Covered procurement under the Procurement Act 2023: what the term means and why it matters

The key facts

• Covered procurement means the award, entry into and management of a public contract.
• A public contract is a contract entered into by a contracting authority with a value above the relevant threshold that is not exempted by Schedule 2 of the Act.
• Having a defined term helps authorities understand exactly which provisions apply to above threshold, non exempted procurement.
• The Act also includes a wider definition of procurement, covering the award, entry into and management of a contract generally, including below threshold and exempted contracts.
• That wider definition lets the Act make separate and limited provision for particular requirements attaching to certain below threshold procurements.
• It also supports non discrimination obligations for treaty state suppliers, to satisfy international obligations that apply to below threshold or exempted procurement.
• The duty to have regard to the national procurement policy statement at section 13 is another provision that sits under the wider definition.
• The legal framework is section 1 and section 11 of the Act.

What this guidance is and who it applies to

This guidance document explains one of the most load bearing terms in the Procurement Act 2023. It is part of the technical guidance series published to help with interpretation and understanding of the Act, and like the rest of the series it is aimed at procurement practitioners and commercial policy leads in contracting authorities.

The guidance is meant to be read in conjunction with the Act and its associated regulations rather than in place of them. The definitions themselves sit in section 1 and section 11.

Anyone who runs or advises on public procurement needs this term. It is the switch that decides how much of the Act applies to a given contract, and getting it wrong in either direction is costly: apply the full regime where it is not required and you slow yourself down, miss it where it is required and you expose the award to challenge.

What covered procurement means

The guidance gives a compact definition. Covered procurement means the award, entry into and management of a public contract. Note that it is not limited to the tendering stage. Entry into the contract and its subsequent management are inside the definition too, which is why obligations under the Act continue well past the award decision.

A public contract is then defined by three tests taken together. It must be a contract entered into by a contracting authority. It must have a value above the relevant threshold. And it must not be exempted by Schedule 2 of the Act. Fail any one of those and the contract is not a public contract, and therefore the procurement is not a covered procurement.

The guidance is explicit about why the term exists at all. Having a defined term helps contracting authorities understand exactly what provisions apply to above threshold, non exempted procurement. It is a labelling device that saves the legislation from repeating the same three tests every time it wants to attach a rule to the main regime.

The wider definition of procurement, and what it carries

The Act does not stop at covered procurement. It also includes a wider definition of procurement, meaning the award, entry into and management of a contract. That wider term takes in public contracts but also below threshold and exempted contracts. In other words, some parts of the Act reach contracts that sit outside the main regime.

The guidance names three examples of what that wider reach is used for. The first is particular requirements for certain below threshold procurements. Being under the threshold does not put a contract entirely beyond the Act.

The second is non discrimination obligations with respect to treaty state suppliers, which exist to satisfy international obligations on public procurement that apply to below threshold or exempted procurement. The third is the duty to have regard to the national procurement policy statement at section 13. That duty is deliberately placed on the wider definition so that the government's stated policy priorities are not confined to the largest contracts.

Applying it in practice

The practical discipline is to run the three tests in order at the start of every procurement and record the answer. Is the buyer a contracting authority, is the value above the relevant threshold, and does any Schedule 2 exemption apply. Once those are answered you know which regime you are in, and everything downstream follows from that.

Valuation deserves particular care, because the threshold test turns on it. The guidance points readers to the thresholds material and, for the surrounding questions, to the guidance on exempted contracts and contracting authorities. Those three documents together answer the in scope question far better than any of them does alone.

The second discipline is not to assume that being outside covered procurement means being outside the Act. Below threshold and exempted contracts still attract obligations, including the treaty state supplier duties and the duty to have regard to the national procurement policy statement. Teams that maintain a separate low value process should check that it carries those obligations rather than treating below threshold as unregulated.

How eSourcing Data helps

The covered procurement test is a routing decision, and routing decisions are exactly what a procurement platform should automate. eSourcing Data captures the value, the buying entity and the exemption assessment at the point a requirement is raised, then routes the exercise down the appropriate workflow so that above threshold procurements pick up the full set of steps and notices while lower value work follows a proportionate route.

Because the definition covers the award, entry into and management of a public contract, the obligations do not stop at contract signature. eSourcing Data carries the record through into contract management, keeping the same audit trail across the whole life of the contract rather than handing off to a separate system that loses the procurement history.

For below threshold and exempted activity, the platform still provides structured workflows, supplier records and reporting. That matters because the Act reaches those contracts for specific purposes, including the treaty state supplier obligations and the duty to have regard to the national procurement policy statement, and an organisation needs evidence it met them even where the full regime did not apply.

What to do about it

1. 1Build the three part public contract test into your start of procurement checklist: contracting authority, above threshold value, not exempted by Schedule 2.
2. 2Record the valuation basis for each procurement so the threshold decision can be evidenced later.
3. 3Check Schedule 2 explicitly rather than assuming no exemption applies.
4. 4Review your below threshold process to confirm it carries the obligations the Act places on procurement generally.
5. 5Make sure treaty state supplier non discrimination obligations are reflected in low value and exempted routes as well as the main one.
6. 6Confirm your process records how the duty to have regard to the national procurement policy statement under section 13 was met.
7. 7Read the thresholds, exempted contracts and contracting authorities guidance alongside this document.