New PPN 08/23

The new Procurement Policy Note (PPN 08/23) was published on 1 August 2023 by Cabinet Office, replacing PPN 04/14 (Model Services Contract) and PPN 06/14 (Short Form Terms and Conditions) relating to the use of standard contracts by the public sector.

The revised PPN confirms updated versions are now available for use, the specifics of which are outlined by Lucy Probert, Senior Associate in our Health Commercial team, below.

What does the PPN say?

The new Procurement Policy Note (PPN 08/23) was published on 1 August 2023 by Cabinet Office, replacing PPN 04/14 (Model Services Contract) and PPN 06/14 (Short Form Terms and Conditions) relating to the use of standard contracts by the public sector. The revised PPN confirms updated versions are now available for the following Standard Contracts:

1. The Model Services Contract (now version 2.1), designed for use with complex services with an estimated contract value of in excess of £20million, and where a negotiated procedure is likely to be required;
2. Mid-Tier Contract (now version 1.2), designed for goods and services procurements which are not particularly complex and do not require negotiation and where the contract value is above threshold but below £20 million; and 
3. Short Form Contract (now version 1.4), designed for low value goods and services procurements which are below threshold.

The PPN applies to all Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies (referred to as the “In-Scope Organisations”). Whilst the PPN requires that In-Scope Organisations should adopt the Standard Contracts as soon as practicable, it recognises that each organisation has different levels of maturity and some may need time to fully embed PPN 08/23, especially if they have more complex operating environments. NHS bodies which are not central government bodies are not included within the list of In-Scope Organisations and have their own standard contracts, but can nevertheless consider this a useful resource. 

The PPN reiterates that the purpose of making the Standard Contracts available for use in procurements is to avoid the use of bespoke contracts and the inherent risks that these involve including for example avoiding additional expenditure, increased negotiation time and resource and failure to include important contractual protections. It also provides consistency across the public sector and improves SME access. The PPN also confirms that the Standard Contracts need not be used where there is a more suitable form of contract available – for example in low value procurements where a purchase order is sufficient or where a government framework is available. 

Using the Standard Contracts

As well as the overarching PPN, Cabinet Office and Government Legal Department has also published a list of the changes made to each Standard Contract for transparency purposes which will be of interest to public sector organisations and suppliers alike who work with these terms on a regular basis. 

As before, there are also comprehensive guidance notes that accompany each Standard Contract. As a reminder, the Standard Contracts are templates and designed to be tailored to meet the needs of each procurement so suitable advice should be sought early in the procurement process to ensure that they are utilised to deliver maximum benefit. 

Links to each of the Standard Contracts and the accompanying guidance and list of changes are included within the PPN itself, which is available here.

For further information and support, please get in touch.