Procurement Termination Notice

Not every procurement competition ends in a contract award. Buyers sometimes decide to abandon a process before reaching the award stage, whether because the bids received were unaffordable, requirements have changed substantially, the business case has been withdrawn, or the competition was fundamentally flawed. The Procurement Act 2023 requires buyers to communicate this decision formally through a procurement termination notice, creating a transparent record that the process has ended.

What is a procurement termination notice?

A procurement termination notice is a notice that a covered buyer must publish when it decides to cancel a covered procurement competition after the tender notice has been published and before a contract is awarded. The notice must state that the procurement is being terminated and provide brief reasons for that decision.

The procurement termination notice serves two purposes. First, it informs suppliers who have submitted tenders or expressions of interest that the competition has ended and that no contract will be awarded from the current process. This allows them to stop investing resources in a bid that can no longer succeed and to seek other opportunities. Second, it creates a publicly accessible record on Find a Tender that the process was abandoned, which contributes to the overall transparency of the public procurement market and allows analysts and suppliers to understand patterns of cancelled competitions.

The Act does not restrict the grounds on which a buyer may terminate a procurement. Buyers retain the right to cancel a competition for any legitimate reason, including: receipt of no compliant tenders; all tenders exceeding the available budget; a change in the policy or funding context that removes the need for the contract; discovery of a procedural error that makes it impossible to award fairly; or a decision to restructure the requirement and re-run the competition in a different form.

Why it matters for bidders

A procurement termination notice has direct financial implications for suppliers who have invested resources in a bid. Understanding your rights in this situation is important. Generally, suppliers cannot recover bid preparation costs from a buyer that legitimately cancels a competition, even after substantial investment. The termination notice brings certainty: once published, you know the current process is over.

However, if you believe the competition was terminated improperly (for example, to frustrate a supplier who was about to win, or because the buyer received a preferred outcome from a source outside the competition), you may have grounds for a legal challenge. The termination notice itself, including its stated reasons, is the starting point for assessing whether the decision was proper.

Example

A regional transport authority runs a competitive tender for bus fleet maintenance services. After receiving tenders, it becomes apparent that all submissions significantly exceed the allocated budget due to unforeseen cost inflation in the sector. The authority publishes a procurement termination notice stating that the competition is being cancelled because no tender can be accepted within the available budget, and it immediately begins internal budget review work before deciding whether to re-run the procurement with revised specifications or a different budget envelope.

Frequently Asked Questions

Must a buyer compensate suppliers when it terminates a procurement?

Generally, no. The right to cancel a competition is a standard term of public procurement in the UK, and suppliers participate at their own cost risk. In exceptional circumstances, where a buyer's conduct during the competition was unlawful and directly caused a supplier to incur greater costs than they would otherwise have done, a claim for wasted costs may succeed. Legal advice specific to the facts is needed in these situations.

Can a buyer re-run the same procurement after issuing a termination notice?

Yes. A procurement termination notice ends the current process but does not prevent the buyer from re-running the competition with revised specifications, updated budget parameters, or a different procedure. Buyers often terminate and re-run where the first competition attracted insufficient or unsuitable responses.

Does a termination notice need to be published on Find a Tender?

Yes. Because the original tender notice was published on Find a Tender, the termination notice must also be published there, creating a complete and transparent record of the procurement lifecycle.