PPN 013 on using standard contracts: the official guidance, explained

The key facts

• PPN 013 was previously issued in February 2025, replacing PPN 08/23, and was updated in April 2025 to expand use of the Short Form Contract.
• It applies to all central government departments, their executive agencies and non-departmental public bodies, and must be applied with immediate effect.
• There are three Standard Contracts: the Model Services Contract, the Mid-Tier Contract and the Short Form Contract.
• The Model Services Contract is encouraged where the whole life contract value is around 20 million pounds or more, or where a contract is rated Gold using the Cabinet Office Contract Tiering Tool.
• The Mid-Tier Contract suits goods and services above the relevant thresholds but below approximately 20 million pounds, and can be used below threshold where a contract is more complex or critical.
• The April 2025 update allows the Short Form Contract to be used for non-complex goods and services above the relevant thresholds, where proportionate and appropriate and within limits set by the organisation.
• Used above threshold, the Short Form Contract will be missing several clauses compared to the Mid-Tier Contract and is likely to need amendment, with the missing clauses listed in the Short Form Contract Guidance note.
• Standard Contracts need not be used where a more suitable form exists, such as departmental terms on purchase orders, a government framework or an industry-specific contract.

What this PPN is and who it applies to

PPN 013 sets the government's position on contract standardisation. The Government Commercial Function and the Government Legal Department have published three standard contracts for use by government departments and many other public sector organisations, and this note tells in-scope bodies to use them rather than drafting bespoke terms.

It applies to all central government departments, their executive agencies and non-departmental public bodies. The note asks that it be circulated particularly to those in commercial, procurement and contract management roles, and notes it may also be relevant to finance, operational and sustainability colleagues. Other public sector contracting authorities may wish to apply the same approach. In-scope organisations must apply its provisions with immediate effect.

The note has a two stage history worth understanding. It was issued in February 2025 and updated PPN 08/23 to reflect terminology introduced by the Procurement Act 2023 and the Procurement Regulations 2024, which apply to procurements commenced on or after 24 February 2025. It was then updated again in April 2025 for a substantive reason: to expand the appropriate use of the Short Form Contract.

The three Standard Contracts and where each fits

The rule is straightforward. Where an in-scope organisation is purchasing bespoke goods or services, or goods or services that cannot be facilitated by a suitable government commercial tool such as a Crown Commercial Service framework, it should adopt one of the Standard Contracts as the basis for the procurement rather than creating a bespoke contract.

The Model Services Contract is the template for complex services procurements that will typically require some form of formal dialogue or negotiation with potential suppliers, for example to clarify the scope of existing arrangements or desired service outcomes, or to establish an appropriate balance of risk and reward. It is described as particularly suitable for business process outsourcing and ICT delivery services, and its use is encouraged where the likely whole life contract value is around 20 million pounds or more, or where the contract is rated Gold using the Cabinet Office Contract Tiering Tool.

The Mid-Tier Contract covers goods or services procurements that are not particularly complex and do not require formal dialogue or negotiation. It may be used where the likely whole life value is above the relevant procurement thresholds but below approximately 20 million pounds. It may also be used below the thresholds where a contract is more complex or critical than a low value purchase would suggest.

The Short Form Contract is the template for low value, non-complex goods or services procurements, and should be used where the likely whole life value is below the relevant procurement thresholds, unless the contract is more complex or critical, in which case another contract such as the Mid-Tier Contract may be used. All three templates, and their guidance notes, are published on GOV.UK.

What the April 2025 update changed

The April 2025 update expanded the appropriate use of the Short Form Contract. In-scope organisations may now use it for the provision of non-complex goods and services above the relevant procurement thresholds, where it is proportionate and appropriate to do so. That is a genuine loosening of the earlier position, which restricted the Short Form Contract to below threshold work.

The permission is bounded. Organisations are expected to set their own limits on this use, and the note gives examples: limits by Contract Tiering Tool level of Gold, Silver or Bronze, limits by value, and use by exception only. Organisations should also consider the risks of the particular procurement, including data protection, security, intellectual property rights and access for small and medium-sized enterprises, alongside proportionality and value.

