rather than reconstructed after the event.

For groups with several entities, eSourcing Data supports separate workspaces and reporting so that each body's activity can be seen and reported on in its own right, while shared templates and supplier records keep effort down. That matters where status differs across the group and a single blended process would risk applying the wrong rules to the wrong contract.

What to do about it

1. 1Record a written determination of whether your organisation is a contracting authority, referencing section 2 of the Act.
2. 2Repeat that assessment for every subsidiary, trading company and joint venture rather than assuming the group position applies.
3. 3Read the exempted contracts guidance alongside the definition, particularly the material on vertical arrangements.
4. 4Read the utilities guidance if any part of your activity sits near the utilities boundary.
5. 5Store the determination somewhere procurement officers can find it, so nobody has to guess at the start of a process.
6. 6Review the determination whenever a new entity is created or an existing one changes its legal form or control arrangements.
7. 7Read the full guidance documents rather than relying on summaries when assessing a borderline case.