Procurement Act 2023 · PART 1 Counterparty exempted contracts

2 Vertical arrangements

Sch. 2 para. 2 · in force: yes

Captured statutory text (L5)

2 Vertical arrangements

(1)A contract between a contracting authority and a person that is controlled by—

(a)the contracting authority,

(b)the contracting authority acting jointly with one or more other contracting authorities,

(c)another contracting authority, where that authority also controls the contracting authority referred to in paragraph (a), or

(d)another contracting authority acting jointly with one or more other contracting authorities, where the authorities acting jointly also control the contracting authority referred to in paragraph (a).

(2)A contracting authority, or a contracting authority acting jointly with one or more other contracting authorities, controls a person if—

(a)the contracting authority is a parent undertaking, or the contracting authorities are parent undertakings, in relation to the person,

(b)no person other than the authority, or authorities, exerts a decisive influence on the activities of the person (either directly or indirectly),

(c)more than 80 per cent of the activities carried out by the person are carried out for or on behalf of—

(i)the contracting authority or authorities, or

(ii)another person that is, or other persons that are, controlled by the authority or the authorities acting jointly, and

(d)in the case of joint control—

(i)each of the contracting authorities is represented on the person’s board, or equivalent decision-making body, and

(ii)the person does not carry out any activities that are contrary to the interests of one or more of the contracting authorities.

(3)A person is not to be regarded as controlled by a contracting authority, or a contracting authority acting jointly with other contracting authorities, if any person that is not a public authority holds shares in the person.

(4)In sub-paragraph (2)(a)— “parent undertaking” has the meaning given in section 1162 of the Companies Act 2006, save that an “undertaking” includes any person; “parent undertakings” means two or more contracting authorities acting jointly that would, if they were a single undertaking, be a parent undertaking.

(5)For the purposes of sub-paragraph (2)(b), a person does not exercise a decisive influence on the activities of a person only by reason of being a director, officer or manager of the person acting in that capacity.

(6)An appropriate authority may by regulations make provision about how a calculation as to the percentage of activities carried out by a person is to be made for the purposes of sub-paragraph (2)(c).

(7)For the purposes of sub-paragraph (2)(d)(i), one representative may represent more than one contracting authority.

(8)In this paragraph, references to a contracting authority do not include references to a public undertaking or a private utility.

Full captured verbatim text

(1) A contract between a contracting authority and a person that is controlled by—

(a) the contracting authority,

(b) the contracting authority acting jointly with one or more other contracting authorities,

(c) another contracting authority, where that authority also controls the contracting authority referred to in paragraph (a), or

(d) another contracting authority acting jointly with one or more other contracting authorities, where the authorities acting jointly also control the contracting authority referred to in paragraph (a).

(2) A contracting authority, or a contracting authority acting jointly with one or more other contracting authorities, controls a person if—

(a) the contracting authority is a parent undertaking, or the contracting authorities are parent undertakings, in relation to the person,

(b) no person other than the authority, or authorities, exerts a decisive influence on the activities of the person (either directly or indirectly),

(c) more than 80 per cent of the activities carried out by the person are carried out for or on behalf of—

(i) the contracting authority or authorities, or

(ii) another person that is, or other persons that are, controlled by the authority or the authorities acting jointly, and

(d) in the case of joint control—

(i) each of the contracting authorities is represented on the person’s board, or equivalent decision-making body, and

(ii) the person does not carry out any activities that are contrary to the interests of one or more of the contracting authorities.

(3) A person is not to be regarded as controlled by a contracting authority, or a contracting authority acting jointly with other contracting authorities, if any person that is not a public authority holds shares in the person.

(4) In sub-paragraph (2)(a)—

“parent undertaking” has the meaning given in section 1162 of the Companies Act 2006, save that an “undertaking” includes any person;

“parent undertakings” means two or more contracting authorities acting jointly that would, if they were a single undertaking, be a parent undertaking.

(5) For the purposes of sub-paragraph (2)(b), a person does not exercise a decisive influence on the activities of a person only by reason of being a director, officer or manager of the person acting in that capacity.

(6) An appropriate authority may by regulations make provision about how a calculation as to the percentage of activities carried out by a person is to be made for the purposes of sub-paragraph (2)(c).

(7) For the purposes of sub-paragraph (2)(d)(i), one representative may represent more than one contracting authority.

(8) In this paragraph, references to a contracting authority do not include references to a public undertaking or a private utility.

What this provision means

Model summary, checked against the text on the left.

Relevance to Signicat: 1/3 · detailed summary (L4) Status: not needed for a short provision · Stored artifact; current recipe verification unavailable

Vertical contracts between contracting authorities and controlled persons qualify as exempted contracts under specified control conditions.

Only the one-line summary above is stored for this provision; the text itself is the evidence.

Refers to

other law external_cite · s. 1162

Referred to by

schedule ref schedule_ref · s. 122

schedule ref schedule_ref · s. 124

schedule ref schedule_ref · s. 2

schedule ref schedule_ref · s. 3

Part summaries

0 of 0 parts have a verified summary.

L1 unavailable for current verification: the overall summary needs every part verified. Provisions and the verified summaries remain readable.

Verification findings (391)

synthesis coverage: missing/unverified L2 part-1

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synthesis coverage: missing/unverified L2 schedule-11

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synthesis coverage: missing evaluation uk:ukpga/2023/54#schedule-11-paragraph-2

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Instrument tier unavailable

Change history as published

Sch. 9 para. A1 and cross-headings omitted (24.2.2025) by virtue of The Procurement (Miscellaneous Amendments) (Wales) Regulations 2025 (S.I. 2025/181), regs. 1(2), 3(4)(a)

Sch. 9 para. B1 and cross-headings omitted (W.) (31.12.2025) by The Procurement Act 2023 (Specified International Agreements) (Amendment) (Wales) Regulations 2025 (S.I. 2025/1361), regs. 1(2), 3(2) (with reg. 4)

Sch. 9 para. C1 and cross-headings omitted (W.) (31.3.2026) by virtue of The Procurement Act 2023 (Specified International Agreements) (Amendment) (Wales) Regulations 2026 (W.S.I. 2026/97), regs. 1(2), 2(2) (with reg. 3)

Pending effects amendments not yet applied to this text

No captured pending effects.

Provenance

Every claim the system makes about this text is traceable to these identifiers.

Instrument: uk:ukpga/2023/54
Part: PART 1 Counterparty exempted contracts
Version: 1f42cbe2e52b2d3b319dfe92…
Content hash: sha256 73b9066812ca51e47c75d23f…
Source: legislation.gov.uk/ukpga/2023/54