In Competition… Competition & Public Procurement Law: October 2026 Update
November 2026Welcome to the fifteenth edition of In Competition.
Two October publications will shape bids for years. The Ministry of Defence published an offset regime under which selected defence awards from April 2027 bring a second contract the winning bidder cannot refuse, and the Cabinet Office told evaluators how social value will be scored from January. Both turn promises made at bid stage into monitored obligations.
In the courts and at the CMA, the outcome turned on which rulebook applied. The TCC kept a Home Office award suspended under the 2015 Regulations. The Court of Appeal held that an undisputed breach of a mandatory licence condition did not require a prior hearing; the Procurement Act 2023, by contrast, gives a supplier facing exclusion a statutory opportunity to respond. The CMA proposed bringing Microsoft within the digital markets regime, potentially leading to designation as having strategic market status, and opened a Competition Act case against Meta, which that regime cannot yet reach. In Edinburgh, a merger challenge filed a day late stayed out of time.
Public procurement
Ministry of Defence UK Offset Policy: a second contract alongside selected defence awards (30 October 2026)
The policy will apply to a select number of procurements from April 2027. It covers defence and security acquisitions, with a default trigger of £50 million that may be raised or lowered, involving non-UK suppliers, or UK-registered suppliers with significant overseas value or production, where the Offset Authority finds offset “lawful, proportionate and strategically justified” (sections 2.1.1 and 2.1.3, UK Offset Policy). Offset requires the selected supplier to invest benefits back into the UK, for example through new jobs and apprenticeships, opening UK factories, or investing in domestic suppliers.
Where offset has been notified in the procurement, the selected supplier “may not refuse to sign” an Offset Agreement as a condition of award, and the main contract waits until it is in place (sections 2.2.2 and 2.2.4, UK Offset Policy). The standard commitment is 100 per cent of contract value, but the policy is inconsistent about the base: section 2.2.4 uses the procurement contract value (“whole-contract base”), including where it increases post contract award (e.g. via scope extensions, extension of time provisions), whereas section 3.1 refers to the eligible foreign contract value and to the eligible procurement contract value (“foreign-content base”), and the policy does not define the value to which the percentage applies. Compensation for a missed milestone “shall normally be not less than 10 per cent of the unfulfilled value”, a bank guarantee may be required, and serious breach may lead to exclusion (sections 3.14 and 6.2, UK Offset Policy).
Why does this matter?
Offset applies only where the MoD is “lawfully able to require” it (section 1.1, UK Offset Policy). Article IV:6 of the WTO Government Procurement Agreement prohibits offsets in covered procurement. Coverage decides whether the offset policy can apply, acquisition by acquisition, and the policy does not say which are covered. On a £500 million programme the difference between a whole-contract base and a foreign-content base is the size of the obligation. Before pricing a 2027 bid, a supplier with overseas content needs a view on which base will be used, who will deliver the offset projects, and what the guarantee will cost. Those issues are worth exploring with the Offset Authority during the procurement.
Source: MoD, UK Offset Policy, 30 October 2026; MoD and HM Treasury press release, 30 October 2026
Guidance on PPN 026: evaluators told not to score the quantity (28 October 2026)
We reported PPN 026 in August. The Cabinet Office’s guidance on the new Social Value Model, which applies to central government covered procurements of £1 million or more commenced on or after 1 January 2027, sets minimum social value weightings of 10 per cent, rising to 20 per cent on contracts of £5 million or more, and contains one instruction bidders should read first. Evaluators “should not score the quantity of what a supplier has committed to” (section 4.3); the quantities instead become contractual commitments monitored in delivery. Annex A includes an exception: on contracts of £5 million or more an authority may, case by case and only after legal advice, score volume under sub-criterion 1a, creating high-quality jobs including apprenticeships, where that would not create a barrier for SMEs, VCSEs or treaty state suppliers. Those contracts should carry at least one social value KPI, reported through contract performance notices. Where a performance failure reaches the point at which information must be published under section 71(5), the discretionary exclusion ground in paragraph 12(4) of Schedule 7 becomes available in future procurements.
Why does this matter?
With weightings at that level the temptation to over-promise is obvious, but under the default model committing to greater volume earns no additional marks while creating a contractual obligation whose performance may need to be monitored and reported. A weak annual KPI is not of itself an exclusion ground; a published performance failure can be. The bid team’s task is therefore a method statement that scores at the top band while committing only to what the business and its supply chain can evidence, with each figure tested against the delivery data that will be collected and, where required, reported. For authorities, the jobs exception is the part most likely to be challenged, because scoring volume is a judgment that the market can bear it, and the reasoning must exist before the procurement starts.
