Procurement Act 2023: Court Signals Tougher Scrutiny of Direct Awards

Key Points

• The Technology and Construction Court has refused to strike out a procurement challenge brought by Apasen Limited against the London Borough of Tower Hamlets.
• The case, Apasen Limited v London Borough of Tower Hamlets [2026] EWHC 2239 (TCC), concerns interim domiciliary care contracts awarded directly after a competitive procurement process was abandoned.
• The council relied on the direct award ground of “extreme and unavoidable urgency” to justify its decision.
• The court’s interim decision indicates that contracting authorities may face scrutiny over whether their reasons for bypassing competition are supported by the underlying facts.
• The judgment raises questions about whether inaccurate contract award notices could be treated as having no legal effect for the purposes of the statutory regime.
• The court also considered it arguable that the contract award notice itself should contain the relevant justification for a direct award, rather than relying solely on a separate transparency notice.
• The substantive legality of the disputed awards has not been determined by this decision.
• Public authorities may need to strengthen their evidence, documentation and notice-checking procedures, while suppliers may see greater scope to challenge awards they consider unlawful.

The most significant development is the court’s refusal to strike out the claim, allowing the procurement challenge to proceed beyond that preliminary stage. The decision highlights potential legal risks surrounding direct awards, the justification for urgency and the accuracy and completeness of procurement notices under the Procurement Act 2023.

Extra London News (ELN) October 12, 2026 – The High Court has delivered an early indication of how procurement disputes may be assessed under the Procurement Act 2023, after refusing to strike out a claim challenging direct awards of interim domiciliary care contracts by the London Borough of Tower Hamlets. In Apasen Limited v London Borough of Tower Hamlets [2026] EWHC 2239 (TCC), handed down on 28 August 2026, the Technology and Construction Court considered arguments concerning the statutory conditions for setting aside public contracts, the use of extreme and unavoidable urgency as a justification for direct awards, and the adequacy of procurement notices. The court did not decide the underlying challenge to the awards, but its ruling leaves the relevant arguments open for further consideration. The judgment is significant for public authorities and suppliers navigating the new procurement framework.

What did the High Court decide in the Tower Hamlets procurement dispute?

The Technology and Construction Court, part of the High Court of Justice, considered an application by the London Borough of Tower Hamlets to strike out part of Apasen Limited’s claim. The council sought to prevent the charity from pursuing remedies that could result in the setting aside of interim contracts awarded to other service providers.

According to the published judgment, the application was heard on 31 July 2026 before Mr Roger ter Haar KC, sitting as a deputy High Court judge. The judgment was handed down on 28 August 2026 under case number HT-2025-000267.

The council argued that the statutory conditions required for setting aside the contracts under section 105 of the Procurement Act 2023 were not met. Apasen disputed that position, alleging that the council’s direct awards and the associated notices did not comply with the new statutory framework.

The court’s refusal to strike out the relevant claim means that the challenge was not dismissed at that preliminary stage. It does not, however, establish that the council acted unlawfully or that the contracts must be set aside.

That distinction is important for public bodies, suppliers and legal advisers. A decision that allows a claim to continue is not the same as a final judgment on the lawfulness of a procurement decision.

How did the dispute over domiciliary care contracts arise?

The dispute originated in a competitive procurement exercise launched by Tower Hamlets for domiciliary care services. The council published an initial contract notice on or around 19 July 2023, dividing the procurement into four geographical lots covering the north-west, south-west, north-east and south-east of the borough.

Apasen, a registered charity providing social care and community support services in east London, submitted tenders for two areas. The judgment records that the charity was unsuccessful for one area and initially successful for another, although the award for the latter was made conditional on the outcome of an audit conducted by the council.

The process subsequently became the subject of challenges from Apasen and other tenderers. The council informed tenderers on 6 November 2024 that it had decided to abandon the original procurement.

The judgment also records that the council commissioned PricewaterhouseCoopers to investigate allegations raised through whistleblowing and to conduct a forensic review of its contractual relationship with Apasen. An investigation commissioned by Apasen had not upheld the allegations, according to the judgment’s account of the background. The existence of allegations should not be treated as proof of wrongdoing.

Following the abandonment of the competitive process, the council moved to interim arrangements for domiciliary care. It subsequently relied on extreme and unavoidable urgency as the justification for directly awarding contracts to service providers.

The resulting arrangements became the subject of a separate legal challenge under the Procurement Act 2023. Apasen argued that the statutory requirements for direct awards had not been satisfied and that deficiencies in the notices affected the legality of the contracts.

Why is the extreme and unavoidable urgency justification important?

The Procurement Act 2023 establishes competitive tendering as the usual route for awarding public contracts, while permitting direct awards in specified circumstances. One of those grounds concerns contracts that are strictly necessary because of extreme and unavoidable urgency.

The Cabinet Office’s official Guidance: Direct Award, updated on 13 July 2026, explains that the urgency justification is not a general exemption from competition. The circumstances must be sufficiently urgent that the authority cannot award the contract through a competitive procedure, including an applicable shortened procedure. The urgency must also be unavoidable and not attributable to an act or omission by the authority, or something it could have foreseen.

