Q&As

If a contractor to a public contract awarded under the Public Contracts Regulations 2015 later merges with a third party, can the contracting authority novate the contract to the new entity? Are there any specific regulatory requirements or best practices for contracting authorities in this situation? Do the same rules apply for contracts awarded under the Public Contracts Regulations 2006?

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Published on: 18 May 2017
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In answering this Q&A, we have limited our research to cover public procurement under the Public Contracts Regulations 2015, SI 2015/102 (PCR 2015).

Modification of public contracts

A merger situation may result in the identity of a contractor being amended, requiring agreements with that contractor to be novated to a new vehicle. In the case of a public contract, replacement of the contractor will be treated as a modification of the contract for the purpose of the PCR 2015, SI 2015/102. Under these rules, substantial modification to a public contract may, in effect, result in the award of a new contract which requires a new public procurement process to be undertaken.

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Jurisdiction(s):
United Kingdom
Key definition:
Authority definition
What does Authority mean?

The public sector body procuring the project. This might, for example, be a local authority, an NHS trust, a central Government Department or a Non-Departmental Public Body.

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