Defence Authority Contract

Defence procurement occupies a distinctive position in public procurement law. The strategic importance of defence capability, the sensitivity of information about military requirements, and the national security implications of supplier selection all create legitimate reasons for departing from the standard competitive rules that apply to routine government purchasing. The Procurement Act 2023 includes specific provisions for defence and security contracts that balance competitive principles against these special considerations.

What is a defence authority contract?

A defence authority contract is a contract awarded by a contracting authority for defence and security purposes that falls within the specific provisions of the Act relating to that sector. The Act replaced the Defence and Security Public Contracts Regulations 2011 (which implemented EU Directive 2009/81/EC on defence procurement) with a consolidated set of rules within the single statute.

Defence authority contracts may include: supply of military equipment and its components; supply of sensitive equipment; works, supplies, and services directly related to military equipment or sensitive equipment; and contracts involving classified information. The Act permits departures from standard competitive procedures on national security grounds, and specific provisions govern what information may be published in notices for defence contracts where disclosure would damage national security.

The supplier exclusion grounds applicable to defence authority contracts include provisions related to national security considerations that do not appear in the standard exclusion regime. A buyer may exclude a supplier on national security grounds even where mandatory exclusion grounds have not been triggered.

Why it matters for bidders

Defence procurement is a specialist market with specific security clearance requirements, export control considerations, and information governance obligations. Suppliers entering this market for the first time should expect to obtain appropriate security clearances (typically through the UK Security Vetting scheme), understand the export control implications of the technology involved, and be prepared for procurement processes that may be less publicly transparent than standard government contracts.

Where defence contracts are competed openly, they appear on Find a Tender like any other above-threshold opportunity. Where competition is restricted for national security reasons, opportunities may be advertised through restricted channels or directly to pre-approved suppliers.

Example

The Ministry of Defence requires a specialist communications system for use in operational environments. The technical specification involves classified information that cannot be published publicly. The MoD runs a restricted competition open only to suppliers with the required security clearances, using a competitive flexible procedure adapted to account for the classified elements, and without publishing the full specification in the public tender notice.

Frequently Asked Questions

Do defence contracts have different thresholds?

The Procurement Act 2023 sets specific thresholds for defence and security contracts that differ from the standard contracting authority thresholds. The applicable threshold depends on the nature of the contract (military equipment, sensitive equipment, or other defence services). Current threshold values are published on GOV.UK.

Can the MoD directly award defence contracts without competition?

Yes, in specific circumstances including genuine national security grounds. The Act provides broader direct award permissions for defence contracts than for standard government contracts, reflecting the legitimate security constraints on competition. However, direct awards still require justification and, where possible, a transparency notice.

Are overseas defence contractors subject to the same rules?

The Act does not discriminate between domestic and overseas suppliers in principle, but overseas suppliers must comply with all applicable security clearance, export control, and national security requirements. In practice, defence contracts involving classified UK information are typically restricted to suppliers with UK security clearances.