Source: Cabinet Office, Guidance on using PPN 026: The Social Value Model, 28 October 2026
PAL Aerospace Ltd v Secretary of State for the Home Department [2026] EWHC 2786 (TCC): unanswered evidence keeps the suspension in place (published 29 October 2026)
PAL is the incumbent on the Home Office’s aerial surveillance contract for small boat crossings, which expires on 30 November 2026. DEA Aviation won on price; PAL says DEA’s bid did not comply with the specification and should have been excluded. Because the procurement began before the Procurement Act 2023 came into force, the 2015 Regulations govern it: PAL’s claim, issued on 17 July, triggered the automatic suspension under regulation 95, and the court refused to lift it. There was “no real answer” to the incumbent’s witness evidence (paragraph 39), whereas the Home Office’s evidence of harm was “expressed in general terms” (paragraph 43). Maintaining the suspension “avoids the risk that the public purse will have to pay twice” (paragraph 51). An expedited trial begins on 7 December 2026.
Why does this matter?
Specific, unrebutted evidence from the challenger beat general assertions of operational urgency, even on a border security contract. Timing did much of the work: issuing in July against a November expiry left room for a December trial, which removed the authority’s strongest argument. For procurements under the Procurement Act 2023 the court applies a different statutory test in section 102, and Parkingeye, which we reported in May, indicates that the public interest in lawful procurement will generally favour keeping the suspension. On either test, authorities with generalised evidence are exposed. For a bidder facing a tight expiry date, the sequencing of issue, evidence and trial date is where the application is won.
Source: PAL Aerospace Ltd v SSHD [2026] EWHC 2786 (TCC)
R (TJ Trading Express Ltd) v Secretary of State for the Home Department [2026] EWCA Civ 1368: the narrow case in which no hearing is required (29 October 2026)
The Court of Appeal upheld the revocation of a sponsor licence without first inviting representations. The relevant statutory guidance a licence “will” be revoked in the relevant circumstance, the rule was “hard-edged” (paragraph 74), the breach “indisputable” (paragraph 75), and representations could only have gone to mitigation, which the Home Secretary “was under no obligation to consider” (paragraph 76).
Why does this matter?
Its significance for procurement lies in how narrow it is. Where a breach is disputed, a ground calls for judgment or the consequence is not fixed in advance, the case for prior representations is at its strongest. For supplier exclusion on an authority’s own assessment the Procurement Act 2023 settles the point: section 58(2)requires a reasonable opportunity be afforded to suppliers to make representations and provide evidence, and the statutory question includes whether the circumstances are continuing or likely to occur again. A section 58 response answers a limb of the test rather than pleading mitigation, and should be drafted as one.
Source: R (TJ Trading Express Ltd) v SSHD [2026] EWCA Civ 1368
Competition enforcement and merger control
Aramark Ltd v Competition and Markets Authority [2026] CSIH 44: a merger challenge filed one day late (7 October 2026)
Aramark acquired 90 per cent of Entier, the Aberdeen offshore caterer, in January 2025 without clearance, and on 15 January 2026 the CMA required a sale. The four-week period for a review application under section 120 of the Enterprise Act 2002 expired at 5pm on 12 February. The application was filed at 12.02pm on 13 February, on a misreading of rule 112 of the Tribunal Rules, and the Tribunal refused to extend time. On 7 October the Inner House refused Aramark’s appeal, declining to relieve a sophisticated client of its advisers’ error: a party which leaves filing to the last day “courts disaster” (paragraphs 35 and 51). By directions dated 23 October the CMA extended the divestiture period into 2027, recording Aramark’s intention to seek permission to appeal to the Supreme Court.
Why does this matter?
Two clocks run against the acquirer of a completed deal: the remedy clock, which kept running throughout, and a four-week review clock that does not forgive. For energy services and infrastructure businesses completing ahead of review, the filing deadline belongs in the deal timetable from the day the final report is due.
