Procurement Act 2023: First Automatic Suspension Applications Dismissed — What This Means for Suppliers to the UK Government

The first applications to lift an automatic suspension under the Procurement Act 2023 (the Act) have recently been decided. In Parkingeye Limited v Velindre University NHS Trust & Anor [2026] EWHC 1019 (TCC), handed down on 1 May 2026, HHJ Keyser KC dismissed applications by two NHS contracting authorities to lift the suspension preventing them from concluding a car park management services contract. This is the first judicial consideration of the new test under section 102(2) of the Act.

This alert is relevant to any business that supplies, or is seeking to supply, goods or services to government and public sector bodies, whether in defence, health care, pharmaceuticals, life sciences, technology, professional services, infrastructure, facilities management, or any other regulated sector.

Which Rules Apply?

Before considering your options, it is essential to identify which procurement regime governs the contract or award in question. The Procurement Act 2023 came into force on 24 February 2025. However, a significant number of live contracts, frameworks, and ongoing procurement processes were commenced under the Public Contracts Regulations 2015 (PCR 2015) and will continue to be governed by those rules.

• If a procurement was commenced before 24 February 2025, it will almost certainly fall under the PCR 2015, not the new Act.
• If a contract was awarded under a framework established before that date, the call-off contracts may also remain within the PCR 2015 regime.
• You must check carefully which regime applies before taking any steps as the procedural rules, timelines, and tests differ materially between the regimes.

Frameworks

Many public sector contracts — particularly in health care, pharmaceuticals, defence, and professional services — are awarded via framework agreements. If you are considering a challenge in the context of a framework, there are important caveats:

• Being on a framework does not guarantee work. Framework agreements typically entitle you to participate in mini-competitions or direct awards at call-off stage, but they do not themselves confer a right to a specific contract.
• A successful challenge to a framework award may not deliver the commercial outcome you are seeking. If you successfully challenge your exclusion from a framework (or the award of the framework to others), the court may set aside the framework award, but this does not automatically mean you will win the underlying call-off contracts. You may need to go through a further competitive process.
• The suspension regime applies differently to frameworks. Whether the automatic suspension bites on the conclusion of a framework itself, as opposed to individual call-off contracts, requires careful analysis.

Why Automatic Suspension Matters

Where a supplier issues proceedings under Part 9 of the Act during the standstill period, the contracting authority is prohibited from entering into the awarded contract under section 101(1). The suspension preserves the possibility of pre-contractual remedies, such as setting aside the award and requiring a re-run of the competition. The contracting authority may apply to the court under section 102 to lift or modify the suspension. In practice, such applications have historically often succeeded. This judgment changes that picture significantly.

The New Test

Under PCR 2015, the applicable test was drawn from American Cyanamid Co v Ethicon Ltd [1975] A.C. 396. Around two-thirds of applications to lift the suspension were historically decided in favour of contracting authorities.

Under section 102(2) of the Act, the court must now have regard to the following:

• The public interest in (i) upholding the principle that public contracts should be awarded in accordance with the law, and (ii) avoiding delay in supply (for example, in respect of defence or security interests or the continuing provision of public services).
• The interests of suppliers, including whether damages are an adequate remedy.
• Any other matters the court considers appropriate.

HHJ Keyser KC held that the new test is “substantively and not merely formally very different, in both its method and its effect, from the former test.”

The adequacy of damages “no longer has the significance it had under the American Cyanamid test”. Lifting the suspension “will generally require, on the particular facts of the case, the presence of either a very persuasive countervailing public interest or some overriding matter of private interest.”

In Parkingeye, the judge found that “it does not seem to me … that difficulties of assessment of damages would render it unjust to confine the respondent to a remedy in damages”, yet the applications to lift the suspension were still dismissed. That result would have been highly unlikely under the old test.

This shift is particularly significant for suppliers in sectors where damages are inherently difficult to quantify, for example, a pharmaceutical company that loses out on a multi-year NHS supply contract, or a technology supplier excluded from a major digital transformation programme.

The Countervailing Public Interest

Section 102(2)(a)(ii) expressly refers to defence and security interests as examples of delay in supply that may weigh in favour of lifting a suspension. However, the judge was clear that “the particular instances of public interest identified in the parenthesis in section 102(2)(a)(ii) are of serious matters, such as interference with defence or security or the interruption of public services, rather than merely a public interest in contracting authorities acting in accordance with their own judgement as to where their and the public's advantage lies.”

