Mixed procurement under the Procurement Act 2023: the official guidance, explained

The key facts

• The guidance is issued under the Procurement Act 2023 and deals with contracts that are not entirely goods, entirely services or entirely works.
• A mixed contract is one comprising a mixture of two or more different categories (goods, services, works) or types (concessions, light touch, defence and security, utilities contracts).
• Section 5 governs mixed contracts that combine above threshold and below threshold elements; section 10 governs contracts that mix special regime elements with general rules elements or with another special regime.
• The central test is reasonable separability. If a mixed contract could reasonably be separated but the authority chooses not to separate it, the contract must be treated as above threshold.
• Reasonable separability is judged on the practical and financial consequences of awarding more than one contract, for example resource demands or value for money impacts.
• Where elements cannot reasonably be separated, Schedule 1 paragraph 4 provides that a contract whose main purpose is works will be a works contract, which determines the applicable threshold.
• Defence and security contracts are given greater discretion: a mixed defence and security contract may keep its special regime status even where separation is possible, provided there are good reasons for procuring the elements together.
• Under Schedule 2 paragraph 1, a contract is only an exempt contract where the goods, services or works that form its main purpose are exempt.
• Mixed contracts under a below threshold framework that contain separable above threshold elements must be treated as an above threshold framework, with section 45 applying to the mixed contracts awarded under it.
• Annex A sets out a visual route through section 5 and Annex B does the same for section 10.

What the guidance covers and who it applies to

The guidance addresses a practical reality of public buying: contracting authorities need to be able to award contracts that are not always 100% goods, 100% services or 100% works. Real requirements bundle things together, so the Procurement Act 2023 contains specific rules for deciding how such a contract should be treated.

It applies to contracting authorities awarding public contracts under the Act. In the language of the guidance, a mixed contract is a contract comprising a mixture of two or more different categories of procurement, meaning goods, services and works, or a mixture of two or more different types, meaning concession contracts, light touch contracts, defence and security contracts and utilities contracts.

Those four types are described as special regime contracts. They sit inside the Act but are subject to different thresholds and, in general, lighter process obligations, which is exactly why the Act needs rules about mixing.

Two provisions do the work. Section 5 determines when a mixed contract is a public contract where it contains both above threshold and below threshold elements. Section 10 deals with contracts of multiple types where one or more elements would be subject to a special regime. Annexes A and B give visual decision routes for the two sections respectively.

Section 5: mixing above threshold and below threshold elements

Section 5 applies where a single contract combines elements of goods, services and works and at least one element sits above its relevant threshold while another sits below. The question the authority must answer is whether the elements could reasonably be separated into more than one contract.

The rule is deliberately protective. If a mixed contract can reasonably be separated out, but a contracting authority chooses not to do so, the mixed contract will be treated as above threshold where the relevant conditions are met. In other words, choosing to bundle does not buy an exemption from the full regime.

Reasonable separability is a judgement, not a formula. The guidance points authorities towards the practical and financial consequences of awarding more than one contract, such as the additional resource a split procurement would demand, or the value for money impact of losing a single award.

Where elements genuinely cannot reasonably be separated, the applicable threshold has to be identified. Schedule 1 paragraph 4 supplies the main purpose test: a contract the main purpose of which is works will be a works contract. That matters because the works threshold and the goods and services threshold differ. The guidance illustrates the risk with a goods element of £200k, above threshold, packaged with an unrelated works element of, say, £1m that sits below the works threshold.

Section 10: mixing special regimes with the general rules

Section 10 handles the second kind of mixing. It applies when an authority places a mixed contract containing one or more elements that would be subject to a special regime together with other above threshold elements that would not be subject to that special regime, or that would fall under a different special regime.

The same anti avoidance logic applies. Where the special regime elements could reasonably be separated from the general rules elements, an authority cannot rely on the lighter special regime rules for the whole contract. Where two special regimes could apply, reasonable separability again decides the outcome: if the elements are separable but are not separated, the general rules govern the contract.

Defence and security procurement is treated differently. A mixed defence and security contract may retain its special regime status even where the elements could be separated, provided there are good reasons for procuring the elements together. That is a broader discretion than concessions, light touch or utilities elements enjoy, and it reflects the operational realities of defence buying.

Exemptions are handled by a main purpose rule of their own. Under Schedule 2 paragraph 1, a contract is only an exempt contract where the goods, services or works that form its main purpose are exempt. An exempt element attached to a non exempt main purpose does not carry the whole contract out of scope.

Why it matters and how it changes practice

The practical effect of sections 5 and 10 is that packaging decisions carry a legal test with a default answer that favours the fuller regime, so the reasoning behind a bundle needs to exist in writing before award rather than being reconstructed afterwards.

The frameworks position deserves particular attention. The guidance is clear that a mixed contract under a below threshold framework that contains separable above threshold elements means the framework itself must be treated as an above threshold framework, and section 45 then applies to the mixed contracts awarded under it. That is a scoping decision taken at framework establishment, with consequences that run for the life of the arrangement.

There is a useful simplification for call off: authorities should not reapply the tests to call off contracts awarded under a framework, because the analysis belongs at framework level. And whatever the outcome, a mixed contract remains a public contract subject to the Act. Section 120 is also referenced, in relation to a regulation making power concerning the provider selection regime.

Applying it in a live procurement

Start at the design stage, not at the notice stage. Break the requirement into its elements, put an estimated value against each, and label each as goods, services or works, and as general rules or one of the four special regimes. That single table answers most of what sections 5 and 10 ask. Then take the separability question honestly, and if the elements could be separated but you do not want to separate them, record why. If separation is reasonably possible and you still bundle, plan on the above threshold or general rules treatment applying.

Where elements cannot reasonably be separated, apply the main purpose test and document how it was determined, especially where the values are close or where the highest value element is not the driving purpose. Then use Annex A and Annex B as the working aids they are intended to be: walking a contested bundle through the published decision routes and saving the result on file is the most efficient defence against a later challenge to how the contract was scoped.

How eSourcing Data helps

Mixed procurement decisions are made early and questioned late. eSourcing Data keeps the reasoning attached to the procurement itself: the element breakdown, the estimated values, the category and regime labels, and the separability rationale can all be captured against the project record, so the basis for treating a contract as above threshold, or for keeping a defence and security element bundled, is retrievable months later without rebuilding it from email.

Because scoping decisions drive downstream obligations, the platform links them to what follows. Once a contract is treated as above threshold or as falling under the general rules, the relevant notices, timescales and evaluation steps flow from the same record, and framework level decisions stay visible to everyone awarding under the arrangement. For below threshold activity, recording values and categories consistently makes it easier to spot where a bundling decision has quietly pushed a requirement over a threshold.

What to do about it

1. 1Break every requirement into its constituent elements at design stage and record an estimated value for each.
2. 2Label each element as goods, services or works, and as general rules or one of the four special regimes (concession, light touch, defence and security, utilities).
3. 3Run the reasonable separability test and record the practical and financial reasons for bundling or splitting before you go to market.
4. 4Where elements cannot reasonably be separated, apply the Schedule 1 paragraph 4 main purpose test and document how the category and threshold were determined.
5. 5Check exemption claims against Schedule 2 paragraph 1: the exemption must attach to the main purpose, not to a minor element.
6. 6At framework establishment, test whether separable above threshold elements mean the framework must be treated as above threshold, with section 45 applying to call offs.
7. 7Walk contested bundles through Annex A and Annex B and store the decision route, values and reasoning on the procurement file.