PPN 025: Protecting the UK’s national security through public procurement · first published 19 June 2026
Procurement Policy Note (PPN) 025, issued June 2026, directs central government departments, executive agencies and non-departmental public bodies (NDPBs) to treat four sectors — shipbuilding, steel, artificial intelligence (AI), and energy infrastructure — as strategic national security assets, not ordinary commodities. Buyers in those organisations must identify relevant contracts in their pipelines, engage early with a designated Sector Lead for the relevant sector, and consider using the national security exemption available under the Procurement Act 2023 where appropriate. The national security exemption allows a buyer to run a procurement outside the usual competitive rules if national security genuinely requires it — but it must be justified case by case and used consistently with the UK's international trade agreements. For SMEs (small and medium-sized enterprises) supplying into these sectors, this means buyers may apply additional strategic criteria and, in some cases, restrict competition to UK or allied-nation suppliers. Private utilities are strongly encouraged (though not formally required) to follow the same approach for energy infrastructure procurements.
WHO THIS APPLIES TO
THE ENKII VIEW
For SMEs already operating in shipbuilding, steel, AI or energy infrastructure, this PPN creates a meaningful opportunity: government is explicitly moving toward a 'market-shaping' approach that values supply-chain resilience and domestic capability, which can favour established UK suppliers over cheaper overseas alternatives. However, the flip side is real risk — the national security exemption could be used to award contracts without competition, bypassing SMEs entirely if buyers decide a specific incumbent or allied-nation supplier best serves security interests. SMEs in these sectors should proactively position their national security and resilience credentials with buyers and Sector Leads now, before pipelines are locked in.
1. Contact the relevant Sector Lead proactively — share your supply-chain resilience story, UK production capacity, and security credentials before your next tender is published. Sector Lead contacts are: Shipbuilding: nso-commercialandpipeline@mod.gov.uk; Steel: steelstrategy@businessandtrade.gov.uk; AI: CommercialDir@dsit.gov.uk; Energy Infrastructure: EnergyInfrastructureSectorLead@energysecurity.gov.uk.
SMEs supplying into shipbuilding, steel, AI or energy infrastructure to central government — Buyers are now required to 'engage early with the relevant Sector Lead' before committing their commercial approach. Getting your firm on the radar at this pipeline-shaping stage is your best chance to influence how contracts are structured.
2. Build and document a clear 'national security and resilience' narrative for your business — covering where you source inputs, your production location(s), continuity plans and any security clearances held — and have it ready to submit at pre-market engagement or selection questionnaire stage.
SMEs in shipbuilding, steel, AI or energy infrastructure — The PPN signals a move to a 'market-shaping approach' that weighs 'security of supply and long-term market resilience' alongside price. Buyers will increasingly ask for this evidence; having it ready positions you ahead of competitors.
3. Check whether your utility customers are following this PPN's guidance (they are 'strongly encouraged' to do so) and ask them directly whether they are engaging the Energy Infrastructure Sector Lead. Align your own pitch to the same national security and resilience framing.
SMEs supplying private utilities in energy infrastructure — The PPN explicitly encourages private utilities to 'strongly consider applying this PPN' for energy infrastructure — meaning the same strategic lens could be applied to your contracts with them even though they are not formally bound.
4. Even though you are not formally bound, review your own procurement pipeline against the guidance in Annex A and consider engaging the relevant Sector Lead for high-value or nationally significant contracts.
SMEs that are contracting authorities (e.g. local-authority-owned companies or NHS social enterprises) in the four sectors — The PPN explicitly states that other Procurement Act 2023 contracting authorities 'are also encouraged to engage the Sector Leads' for procurements that are 'high value, complex or related to national interests.'
5. Understand your rights: the national security exemption must be justified case by case and applied consistently with the UK's international trade agreements. If you believe an exemption has been used improperly to exclude you, seek legal advice and contact the Government Commercial Agency Helpdesk (0345 410 2222 / info@gca.gov.uk) for guidance.
SMEs in the four sectors concerned about non-competitive awards — The PPN states the exemption 'must only be relied on in accordance with the Act, and, where relevant, consistently with the UK's international trade agreements' — it is not a blanket power to shut out competition.
Every rule below quotes the official document verbatim.
PPN 025 applies only to central government departments, their executive agencies and non-departmental public bodies ('in-scope organisations'); it takes effect immediately from June 2026. (Central government departments, executive agencies and NDPBs; immediate effect from June 2026)
“This Procurement Policy Note (PPN) applies only to central government departments, their executive agencies and non-departmental public bodies.”
The PPN covers four critical sectors: shipbuilding, steel, AI and energy infrastructure, each with a named Sector Lead organisation. (All in-scope organisations procuring in the four named sectors)
“The Government has commissioned action in four critical sectors and identified organisations to act as Sector Leads for each: Shipbuilding - National Shipbuilding Office, Ministry of Defence; Steel - Department for Business and Trade; Artificial intelligence (AI) - Department for Science, Innovation and Technology; Energy infrastructure - Department of Energy Security and Net Zero”
Private utilities are strongly encouraged (but not formally required) to apply the PPN and engage with the energy infrastructure Sector Lead for relevant procurements. (Private utilities; energy infrastructure sector)
“Private utilities should strongly consider applying this PPN and accompanying guidance in relevant procurements in energy infrastructure, and engage with the Sector Lead on their proposed approach to relevant procurements.”
Other contracting authorities under the Procurement Act 2023 (e.g. local government, NHS) may consider the guidance for their own pipelines but are not bound; those with high-value, complex or nationally significant procurements are encouraged to engage Sector Leads. (Contracting authorities outside central government (e.g. local authorities, NHS trusts))
“Other organisations that are contracting authorities under the Procurement Act 2023 can consider their own pipelines in the context of the guidance. Where procurements are high value, complex or related to national interests, they are also encouraged to engage the Sector Leads.”
Buyers must identify pipeline procurements relevant to national security in the four sectors and engage early with the relevant Sector Lead before proceeding commercially. (All in-scope organisations; all contract values in the four sectors)
“Identify the procurements in your pipeline relevant to protecting the UK's national security in shipbuilding, steel, AI and energy infrastructure. Engage early with the relevant Sector Lead to ensure their commercial approach will protect the UK's national security interests.”
The national security exemption under the Procurement Act 2023 may be deployed where appropriate and justified, assessed case by case, and must be consistent with the UK's international trade agreements. (In-scope organisations; relevant procurements in the four sectors)
“Deploy the national security exemption in the Procurement Act 2023 where appropriate and justified in a relevant procurement… The national security exemption must only be relied on in accordance with the Act, and, where relevant, consistently with the UK's international trade agreements relating to procurement.”
The government is explicitly shifting to a more interventionist, market-shaping approach in central government procurement for these sectors. (All in-scope organisations; four critical sectors)
“In-scope organisations should work with them and support the shift to a more interventionist, market-shaping approach in central government procurement as well as considering the national security exemption.”
Suppliers from the UK's close trading partners remain important and are often well-placed to meet procurement requirements, particularly for continental resilience and defence interoperability. (All in-scope organisations; four critical sectors)
“Suppliers from the UK's close trading partners will continue to be important to our public procurement requirements and will often be well-placed to help us meet those requirements, particularly including where we need to secure continental resilience and interoperability of defence.”
In-scope organisations must note and act on the provisions of this PPN with immediate effect from the date of issue (June 2026). (All in-scope organisations; from June 2026)
“In-scope organisations should note the provisions of this PPN with immediate effect.”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.