PART 1

Key definitions

Contracting authorities
2
1
In this Act “contracting authority” means—
a
a public authority, or
b
in the case of a utilities contract, a public authority, public undertaking or private utility,
other than an excluded authority.
2
In this Act—
- “public authority” means a person that is—
  1. wholly or mainly funded out of public funds, or
  2. subject to public authority oversight,
and does not operate on a commercial basis (but see subsections (9) and (10));
- “public undertaking” means a person that—
  1. is subject to public authority oversight, and
  2. operates on a commercial basis;
- “private utility” means a person that—
  1. is not a public authority or public undertaking, and
  2. carries out a utility activity.
3
A person is subject to public authority oversight if the person is subject to the management or control of—
a
one or more public authorities, or
b
a board more than half of the members of which are appointed by one or more public authorities.
4
The following are examples of factors to be taken into account in determining whether a person operates on a commercial basis—
a
whether the person operates on the basis that its losses would be borne, or its continued operation secured, by a public authority (whether directly or indirectly);
b
whether the person contracts on terms more favourable than those that might reasonably have been available to it had it not been associated with a public authority;
c
whether the person operates on a market that is subject to fair and effective competition.
5
The following authorities are excluded authorities—
a
a devolved Scottish authority , except where a devolved Scottish authority carries out procurement falling within section 115A;
b
the Security Service, the Secret Intelligence Service and the Government Communications Headquarters;
c
the Advanced Research and Invention Agency;
d
any person that is subject to public authority oversight—
i
only by reference to a devolved Scottish authority, or
ii
by reference to an authority mentioned in paragraph (b) or (c).
6
An authority is a “devolved Scottish authority” if its functions are exercisable only in or as regards Scotland, and—
a
none of its functions relate to reserved matters, or
b
some of its functions relate to reserved matters and some do not.
7
A contracting authority that is a public undertaking or private utility is to be treated as a devolved Scottish authority for the purposes of this Act if it operates only in or as regards Scotland, and—
a
none of its activities relate to reserved matters, or
b
some of its activities relate to reserved matters and some do not.
8
In this Act, a reference to a devolved Scottish authority includes a reference to an authority that is to be treated as a devolved Scottish authority for the purposes of this Act.
9
In this Act, a reference to a public authority includes a reference to the Common Council of the City of London.
10
For the purposes of this Act, a person that operates on a commercial basis but is, as a controlled person, awarded an exempted contract by a public authority in reliance on paragraph 2 of Schedule 2 (vertical arrangements) is to be treated as a public authority in relation to any relevant sub-contract.
11
This Act does not apply to His Majesty acting in his private capacity.
12
In this section—
- “relevant sub-contract” means a contract substantially for the purpose of performing (or contributing to the performance of) all or any part of the exempted contract;
- “reserved matters” has the same meaning as in the Scotland Act 1998.
S. 2 applied (24.2.2025) by S.I. 2013/1582, reg. 6(2), Sch. 2 Pt. 1 (as amended by The Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 (S.I. 2025/163), regs. 1(2), 17 (with reg. 33))
Words in s. 2(5)(a) inserted (24.2.2025) by The Procurement Regulations 2024 (S.I. 2024/692), regs. 1(2), 47(2); S.I. 2024/716, Sch. (as amended by S.I. 2024/959, regs. 1(2), 2(7)(a))
S. 2 in force at 24.2.2025 by S.I. 2024/716, Sch. (as amended by S.I. 2024/959, regs. 1(2), 2(7)(a))
S. 2 not in force at Royal Assent, see s. 127(2)