JCT 2024, NEC4 & Two-Stage D&B Under the Procurement Act 2023

As anyone who has sat on a public sector evaluation panel in the first quarter of 2026 will tell you, the days of throwing risk over the fence and expecting a competitive lump-sum price are entirely over. With contractors aggressively rejecting high-risk single-stage tenders, public sector clients are pivoting hard to two-stage Design and Build (D&B). The market has spoken: if you want a building delivered, you must pay for early contractor involvement, share the inflation risk, and embrace absolute supply chain transparency.

This shift has not occurred in a vacuum. It is the direct result of a perfect storm: the one-year anniversary of the Procurement Act 2023, the mandatory rollout of the JCT 2024 contract suite, and the strict enforcement of the Building Safety Act (BSA). For bid teams, the landscape has fundamentally changed. You are no longer just pricing a bill of quantities; you are submitting complex, qualitative evidence of your supply chain management, your BSA competence, and your open-book accounting processes.

In this comprehensive briefing, we will examine how the legal changes of JCT 2024 and NEC4 intersect with the market-driven shift toward two-stage D&B, and how forward-thinking bid managers are deploying advanced tender intelligence to de-risk these complex, high-stakes public sector submissions.

1. The Procurement Act 2023 One Year On: The Death of the Rigid Framework

Since going live in February 2025, the Procurement Act 2023 has fundamentally rewired how public sector construction frameworks operate. The introduction of the 'competitive flexible procedure' was designed to strip away the bureaucratic bloat of the old restricted and open procedures, allowing contracting authorities to design procurement processes that actually fit the complexity of modern construction projects.

A year into this new regime, the impact is undeniable. The rigid, multi-year frameworks that locked out innovation and forced suppliers into inflexible pricing models are being replaced by dynamic, multi-stage procurement strategies. Contracting authorities are now legally empowered—and actively encouraged—to engage in extensive early market engagement before a formal tender notice is even published.

However, this flexibility comes with a heavy compliance burden. The Act demands unprecedented supply chain transparency. Under the new rules, contracting authorities must publish a raft of notices throughout the project lifecycle, including Contract Details Notices and Supplier Performance Notices. For bid teams, this means that your past performance, your payment practices, and your supply chain management are visible on the Central Digital Platform for every future evaluator to see.

As detailed in the official UK Government guidance on Transforming Public Procurement, the grounds for mandatory and discretionary exclusion have been significantly tightened. Failing to demonstrate robust supply chain management or hiding behind opaque sub-contracting arrangements is no longer just a scored weakness; it is grounds for immediate exclusion from the procurement process.

2. The Collapse of Single-Stage D&B and the 15% Cost Reality

For decades, public sector clients relied on single-stage Design and Build to achieve cost certainty. The premise was simple: hand the contractor a set of Employer's Requirements (ERs), demand a fixed lump-sum price, and transfer all the design and inflation risk to the supply chain. In a stable economy, this worked. In the economic reality of 2026, it is a recipe for zero compliant bids.

Contractors have drawn a line in the sand. The cost of bidding a single-stage D&B project has skyrocketed, often requiring hundreds of thousands of pounds in upfront design work with no guarantee of winning the contract. When you factor in the volatile cost of materials and chronic skills shortages, the risk profile is simply unacceptable for Tier 1 and Tier 2 contractors.

The data backs up this anecdotal evidence. According to the authoritative BCIS Construction Procurement Trends 2026 report, the industry is facing a projected 15% rise in building costs over the next five years. The report highlights an industry-wide aversion to single-stage D&B, noting that contractors are actively declining to tender for projects where the client attempts to dump unquantifiable upfront design risks onto the supply chain.

When bid teams review a single-stage tender pack today, the first question is no longer "How do we win this?" but rather "Is this client entirely detached from market reality?" If the risk allocation is disproportionate, the bid/no-bid decision is swiftly becoming a resounding "no-bid."

3. The Two-Stage Tendering Pivot: Collaboration Over Confrontation

Nature abhors a vacuum, and the void left by the collapse of single-stage D&B has been rapidly filled by two-stage tendering. This procurement route aligns perfectly with the competitive flexible procedure of the Procurement Act 2023, allowing contracting authorities to select a contractor based on preliminaries, overheads, profit, and qualitative competence in the first stage, before working collaboratively to develop the design and agree on a lump sum in the second stage.

The Gleeds UK Construction Market Report Q4 2025 (released in January 2026) underscores this massive market shift. The report cites a strong preference for two-stage tendering as the only viable mechanism to secure contractor interest in an unpredictable economic environment. By utilising a Pre-Construction Services Agreement (PCSA), contractors are paid for their early involvement, allowing them to interrogate the design, identify value engineering opportunities, and secure supply chain packages before committing to a final contract sum.

For bid writers and estimators, a two-stage tender requires a completely different psychological approach. You are not trying to be the cheapest on day one. You are trying to prove that your project team is the most competent, transparent, and collaborative partner available. You must demonstrate how you will manage the PCSA phase, how you will competitively tender sub-contract packages on an open-book basis, and how you will protect the client's budget from inflationary shocks.

4. JCT 2024 Design & Build: The New Mandatory Baselines

As two-stage tendering becomes the default, the contracts governing these relationships have evolved. The JCT 2024 Design and Build contract has now fully replaced the 2016 edition across new public tenders. If your bid team is still relying on boilerplate responses drafted for JCT 2016, you are going to lose points—or worse, face disqualification for non-compliance.