Source: Aramark Ltd v CMA [2026] CSIH 44; CMA case page, Aramark / Entier merger inquiry
CMA opens a Chapter II investigation into Meta’s terms for business content (30 October 2026)
The CMA opened a Competition Act 1998 investigation into Meta Platforms, Inc., Facebook UK Limited and Facebook Ireland Limited over terms that would let Meta collect content from business and publisher websites and use it to develop its own products, including AI features, with no choice for the business. Meta paused the roll-out on 28 October. The CMA will assess whether Meta is dominant in a UK market and, if so, whether the terms are an abuse. Its press release records that its digital markets powers are limited because Meta has no strategic market status designation, and that interim measures are available. No assumption should be made that the law has been infringed.
Why does this matter?
Unfair trading terms are rarely run as a standalone abuse in the UK. Chapter II needs no designation and carries interim measures, so the gap in the digital markets regime has not left the CMA without a route. Businesses and publishers affected by the proposed terms should consider providing evidence; the CMA’s initial information-gathering phase is expected to continue into January 2027. Whether engaging serves the business’s commercial relationship with the platform is usually the harder question.
Source: CMA case page, Meta’s commercial terms, 30 October 2026
CMA proposes strategic market status for Microsoft’s business software ecosystem (update, 16 October 2026)
We reported the opening of this investigation in May. The CMA has now published its proposed decision, with a roadmap of possible interventions. Consultation closes at 5pm on 13 November 2026; the final decision is due by 13 February 2027.
Why does this matter?
A designation is not a finding of infringement. It would give the CMA power to impose conduct requirements in the areas the roadmap identifies for further work. Customers with evidence of restrictive licensing, switching costs or technical barriers, including public sector buyers, have until 13 November to influence both the designation and the CMA’s later priorities.
Source: CMA case page, Microsoft’s business software ecosystem
CMA fines Wayfair, Appliances Direct and Gold’s Gym under its direct consumer enforcement powers (14 October 2026)
The CMA fined three businesses £6 million in total under the Digital Markets, Competition and Consumers Act 2024: Wayfair £4.8 million for time-limited deals whose prices held or fell after the countdown; Appliances Direct £1.2 million for automatically opting customers into paid extras and for recurring discount countdowns, with about £432,000 in refunds; and Gold’s Gym £45,000 for not giving the total price of memberships, including a mandatory joining fee, in a clear and timely way. Each admitted the breach and settled early, receiving a 40 per cent reduction.
Why does this matter?
These are administrative decisions reached in months. The 40 per cent reduction illustrates the incentive to resolve an investigation promptly; it is not automatic, and the available discount diminishes as a case progresses. A false limited-time claim is unfair in all circumstances, so no evidence of effect is needed, and default-selected paid add-ons breach the 2013 Consumer Contracts Regulations without express consent. That reaches installation, removal and extended cover sold with goods. Builders’ merchants, installers and insurers selling add-ons at checkout should review those journeys before Christmas.
Source: CMA press release, 14 October 2026
Sector notes
Construction and engineering
The CMA has invited comments on Prologis’s acquisition of SEGRO until 10 November 2026, classifying the case under building and construction; Phase 1 has not started. Logistics occupiers, developers and their contractors with specific evidence on where the two portfolios compete should consider using that window.
Source: CMA case page, Prologis / SEGRO merger inquiry
Insurance
The Offset Policy allows the MoD to require an irrevocable bank guarantee for the offset obligation, and compensation for a missed milestone is normally at least 10 per cent of the unfulfilled value (section 3.14). For surety providers and the brokers placing defence bonds, that is a new form of exposure, sized against an obligation whose calculation base the policy has not yet settled.
Ireland
The European Commission’s proposal of 9 September, COM(2026) 590, would replace the three 2014 procurement Directives with a directly applicable Regulation; the Council’s procurement working party debated its legal form on 29 and 30 October under the Irish Presidency. If enacted in that form, the European Union (Award of Public Authority Contracts) Regulations 2016 would need to be reviewed and amended or repealed, and would no longer provide the principal framework for above-threshold awards.
Source: Commission proposal COM(2026) 590, 9 September 2026; Council agenda CM 4602/26 (topical debate on legal form)
Concluding thoughts
Three themes. Bid commitments are becoming measured obligations, from social value quantities that are not scored under the default model but become contractual commitments, monitored through KPIs and other reporting, to offset commitments of up to 100 per cent of contract value. Procedural protection depends on its source: the common law gave TJ Trading no hearing, while the Procurement Act gives a supplier facing exclusion a statutory opportunity to respond, and a Scottish appeal failed on a filing a day late. Regulators are using whichever instrument is to hand, designation for Microsoft and Chapter II for Meta.
If you would like to discuss any of the issues raised in this update, please contact Paul Henty or Charlie Bayliss.
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