These requirements matter because public authorities must balance the need to respond quickly to urgent service requirements against their statutory obligations to maintain fair competition and transparency.

Domiciliary care contracts can involve services provided to people who depend on assistance in their own homes. Interim arrangements may therefore need to address continuity of service while a longer-term procurement is unresolved. However, the importance of continuity does not automatically establish that every condition for a direct award has been met.

The legal question is whether the particular circumstances satisfy the statutory test, rather than whether an authority considers a direct award to be the most convenient option.

In the Tower Hamlets case, the parties disputed whether the council could properly rely on the urgency provisions. The court’s decision at the strike-out stage did not finally determine that issue. Instead, the claim was allowed to remain in contention rather than being dismissed on the basis advanced by the council.

For contracting authorities, the distinction reinforces the need to document the circumstances that made competition impracticable and explain why the contract awarded was strictly necessary to address the urgency.

Can an inaccurate contract award notice expose a public authority to a legal challenge?

The accuracy of procurement notices is another central issue raised by the case.

Under section 50 of the Procurement Act 2023, a contracting authority must generally publish a contract award notice before entering into a public contract. Section 44 and the associated regulations establish requirements for transparency notices in applicable direct award procedures. The information published must comply with the relevant statutory requirements.

The judgment raises the question of whether a notice that contains a material error can be treated as failing to meet the statutory requirement, rather than being accepted simply because a document was published.

That issue may be important where a contracting authority publishes a notice but the information in it does not accurately explain the legal basis for the award.

A notice can serve a practical purpose only if suppliers and other interested parties can understand the authority’s decision and assess whether it complies with procurement law. If the published information is incomplete or inconsistent with the underlying facts, interested parties may question whether the authority has fulfilled its legal obligations.

The distinction is not merely administrative. Procurement notices can affect the information available to suppliers, the timing of challenges and the operation of statutory remedies.

Nevertheless, the case should not be read as establishing that every minor error automatically invalidates a notice. The legal significance of an alleged defect depends on the applicable statutory requirements and the circumstances of the individual procurement.

The key issue is whether the notice satisfies the law, not simply whether it appears on the relevant procurement platform.

Why must the justification appear in the contract award notice itself?

A further issue concerned the relationship between the transparency notice and the contract award notice.

A transparency notice announces an intention to make a direct award and gives interested parties an opportunity to consider the stated justification. A contract award notice serves a separate function by informing the market of the intended contract award and providing the information required by the legislation.

The Cabinet Office’s guidance confirms that, for applicable direct awards, the transparency notice must precede the contract award notice. The contract award notice must also provide the relevant information about the justification for the direct award.

In the Apasen proceedings, the claimant challenged the adequacy of the notices published by the council. One of its arguments was that the contract award notice did not contain the relevant direct award justification, even though the council relied on a transparency notice that addressed the issue.

The court considered it arguable that the justification needed to appear in the contract award notice itself. That point is important because it raises the question of whether compliance with one notice requirement can compensate for a deficiency in another.

The issue remains subject to the limits of the decision. The court did not finally establish, through a substantive determination of the procurement challenge, that the disputed notices were invalid. Instead, the argument was sufficiently arguable that it was not dismissed at the preliminary stage.

For authorities, the practical lesson is to assess each notice against its own statutory requirements. A complete transparency notice should not be treated as a substitute for information that the law requires to be included in the subsequent contract award notice.

What are the legal requirements for direct awards under the Procurement Act 2023?

The Act introduced a procurement framework that places transparency and statutory justification at the centre of public contracting.

Under the direct award provisions, contracting authorities must identify an applicable legal ground before awarding a contract without competition. Depending on the circumstances, the relevant route may involve section 41 and a justification in Schedule 5, section 42 or section 43 of the Act.

For direct awards based on extreme and unavoidable urgency, the authority must be able to demonstrate that the relevant conditions are satisfied. The contract must be strictly necessary to address the urgent circumstances, and the authority must be unable to use a competitive tendering procedure within the available time.

The legislation also imposes notice requirements. In applicable cases, a transparency notice must be published before the direct award proceeds, followed by the contract award notice and the relevant subsequent notice, subject to the statutory exceptions.

The contract award notice generally initiates an eight-working-day standstill period. However, the Act provides exceptions, including for direct awards made under the extreme and unavoidable urgency ground. Authorities may still choose to observe a voluntary standstill period where the legislation permits it.

These requirements mean that procurement compliance involves more than selecting a plausible legal justification. Authorities must also follow the correct procedure, publish the necessary information and ensure that their actions are consistent with the basis on which the contract is awarded.

The Apasen dispute illustrates how those requirements can become important in litigation where a supplier questions both the underlying justification and the accuracy of the notices.

What does the ruling mean for public authorities and procurement officers?

For public authorities, the case highlights the importance of maintaining a clear evidential record whenever a direct award is proposed.

Procurement officers should be able to identify the circumstances giving rise to urgency, explain why the situation could not reasonably have been anticipated and demonstrate why the ordinary competitive process cannot be completed in time.

