The Bottom Line
- Performance Under the Microscope: From January 2026, your company’s performance on public contracts will be formally assessed and recorded by contracting authorities, creating a track record that could significantly impact your ability to win future bids.
- Supply Chain Payments Scrutinised: New transparency rules will require public notices on payment compliance. This puts pressure on prime contractors to ensure they are paying their subcontractors promptly and in line with contractual terms, increasing reputational risk for delays.
- Staggered Deadlines for Compliance: The new rules are being phased in. Key performance and payment notice regulations start on 1st January 2026, with further payment information requirements and rules for Welsh-regulated contracts following on 1st April 2026.
The Details
The UK government has set firm dates for bringing critical contract management provisions of the landmark Procurement Act 2023 into force. This move signals a significant shift from the award stage of a public tender to the lifecycle performance and administration of the contract itself. These new regulations are not minor administrative tweaks; they represent a concerted effort to enhance transparency, improve supplier performance, and protect the supply chain, particularly small and medium-sized enterprises (SMEs), from late payments. For any business engaged in or considering public sector work, these changes necessitate an immediate review of internal compliance and performance management systems.
Effective from 1st January 2026, two key sections will be activated for most UK public contracts. Section 71 will empower contracting authorities to formally assess and publish details of a supplier’s performance against contractual KPIs. Poor performance could therefore become a matter of public record, influencing future procurement decisions across the public sector. Simultaneously, Section 69 will introduce payments compliance notices, requiring authorities to publish confirmation that a supplier is complying with the payment terms set out in the contract. This shines a spotlight on payment cycles and holds prime contractors publicly accountable for their payment practices.
The rollout continues on 1st April 2026, when further transparency measures come into effect. Section 70 will be activated (for procurements outside of Welsh ministerial control), requiring the publication of specific information about payments made under public contracts. This adds another layer of financial scrutiny to contract delivery. The rules on payments compliance notices (Section 69) will also be extended to cover procurements regulated by the Welsh Ministers from this date, ensuring a consistent, albeit slightly delayed, application of the rules across England and Wales. Businesses must prepare now for this new era of public accountability in contract management.
Source
UK Statutory Instruments