The same principle applies across sectors:

• An NHS trust that asserts a new pharmaceutical supply contract is urgently needed will need to demonstrate genuine risk to patient safety or continuity of care — not simply that the new contract offers improved terms.
• A government department arguing that a technology or infrastructure contract is operationally critical will need cogent evidence of real disruption, not merely preference for the new supplier.

Exaggerated or unsubstantiated urgency arguments by contracting authorities are now much more exposed to challenge.

Practical Steps for Suppliers

The early stages are particularly critical as many suppliers lose the ability to challenge effectively because they act too late or fail to preserve their position properly.

Stage 1: Before the Award Decision

• Engage actively and record everything. From the moment you identify anything in the process that gives cause for concern, whether in the specification, the evaluation methodology, the scoring, or communications from the contracting authority, begin documenting it. Keep contemporaneous records of all interactions, clarifications requested, and responses received. This contemporaneous record will be invaluable if you need to challenge.
• Use the available information rights proactively. Under the Act, suppliers have enhanced rights to request information at various stages. If you receive an assessment summary or award notice that raises concerns, submit a written request for additional information and supporting evidence immediately. Do not wait to see whether informal discussion resolves the issue — time limits begin to run regardless.
• Check whether the procurement is governed by the Act or the PCR 2015. As noted above, this is a threshold question. The procedural steps, timelines, and applicable tests differ. If in doubt, take legal advice early.
• If you are on a framework, consider whether you are challenging the framework itself or a call-off. These are legally distinct. Challenging inclusion in or exclusion from a framework, versus challenging an individual call-off decision, require separate analysis. Be clear about what you are challenging and what the realistic remedy would be.

Stage 2: The Award Decision

• Review the assessment summary and award notice the moment they arrive. Set-aside proceedings must commence within 30 days of when the supplier first knew, or ought to have known, of the circumstances giving rise to the claim, and no later than six months after contract conclusion. Assessment summaries and award notices must be reviewed immediately on receipt. Do not allow these documents to sit in an inbox. They should be escalated internally and to legal advisers on the day of receipt.
• Request a debrief without delay. A debrief will provide further information about the evaluation of your bid and that of the successful supplier. It may reveal grounds for challenge that are not apparent from the award notice alone. Request the debrief immediately and attend it prepared with specific questions about scoring and methodology. Record the debrief in writing.
• Identify your grounds early. Potential grounds for challenge include: manifest error in the evaluation of your bid; failure to comply with the stated evaluation criteria; apparent bias or procedural irregularity; lack of transparency; and changes to the specification or criteria after the process began. Not all concerns will give rise to viable legal grounds — early legal advice will help you filter and prioritise.
• Issue proceedings during the standstill period if you intend to suspend. The automatic suspension only arises where proceedings are issued during the applicable standstill period (eight working days under section 51). Preparation must begin before the award decision arrives. Your legal team should be briefed and instructed before the award notice lands so that proceedings can be issued within the standstill window if needed.

Stage 3: After Proceedings Are Issued

• Scrutinise the contracting authority's evidence of operational impact and challenge formulaic assertions of urgency. A supplier should gather evidence addressing whether existing services can continue during the suspension and whether the specific benefits of the new contract could be replicated or matched by the incumbent during the suspension period.
• Advance your preference for performance. The judge accepted that a claimant supplier “may legitimately prefer performance to compensation” and that “this is a matter to be taken into account.” Evidence of the genuine commercial and operational significance of the contract should be adduced. This is particularly relevant for suppliers in sectors where the contract represents a reference site, a pipeline of follow-on work, or a strategic relationship that cannot readily be replicated through a damages award.
• Consider offering an undertaking in damages. The court treated the claimant's offer as a relevant factor that reduced weight given to the contracting authority's claimed prejudice.

Conclusion

This judgment represents a significant and favourable recalibration for suppliers. The automatic suspension is now a considerably more robust protection for aggrieved bidders than it was under the PCR 2015. The public interest in lawful procurement weighs, from the outset, in favour of maintaining the suspension. Adequacy of damages is no longer a single point of failure.

For any supplier providing goods or services to government, the Parkingeye judgment materially improves the prospects of maintaining a suspension pending trial. Contracting must now demonstrate genuine and cogent evidence of operational harm from delay and not merely assert that their preferred contract delivers better value.

For further information or advice on procurement challenges and the automatic suspension regime, please contact Nicola Phillips and Emma Wright.