Contract performance notices – the sting in the tail of the Procurement Act 2023

Picture the scene. It is 2027. You are the UK Sales Director for Twiglen Tech Limited, and have been seeing strong growth delivering IT implementations to Government and local authority customers. You are set for a record year. There is just one problem, and you are slightly dreading the Teams call at 3pm.

The Teams call is with Alex, the account manager for what has become known in the company as the ‘Problem Client’. You console yourself with the fact that for Twiglen, it is only one. Most of your competitors have several. Generally Twiglen is great at delivery, but for Anyshire Authority, it seemed as though the odds were against you from the start.

Maybe Alex was a bit optimistic in the bid process with how many resources were needed on the account. Maybe the roll out timetable was just too short.

You join the call. Alex looks very pale.

“I’m sorry.” Not a good opener.

“We haven’t been able to fix the issues. The implementation is six month’s late. We told the customer in the escalation meeting last month that we would show improvement by now, but it just isn’t happening. I met them this morning. They are going to publish a notice.”

A notice? What notice?

“They say it is called a contract performance notice. Anyshire say they are legally required to publish. All our customers will be able to see it. They gave me a draft. It’s pretty bad – it sets out details of everything we haven’t delivered on.”

The Problem Client was always going to be a problem, but publicising it was bad.

“But that’s not the worst of it. I looked it up. When they publish this notice, Twiglen becomes something called an ‘excludable supplier’. This isn’t just about the Problem Client any more.”

How could it get worse?

“Once they’ve published, any of the UK public sector customers we’ve won recently can terminate their contracts – it doesn’t matter if we’ve agreed a minimum term. And whenever we bid for new UK public sector work for the next five years this will get looked at and we might not be permitted to submit a tender.”

It’s lucky that you are sitting down. The reputation and whole UK public sector business of Twiglen is now at risk. Problem Client has just become a disaster. Why did no one mention this before?

You go in search of whisky, and the phone number of the chairman of the Board…

Whilst the characters above are fictitious (and any resemblance to real people or organisations is purely coincidental), the legal impact of the contract performance notice isn’t. If you are a supplier to the UK public sector, talk to our procurement team about ways to prevent this being your story!

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