Provisions in the law which came into force in February have been used for what appears to be the first time, with the department redacting details of goods and providers
HM Revenue and Customs has seemingly become the first public body to use provisions explicitly included in the recently introduced Procurement Act, which allow organisations to withhold the details of commercial suppliers on national security grounds.
Section 94 of the act – which came into force in February – covers “exemptions from duties to publish or disclose information” which public sector bodies would otherwise be mandated to release as part of transparency requirements.
The new law provides dispensation to redact key commercial details for two reasons, including where “withholding the information from publication or other disclosure is necessary for the purpose of safeguarding national security”. Public sector buyers are also permitted to withhold key facts where “the information is sensitive commercial information and there is an overriding public interest in its being withheld from publication or other disclosure”.
The primary legislation which has been replaced by the new Procurement Act – the Public Contracts Regulations 2015 – also made provisions for details of awarded contracts to be withheld where publication “would prejudice the legitimate commercial interests of a particular economic operator… [or] might prejudice fair competition between economic operators”.
That law also permitted data to be redacted if a failure to do so “would impede law enforcement or would otherwise be contrary to the public interest”.
The explicit and specific provision for commercial details to be withheld on “national security” grounds is a new addition to the Procurement Act, when compared with The Public Contracts Regulations – whose only reference to “national security” is in the context of the potential use of electronic signatures during commercial processes.
The first application of the new act’s allowance appears to have occurred across four HMRC tech deals that have recently come into effect – or will do so shortly.
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All four of these engagements are classified under the IT services category. As well as this broad definition, information on contract lengths and estimated value is also included. But, beyond that, all details of precise products, services and intended uses are not included, nor are the names of any suppliers. In all cases, an exemption under section 94 of the procurement act is cited.
Where provider details and a description of the procurement would normally be included, the document reads: “exempt as per S94 – (1)(a) – withheld for the purpose of safeguarding national security”.
In response to enquiries from HMRC, a spokesperson for the tax department said: “Security exemptions in procurement notices are not new and predate the Procurement Act 2023. We ensure such exemptions are only applied when necessary to protect national security, while maintaining appropriate transparency in public spending.”
The Cabinet Office administers the new procurement regime and has provided guidance for departments on how to apply the provisions of the new law, but it is understood that doing so is the responsibility of each individual agency.
The largest of the four HMRC deals is valued at £12m and, according to the procurement notice, was due to come into effect on 1 July and run for five years. A £2.6m engagement, meanwhile, began a three-year term on 28 June.
Two smaller agreements – respectively worth £644,000 and £840,000 – are due to come into effect on 28 September and run for a year.
The cumulative worth of the four contracts – awarded to four unknown suppliers, providing four unknown sets of products and services – is £16.1m.
