PPN 05/23 and the Australia and New Zealand FTAs: the official guidance, explained

The key facts

• PPN 05/23 was issued in May 2023 and sets out changes to public procurement obligations arising from the UK's free trade agreements with Australia and New Zealand.
• The amendments apply to all procurements going forward, not only those involving Australian or New Zealand suppliers.
• The provisions should be applied to new procurements once the relevant secondary legislation came into force on 25 May 2023.
• The Cabinet Office made a statutory instrument under powers in the Trade (Australia and New Zealand) Act 2023, amending the PCRs, UCRs and CCRs.
• Contracts whose value cannot be estimated must be treated as being valued at the relevant threshold, and are therefore subject to the full regime.
• Sub-central contracting authorities and utilities may no longer use a Prior Information Notice or Periodic Indicative Notice as a call for competition.
• It is made explicit that contracting authorities must not terminate a contract in order to avoid international obligations.
• The PPN does not apply to contracting authorities whose functions are wholly or mainly Scottish, Welsh or Northern Irish devolved functions, and the Devolved Administrations will issue their own guidance.

What this PPN is and who it applies to

PPN 05/23 explains changes to UK public procurement obligations that arise from the free trade agreements the UK signed with Australia and New Zealand. The agreement was signed in December 2021 and contains obligations that required amendment to UK procurement regulations to ensure full compliance.

The important framing point comes early in the note. Although the amendments arise from these particular agreements, they apply to all procurements going forward, not just those involving Australian and New Zealand suppliers. This is not a trade-partner-specific process to be run only when a bidder from those countries appears.

The note is relevant to all contracting authorities within the scope of UK public procurement regulations, including central government departments, their executive agencies and non-departmental public bodies, the wider public sector, local authority and NHS bodies, and utilities. It does not apply to contracting authorities whose functions are wholly or mainly Scottish, Welsh or Northern Irish devolved functions as defined by regulation 1(7) and 1(8) of the Public Contracts Regulations 2015, and the Devolved Administrations will issue their own guidance reflecting the same changes.

Authorities should ensure they comply where it is relevant to do so, meaning procurements above the thresholds set out in the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016. The provisions applied to new procurements once the relevant secondary legislation came into force on 25 May 2023.

The three changes

The government made a statutory instrument under powers in the Trade (Australia and New Zealand) Act 2023, amending the PCRs, UCRs and CCRs in three respects. First, contracting authorities unable to estimate the value of a procurement must treat it as being valued at the relevant threshold, and therefore as subject to the full regime. Second, the option for sub-central contracting authorities and utilities to use a Prior Information Notice or Periodic Indicative Notice as a call for competition is removed. Third, it is made explicit that contracting authorities must not terminate a contract to avoid international obligations.

On unknown value, the existing regulations provide various methods for estimating contract value in order to determine whether the relevant thresholds apply. What the change addresses is the residual case where no estimate can be made. Rather than allowing that uncertainty to sit outside the regime, the default is now to treat the procurement as being at the threshold, which pulls it into the full set of obligations.

On notices, the regulations previously permitted sub-central contracting authorities and utilities to use a Prior Information Notice or Periodic Indicative Notice as a call for competition instead of a standard contract notice, where certain requirements were met. That option has gone. Both notice types may otherwise continue to be used for any other purpose permitted under the relevant regulations, so this is the removal of one specific function rather than the retirement of the notices themselves.

On termination, the existing regulations already contained provisions preventing procuring entities from using options, cancelling a covered procurement or modifying awarded contracts in order to circumvent the rules. The free trade agreement adds the requirement that contracting authorities should not terminate awarded contracts to avoid international obligations, and the statutory instrument turns that into an explicit statutory restriction that practitioners should note.

What it changes and why it matters

The note is candid about scale. It states that these new requirements are expected to result only in minor technical changes to how practitioners carry out procurements. That is an accurate description of the mechanics, and it is also why the changes are easy to overlook until one of them applies to a live case.

The unknown value provision has the widest practical reach, because it removes a grey area rather than adding a step. Where a requirement genuinely cannot be valued, for example an open-ended call-off arrangement or a demand-led service with no reliable baseline, the safe assumption is no longer that it falls outside the regime by default. It is treated as at threshold and handled accordingly.

The removal of the Prior Information Notice route as a call for competition affects a narrower group, sub-central contracting authorities and utilities, but it changes a real process choice. Those bodies now need to run a standard contract notice where previously the alternative route was open to them, which has consequences for planning and timetabling.

The termination provision is less about day to day process and more about conduct. It closes off an argument, making clear that ending a contract cannot be used as a mechanism to escape obligations the UK has taken on internationally. It sits alongside the pre-existing anti-circumvention provisions covering options, cancellation and modification.

Applying it in practice

Test your valuation practice against the new default. If a category or a contract type routinely produces the answer that value cannot be estimated, that is now a signal to plan for the full regime rather than a reason to treat the procurement as out of scope. It is worth checking whether any internal thresholds or exemption routes were built on the old assumption.

If you are a sub-central contracting authority or a utility, check your process documentation, templates and any e-procurement configuration for references to using a Prior Information Notice or Periodic Indicative Notice as a call for competition. That route is closed. Make sure your teams still understand that both notice types remain available for their other permitted purposes, so the correction does not overshoot into abandoning them entirely.

Build the termination restriction into your contract management governance. Where termination is being considered, the reasoning should be recorded in a way that shows the driver, and that it is not avoidance of international obligations. That documentation habit is consistent with what other Procurement Policy Notes ask for around termination decisions.

Finally, keep the scope point front of mind. These are not rules that switch on when an Australian or New Zealand supplier bids. They apply to all procurements above the relevant thresholds under the PCRs, UCRs and CCRs, and the Devolved Administrations will bring the same changes through their own guidance. Enquiries about the note go to the Crown Commercial Service Helpdesk.

How eSourcing Data helps

Two of these three changes are about getting process defaults right, and defaults belong in the system rather than in someone's memory. eSourcing Data lets you capture estimated value at the point a requirement is created, including the case where a reliable estimate cannot be produced, and route that procurement down the full regime path rather than leaving the decision to individual judgement.

On notices, the platform generates and tracks the notices a procurement requires, so the correct call for competition is used for the type of authority running it, and so notice history is visible across the portfolio. That makes it straightforward to check that no sub-central or utility procurement is still relying on a route that has been withdrawn.

For the termination restriction, the value is in the record. eSourcing Data holds contract records with the reasoning, approvals and dates behind any termination decision, so an authority can demonstrate what drove the decision if it is ever questioned. Taken together with the platform's reporting, that keeps a set of technical rule changes visible in everyday practice instead of buried in a note issued in 2023.

What to do about it

1. 1Confirm your organisation is in scope, and check whether devolved guidance applies to any part of your operation instead.
2. 2Update valuation guidance so that any procurement whose value cannot be estimated is treated as being at the relevant threshold and subject to the full regime.
3. 3If you are a sub-central contracting authority or a utility, remove the Prior Information Notice and Periodic Indicative Notice call for competition route from your process documents and system configuration.
4. 4Confirm teams still use both notice types for their other permitted purposes rather than dropping them altogether.
5. 5Add an explicit check to termination governance that the decision is not driven by avoidance of international obligations, and record the reasoning.
6. 6Review templates and training material that predate 25 May 2023 for references to the withdrawn call for competition route.
7. 7Apply the changes across all above threshold procurements under the PCRs, UCRs and CCRs, not only those involving Australian or New Zealand suppliers.