They should also record why the scope and duration of an interim contract are limited to what is necessary to address the urgent circumstances. Where a longer-term requirement remains, the authority should consider the appropriate procurement route for meeting that need.

Notice preparation requires a separate compliance check. Authorities should ensure that the transparency notice and contract award notice each contain the information required by the legislation and accurately describe the decision being taken.

The Cabinet Office’s guidance specifically states that a contract award notice must accurately reflect the contract to be awarded. Where the notice does not do so, it may need to be republished, with a new standstill period observed where required.

In practical terms, this points to the value of coordination between procurement teams, legal advisers and officers responsible for the underlying service. The evidence supporting the decision, the contract terms and the published notices should be consistent.

The judgment does not establish a new universal rule that every disputed direct award is unlawful. It does, however, show why authorities should not assume that the publication of a notice or the use of an urgency label will, by itself, resolve a legal challenge.

How could the judgment affect suppliers and unsuccessful tenderers?

Suppliers may regard the decision as a reminder that procurement decisions can be challenged on more than one basis.

A supplier that believes a public contract has been awarded unlawfully may examine whether the authority selected a valid statutory justification, whether the facts support that justification and whether the required notices were published accurately.

The case is particularly relevant where an authority abandons a competitive procurement and subsequently awards interim contracts directly. Suppliers affected by such decisions may seek to establish whether the new arrangements comply with the statutory conditions.

However, suppliers must still consider the applicable legal requirements, available evidence, time limits and remedies. The fact that a court has allowed a claim to continue does not guarantee that the claimant will succeed at a later stage.

The Procurement Act 2023 contains specific rules governing procurement challenges and the circumstances in which contracts may be set aside. The outcome of a claim therefore depends on the statutory conditions and the facts established in the proceedings.

For suppliers, the practical implication is that procurement notices and award decisions deserve careful scrutiny, but challenges should be based on identifiable legal or procedural defects rather than the mere fact that an authority has chosen a direct award.

What should contracting authorities do to reduce procurement litigation risks?

Authorities can draw several practical lessons from the dispute without assuming that the court has conclusively determined every contested issue.

First, they should document the evidence supporting the selected direct award ground before proceeding. Where extreme and unavoidable urgency is relied upon, the record should explain the urgency, its origin and why a competitive procedure is not feasible within the available time.

Second, the authority should establish that the contract is limited to what is strictly necessary to respond to the urgent situation. Any longer-term requirement should be considered separately under the appropriate procurement process.

Third, procurement notices should be checked for accuracy and completeness against the legislation. This includes confirming that the stated justification matches the evidence and that the contract award notice contains the required information rather than relying on a separate notice to fill a gap.

Fourth, authorities should retain a clear record of the procurement decision, the relevant evidence, the notices published and the reasons for the approach adopted. Such records can help demonstrate how a decision was reached if it is challenged.

Finally, procurement officers should ensure that legal advice is obtained where the statutory basis for a direct award is uncertain, particularly where the decision follows an abandoned competition or affects existing suppliers.

These steps cannot eliminate the possibility of litigation. They can, however, help authorities identify weaknesses before publication and make their decisions easier to explain and defend.

Background: How does the Procurement Act 2023 change public procurement?

The Procurement Act 2023 provides the principal statutory framework for covered public procurement in England, Wales and Northern Ireland, subject to the legislation’s territorial scope and applicable exceptions. The new regime came into force on 24 February 2025.

The legislation established updated procedures for competitive tendering, direct awards, contract award notices, transparency and supplier challenges. It also introduced a more structured system of notices intended to improve the information available to suppliers and other interested parties.

The Tower Hamlets dispute arose during the transition to the new regime. The original competitive procurement began in 2023, before the new Act came into force, and was subsequently abandoned in November 2024. The later interim arrangements and the legal arguments concerning them brought the new legislation into focus.

The case is therefore relevant not only because it concerns domiciliary care contracts, but also because it offers an early judicial examination of how the Act’s requirements may be argued in a contested procurement.

The distinction between an interim ruling and a final decision remains essential. The judgment identifies issues that can be litigated under the new framework, but the substantive legality of the disputed awards was not conclusively determined by the refusal to strike out the claim.

Prediction: How could the ruling affect public bodies, suppliers and care providers?

The likely practical effect is greater attention to the evidence and documentation supporting direct awards, particularly when authorities rely on urgency to avoid a competitive procedure.

For public bodies, the case may encourage more rigorous internal checks of the statutory justification, contract scope and information published in procurement notices. Authorities managing essential services may need to balance the need for continuity against the obligation to demonstrate that the legal conditions for direct awards are satisfied.

For suppliers, the decision may reinforce the importance of reviewing award notices and identifying potential defects promptly. It could also encourage suppliers to seek legal advice where they believe an authority has relied on an insufficient justification or failed to comply with notice requirements.

For domiciliary care providers, the implications concern the procurement arrangements through which councils commission services. Disputes over interim contracts can affect the certainty of contractual arrangements and the competitive position of providers, although the judgment itself does not establish that the Tower Hamlets contracts must be set aside.