There is an important practical warning attached. If the Short Form Contract is used for an above threshold procurement, it will be missing several clauses compared with the Mid-Tier Contract, and is likely to need amending to work for the procurement, for example by introducing additional clauses from the Mid-Tier Contract to cover missing but required provisions. The Short Form Contract Guidance note on GOV.UK sets out which clauses are missing. Using the shorter template above threshold is therefore a drafting exercise, not a shortcut around one.

Why standardisation is the policy

The rationale in the note is commercial rather than administrative. Creating bespoke contracts adds expenditure, increases negotiation and resource time, and risks departments reinventing contracts that already exist or omitting clauses that support government policy. It also risks inconsistent policy positions across government, which confuses suppliers and generates inefficiency through additional clarification questions during procurement.

The suite is designed to simplify the procurement process, support businesses and create a level playing field for small and medium-sized enterprises, by setting out a consistent government approach to terms and conditions and to doing business with government. The intended effects are reduced administration, lower resource and legal costs, less negotiation time, and better consistency and compliance with relevant legislation and procurement policy.

The note situates this within wider policy. The Sourcing Playbook states that common goods and services should be purchased through a government framework, and describes the Model Services Contract as a convenient and flexible starting point for a wide range of government services, providing contractual clauses that support Playbook policies.

There are sensible exceptions. The Standard Contracts need not be used where a more suitable form of contract is available, for example departmental terms and conditions attached to purchase orders for very low value procurements, a government framework, or an industry-specific contract such as those available for construction.

Applying it in practice

Make the choice of contract an explicit early decision, not something settled when documents are being assembled. The determining factors are whole life value, complexity, whether formal dialogue or negotiation is likely, and the Contract Tiering Tool rating. Recording that reasoning at the outset avoids the familiar situation where a complex requirement ends up on a template that was never designed for it.

If your organisation intends to use the expanded Short Form Contract permission above threshold, set the limits first. The note expects organisations to define their own boundaries, whether by tiering level, by value, or by treating it as an exception route requiring specific approval. Without those limits, the permission drifts into a default and the risk assessment the note asks for never happens.

Whichever template you use, expect to tailor it. The note is explicit that organisations should always seek appropriate legal advice, because these templates need adapting to the specific procurement and to any department-specific needs. Guidance notes accompany each template and appear throughout the contracts themselves.

Feed experience back. The Standard Contracts are subject to ongoing continuous improvement and in-scope organisations are encouraged to share feedback on their use in practice, through the Standard Contracts Policy Team at the Cabinet Office or the Crown Commercial Service Helpdesk. Organisations not in scope, such as NHS bodies, are asked to have regard to the Standard Contracts when updating their own terms and conditions.

How eSourcing Data helps

Choosing the right template depends on facts you should already hold: estimated whole life value, complexity, expected route to market and tiering. eSourcing Data captures those attributes at the point a requirement is created, so the contract selection decision is made against structured data rather than an estimate recalled from memory, and so the reasoning stays attached to the procurement record.

Where organisations set limits on the expanded Short Form Contract permission, those limits only work if they are visible in the workflow. The platform can hold the decision and its justification against the procurement, record the approval where above threshold use is treated as an exception, and keep the resulting contract type reportable across the portfolio, so commercial leadership can see how often each template is actually being used.

Standardised contracts also make contract management easier to systematise. Because terms are consistent, eSourcing Data can track the obligations, milestones and notice requirements that follow from them across many contracts at once, and can support the transparency notices the Procurement Act 2023 requires alongside. The consistency the PPN is aiming for at drafting stage pays off again in reporting and supplier management.

What to do about it

1. 1Default to one of the three Standard Contracts wherever a suitable government commercial tool or framework is not available, rather than drafting bespoke terms.
2. 2Decide the contract template at requirement definition stage, using whole life value, complexity, likely negotiation and the Contract Tiering Tool rating.
3. 3Set and publish internal limits for using the Short Form Contract above threshold, whether by tiering level, value or exception-only approval.
4. 4Where the Short Form Contract is used above threshold, consult the Short Form Contract Guidance note and add the missing clauses needed from the Mid-Tier Contract.
5. 5Assess data protection, security, intellectual property and SME access risks before choosing a lighter template for an above threshold procurement.
6. 6Seek legal advice to tailor the chosen template to the specific procurement and any department-specific requirements.
7. 7Share feedback on the Standard Contracts with the Standard Contracts Policy Team so the suite continues to improve.