The most significant shift in JCT 2024 is the elevation of previously optional supplemental provisions into mandatory operative clauses. Article 3, which mandates collaborative working, is no longer an optional add-on; it is a core contractual obligation. Similarly, Clause 2.1.5 now explicitly requires the contractor to provide information regarding the environmental impact of the design and the materials used. Bid teams must now weave carbon reporting and sustainability metrics directly into their methodology statements, proving they have the systems in place to meet these contractual demands.

Building Safety Act (BSA) Dutyholder Roles

The most critical update, however, is the integration of the Building Safety Act 2022. Under JCT 2024, the contractor is now explicitly appointed as the Principal Designer and Principal Contractor for the purposes of Part 2A of the Building Regulations. This is a monumental shift in liability.

When responding to a two-stage tender under JCT 2024, evaluators are looking for absolute assurance that you understand these dutyholder roles. If the project falls under the definition of a Higher-Risk Building (HRB), your bid must detail exactly how you will manage the golden thread of information, how you will handle mandatory occurrence reporting, and how you will prevent design changes from invalidating the Building Safety Regulator's approval.

5. NEC4 Option C Dominance: Open-Book Audits and Pain/Gain

While JCT 2024 dominates the vertical building sector, public sector infrastructure and complex civil engineering projects are overwhelmingly turning to the NEC4 suite. Specifically, contracting authorities are increasingly relying on NEC4 Option C (Target Cost with Activity Schedule) to manage the volatility of the current market.

As detailed in recent industry guidance on NEC Contracts and Procurement Act 2023 Alignment, Option C is the ultimate vehicle for sharing the pain and gain of inflation. The contractor and the client agree on a target cost. If the final defined cost (plus fee) comes in below the target, the savings are shared. If it overruns, the financial pain is shared according to a pre-agreed formula.

For bid teams, winning an NEC4 Option C contract requires submitting highly detailed, open-book activity schedules. Evaluators will scrutinise your Schedule of Cost Components (SCC) to ensure your fee percentages are realistic and that you have not hidden risk buffers within your defined costs. Furthermore, your qualitative response must demonstrate a mature understanding of NEC4's early warning mechanisms. You must prove that your project managers will act in a "spirit of mutual trust and co-operation" by flagging risks to the Project Manager the moment they arise, rather than hoarding them for a final account dispute.

Strict Enforcement of Supply Chain Payments

There is a sharp sting in the tail of the Procurement Act 2023 that intersects directly with NEC4 open-book audits: the strict enforcement of 30-day supply chain payments. Section 68 of the Act implies a 30-day payment term into every public contract and sub-contract, regardless of what is written in the bespoke terms.

Public sector clients are now using the open-book nature of NEC4 Option C to actively audit contractor payment practices. If your defined cost applications reveal that you are holding back cash from your Tier 3 and Tier 4 sub-contractors, you will not only face disallowed costs under the contract, but you will also trigger a Supplier Performance Notice on the Central Digital Platform. Bid teams must therefore demonstrate digital cost assurance and prompt payment capabilities in their proposals to avoid being excluded from future procurements.

6. What This Means for Bid Teams: De-Risking the Tender Process

The convergence of the Procurement Act 2023, two-stage tendering, JCT 2024, and NEC4 Option C has created an environment where the complexity of public sector bidding is at an all-time high. Tender packs routinely exceed 100 documents, filled with bespoke Z-clauses (in NEC4) or Schedule of Amendments (in JCT) that subtly alter the standard risk profile.

Relying on manual review processes is no longer viable. A bid manager cannot physically read, cross-reference, and analyse 2,000 pages of legal, technical, and commercial documentation within a standard four-week tender period while simultaneously managing the PCSA pricing strategy and drafting qualitative responses.

This is where artificial intelligence has transitioned from a theoretical advantage to an operational necessity. High-performing bid teams are using platforms like Lucius AI to instantly parse massive tender packs. By deploying Tender AI, teams can automatically extract and categorise every contractual amendment, instantly identifying onerous clauses that shift design liability or alter the standard pain/gain share mechanisms.

Furthermore, AI-powered tender intelligence helps bid writers align their responses perfectly with the specific evaluation criteria dictated by the Procurement Act 2023. Whether you need to generate a robust methodology for Gateway 2 compliance under the Building Safety Act, or detail your open-book accounting procedures for an NEC4 Option C target cost, AI tools provide the foundational analysis and structuring required to score top marks.

If you are curious about how this technology integrates into existing bid processes, you can explore how it works to see the exact workflow from document ingestion to final risk report. The reality is that the cost of missing a critical contractual amendment in a two-stage D&B bid far outweighs the investment in modern bid technology. Reviewing the pricing of AI platforms reveals a clear ROI when compared to the legal fees associated with a single mismanaged contract.

Conclusion

The public sector construction market in 2026 is defined by collaboration, transparency, and shared risk. The days of adversarial single-stage lump-sum bidding are behind us, replaced by the nuanced, multi-stage processes enabled by the Procurement Act 2023 and governed by the updated JCT 2024 and NEC4 frameworks. For contractors, this is a positive shift, offering a route to fair margins and protected supply chains—provided you can navigate the complex tender requirements.

To win in this environment, your bid team must be faster, smarter, and more analytical than the competition. You must prove your competence in Building Safety Act dutyholder roles, demonstrate flawless open-book accounting, and identify hidden contractual risks before you commit to a PCSA. By equipping your team with Lucius AI, you transform the overwhelming burden of tender analysis into a distinct competitive advantage, ensuring you bid less, win more, and execute profitably.