The Procurement Act 2023: preliminary market engagement

This is the third in our series of cross-sector articles considering the impact of the Procurement Act 2023 (the Procurement Act), which came into force on 24 February 2025 and introduces changes to how public procurements are awarded, managed and investigated. This article examines the impact of the Procurement Act on preliminary market engagement.

What is the issue?

Preliminary market engagement is the process by which contracting authorities conduct market consultations prior to the publication of a tender with a view to preparing for procurement. It is actively encouraged by the government, especially where contracting authorities have significant flexibility to design and tailor their competitive procurement procedures.

Rules that govern engagement are designed to ensure a level playing field amongst competing suppliers. This article discusses the legal framework behind engagement in light of the Procurement Act. 

What is new?

Sections 16 and 17 of the Procurement Act are largely similar to the pre-market engagement provisions in the Public Contracts Regulations 2015 (PCR 2015). The Procurement Act provides a more prescriptive list of acceptable purposes for justifying engagement with suppliers but there is a continued emphasis on contracting authorities taking steps to ensure that competitive distortion does not occur. Crucially, the Procurement Act confirms that suppliers will be excluded if they have acted improperly or are otherwise at an unfair disadvantage that cannot be remedied.

A key addition to the Procurement Act is the obligation for contracting authorities to publish a preliminary market engagement notice if it intends to conduct, or has conducted, preliminary market engagement. In particular the notices must include a description of the process by which the contracting authority intends to engage or has engaged with suppliers including location, date and time of events and any periods for the submission of information by suppliers. However, the actual information received by the contracting authority does not expressly need to be disclosed. If a contracting authority undertakes preliminary market engagement, the contracting authority must publish a Preliminary Market Engagement Notice prior to publishing a Tender Notice (unless it provides reasons for not doing so in its Tender Notice). Other changes are the publication of new forms of notice which advertise market opportunities. These include Pipeline Notices and Planned Procurement Notices.

How does it affect you?

Suppliers should seek out opportunities to engage with its clients in the public sector, and vice versa: the government encourages such engagement to open up opportunities and to ensure that what is being procured is what is needed. In both the guidance and anecdotally, we are seeing a real push from central government downwards to have those discussions. However, to mitigate against the risk of being excluded from the tender process, suppliers involved in preliminary market engagement should continue to be cautious about putting themselves in a position whereby they gain an unfair advantage by, for example, sharing too much information or giving overly prescriptive advice. This includes exercising caution in what may be ''off the record'' or ''informal'' discussions. 

Regarding mandatory notices, suppliers should keep in mind that their discussions with contracting authorities may need to be disclosed to other tenderers and therefore they should not seek an advantage by obtaining information that is not available to their competitors. 

Our public procurement article series also explores other considerations in more detail. Please contact Matt Evans or a member of our team if you want to discuss this or any other issue.