Key considerations for utilities in Northern Ireland
The Procurement Act 2023 (the “Act”), effective for all new procurements commenced from 24 February 2025, represents significant reforms for the UK’s procurement regime. While much of the focus has been on the Act’s impact across public sector contracting authorities, there are a number of important distinctions in how the Act applies to utilities, and in particular to private utilities operating in Northern Ireland.
Utilities in Northern Ireland engaged in electricity and gas activities remain subject to the Act, as the exclusions in Great Britain for these sectors do not apply in Northern Ireland. The result is that utilities in Northern Ireland must navigate both the core provisions of the new regime and a series of exceptions to the Act that reflect the distinct legal framework applicable to Northern Ireland.
In light of the complexities in understanding the legal framework, we have provided an overview of the main differences, highlighting the provisions that do not apply to any utilities operating in Northern Ireland and the provisions of the Act that do not apply to private utilities.
Provisions of the Act that do not apply to any utilities in Northern Ireland
| Section/schedule | Area | Comment |
| Section 13 | National Procurement Policy Statement | No obligation for Northern Ireland authorities to have regard to the National Procurement Policy Statement. |
| PART 6 – Section 84(2) | Below Threshold Contracts | Below threshold obligations (procedure, SME engagement, notices, payment terms) do not apply to Northern Ireland authorities or utilities. |
| Section 69 | Payment compliance notices | Requirement to publish six-monthly payment compliance notices does not apply to Northern Ireland authorities. |
| Section 75(6) | Contract change notices | Obligation to publish notice before modifying a contract under section 75(1) does not apply to Northern Ireland authorities. |
| Section 93 | Pipeline notices | No requirement for Northern Ireland authorities/utilities to publish any pipeline notices. |
| Section 53(4) | Publication of contracts | Obligation to publish copy of contracts over £5 million does not apply in Northern Ireland. |
| Schedule 2 – Part 1- Paragraph 2 and 3 | Vertical and horizontal arrangements | Do not apply to specific utilities and utilities have separate exemption requirements set out in paragraphs 5 and 6 of Schedule 2. In addition, there are further exempt activities set out in paragraphs 31-34 of Schedule 2. |
| Schedule 8 – Paragraph 4, Paragraph 5 and Paragraph 8 | Permitted contract modifications | The 50% limit on value increases for permitted contract modifications under these paragraphs does not apply to utilities contracts in Northern Ireland, providing greater flexibility for justified changes. |
| Section 38 | Utilities dynamic markets | The Act includes some variations in respect of dynamic markets established by utilities: Section 38(1)- non-utilities operating in the dynamic market are only able to charge suppliers that are awarded the contract. However, this section does not apply for utilities operating in the dynamic market. Under Section 38(3), utilities are entitled to charge fees to suppliers in connection with obtaining membership. |
| Section 40 | Utilities dynamic markets | Section 40- the duty to publish tender notices does not apply to utilities operating in the dynamic market. |
| Section 34(4) | Utilities dynamic markets | Section 34(4)- contracting authority’s obligation to consider any applications to join the dynamic market, from entities that have submitted a tender as part of a competitive flexible procedure, does not apply in respect of a utilities dynamic market. |
| Section 96(2)(a) | Utilities dynamic markets | Section 96(2)(a)- utilities operating in the dynamic market do not have to provide electronic communication system free of charge. |
Provisions of the Act that do not apply to private utilities in Northern Ireland
| Section/schedule | Area | Comment |
| Section 17 | Preliminary market engagement notices | Private utilities are not required to publish a notice when conducting early market engagement, though they must still ensure fair competition when awarding the contract under section 16. |
| Section 53 | Contract details notice | Unlike under the Utilities Contracts Regulations 2016, there is no obligation on a private utility to publish Contract Details Notice following a contract award. |
| Section 55(3) | Procurement termination notices | Private utilities are not required to publish a termination notice when a procurement is abandoned or not awarded. |
| Section 80(4) | Contract termination notices | No obligation to publish a notice when a contract ends or expires. |
| Section 57(4) | Exclusion grounds | Excluded suppliers are to be regarded as excludable suppliers, therefore there is no obligation on private utilities to automatically exclude suppliers that are excluded suppliers. |
| Section 51(3)(c) | Standstill period on Direct Award | The requirement under this section to hold a standstill period of eight working days, does not apply in relation to a contract that is awarded under section 41 or 43. |
| Section 47(5) | Framework agreements | The eight-year restriction on framework agreements does not apply to private utilities. |
| Section 52(6) | Key performance indicators | Obligation to set and publish at least three key performance indicators for contracts over £5 million does not apply to private utilities. |
| Section 68(1) | Implied payment terms | The 30-day payment term and related implied provisions do not apply to a utilities contract awarded by a private utility. |
| Section 73(6) | Implied payment terms between contractors and subcontractors | Implied subcontract payment terms do not apply to a public subcontract that is for the purpose of a utilities contract awarded by a private utility. |
| Section 108(5) | Procurement investigations | Private utilities fall outside the scope of the appropriate authority’s investigative powers under section 108. |
Key takeaways for utilities operating in Northern Ireland
In conclusion, utilities operating in Northern Ireland remain within the scope of the Procurement Act 2023, but the legislation recognises their distinctive regulatory position. While public utilities must comply with the full set of statutory obligations applicable in Northern Ireland, private utilities benefit from targeted exemptions that reduce transparency and procedural burdens, allowing greater commercial discretion.
Nevertheless, the overarching procurement principles of fairness, transparency, equal treatment, and value for money continue to apply. Utilities should therefore maintain robust governance and defensible processes even where specific publication or procedural duties are disapplied.
