Procurement Fridays: contract change and performance

The latest Procurement Fridays webinar brought the current series to a close with a detailed and practical session focused on contract change and contract performance in public procurement.

Delivered by procurement law expert Kieran McGaughey, the session explored how contracting authorities can lawfully vary contracts and manage supplier performance under both the Public Contracts Regulations 2015 (PCR) and the Procurement Act 2023.

Understanding which rules apply

A central theme throughout was the importance of identifying which procurement regime governs a contract. Kieran emphasised that contracts and frameworks awarded under PCR 2015 remain subject to those rules, while procurements launched after the commencement of the Procurement Act 2023 are governed by the new regime. The relevant date is when the procurement was commenced, regardless of when the contract itself was signed.

Attendees were encouraged to clearly label contracts internally, maintain accurate contract registers, and ensure teams understand which rules apply before considering any variation.

Contract modifications under Regulation 72

The session revisited Regulation 72, setting out the gateways or safe harbours that allow contracts to be modified without running a new procurement. These include:

Clear, precise and unequivocal review clauses
Additional works, goods or services where changing supplier is not feasible
Unforeseeable circumstances
Replacement of the contractor following corporate restructuring
Non‑substantial modifications
Low‑value changes

Using practical examples and polling, Kieran highlighted common pitfalls—particularly around percentage caps, calculating changes against the original contract value, and the requirement to publish modification notices in certain cases.

A key takeaway was that smaller changes are generally easier to accommodate, while larger changes, such as significant increases in value or duration, require careful legal analysis.

What’s changed under the Procurement Act 2023

He then moved on to Section 74 and Schedule 8 of the Procurement Act, which introduces a broadly similar but more flexible framework for contract changes.

Notable differences discussed included:

Contract value evolving over time, with the 50% cap now being calculated against the current contract value
New permitted modification grounds, including the materialisation of a known risk

Kieran cautioned that while the Act offers more flexibility in some areas, it also introduces new complexity, particularly around notices and increased transparency.

Contract change notices and legal risk

A significant focus was placed on the new contract change notice requirements. Under the Procurement Act, many contract modifications require publication before the change takes effect, increasing visibility to the market and, potentially, the risk of legal challenge.

Kieran stressed the importance of setting out clear reasons for decisions, referencing the relevant statutory tests, and evidencing how the specific facts of a case meet those requirements. High‑risk changes should be reviewed carefully, with a robust audit trail in place.

Managing contract performance and KPIs

The final section addressed contract performance management, including new obligations to set and publish Key Performance Indicators (KPIs) for contracts over £5 million.

Attendees were guided through:

The requirement to set and publish at least three KPIs.
The annual publication of contract performance notices.
The fixed rating system, from good to inadequate.
The potential reputational impact for suppliers when performance is made public.

Kieran encouraged authorities to set KPIs that are specific, measurable and realistic, to engage with the market when developing them, and to monitor performance from the outset rather than at the end of the contract year.

Practical takeaways

Throughout the session, Kieran emphasised a practical, risk‑aware approach to contract management—encouraging procurement professionals to act as a “sieve, not a postbox” by filtering requests through the relevant legal and governance requirements rather than simply processing them.

The webinar concluded with a lively Q&A, covering issues such as thresholds, frameworks, and the calculation of percentage caps.