A direct award is when a public sector buyer awards a contract to a supplier without running a competition. Under the Procurement Act 2023, this is only allowed in limited, justified circumstances. For suppliers, understanding direct awards matters for two reasons: they explain how some contracts bypass open competition, and they create a route to challenge awards that are not properly justified. This guide explains how direct award works and what it means for you.
Most contracts are still awarded competitively, through routes like the competitive flexible procedure or the open procedure. Direct award is the exception, not the rule.
What is a direct award?
A direct award lets a buyer enter into a contract with a chosen supplier without inviting other suppliers to compete. Because it removes competition, the Procurement Act 2023 keeps the grounds tightly drawn. A buyer can only make a direct award where the Act specifically permits it.
There are three routes. Section 41 allows one where a justification in Schedule 5 applies. Section 42 allows Ministers to permit direct awards by regulation, for example to protect life. Section 43 allows a buyer to switch to a direct award when a competition produced no suitable tenders.
When can a buyer make a direct award?
The Schedule 5 justifications are specific. They are meant for genuinely exceptional situations, not for avoiding competition. Common grounds include:
- Only one suitable supplier. For example, where there are technical reasons, exclusive rights, or a unique work of art.
- Extreme and unavoidable urgency. Where the urgency could not have been foreseen and was not caused by the buyer.
- Prototypes and novel goods or services. Where the contract is for research, testing or development.
- Repeat or additional works. Continuing supplies where switching supplier would cause serious difficulty.
- User choice services. Certain light-touch services, such as personal social care.
A buyer cannot award to an excluded supplier unless there is an overriding public interest, such as protecting critical national infrastructure. To understand exclusion, see our guide to the debarment regime.
The transparency notice: your window to challenge
This is the part suppliers should know best. Before making a direct award under Section 41 or 43, a buyer must publish a transparency notice. This notice states the buyer’s intention to award directly and explains the justification. It appears on the Central Digital Platform for anyone to see.
The transparency notice exists so interested parties can scrutinise the decision. If you believe a direct award is not properly justified, this is your opportunity to challenge it. However, the clock is tight — you generally have 30 days from when you knew, or ought to have known, of the circumstances to bring a claim. Reviewing transparency notices regularly is therefore worth building into your routine.
What direct award means for suppliers
These awards can feel frustrating, because a contract goes to a competitor without you getting a chance to bid. But there are practical takeaways. Being an incumbent, or a known and trusted supplier, increases your chances of being the “only suitable supplier” in genuine cases. Our guide on winning a bid as the incumbent explores this further.
Equally, most such awards trigger a mandatory standstill period of eight working days before the contract is signed. That standstill period gives you time to review the justification and act if needed. The exception is extreme urgency, where the standstill may not apply.
Frequently asked questions
Is a direct award legal under the Procurement Act 2023?
Yes, but only in limited, justified circumstances set out in the Act. A buyer must rely on a Schedule 5 justification under Section 41, a Ministerial regulation under Section 42, or the switching provision under Section 43.
Does a buyer have to advertise a direct award?
For most direct awards under Section 41 or 43, the buyer must publish a transparency notice before awarding the contract, explaining the justification. User choice contracts are an exception.
Can I challenge a direct award?
Yes. The transparency notice gives interested suppliers the chance to scrutinise the justification. You generally have 30 days from when you knew, or ought to have known, of the circumstances to bring a claim.
What is the difference between direct award and switching to direct award?
A direct award under Section 41 relies on a Schedule 5 justification from the outset. Switching to direct award under Section 43 happens only after a competition has been run but produced no suitable tenders.
Stay ahead of direct awards in your market
Understanding direct awards helps you protect your position and spot opportunities. If you would like help monitoring notices, challenging unfair awards, or winning competitive work, our team can support you. Get in touch with Together: The Hudson Collective to start winning more, faster.
Source: GOV.UK — Direct Award guidance. This article is for general guidance and does not constitute legal advice.