Procurement Policy Note: New Threshold Levels 2016

Procurement regulations set out the terms by which public bodies must abide when carrying out the process of advertising contracts for tendering. A vital regulation which both contracting authorities and tenderers must be aware of concerns advertising threshold levels, indicating at what value a contract for goods, works or services must be advertised for bids. On 9 December 2015 the Crown Commercial Service (CCS) released ‘Procurement Policy Note: Threshold Levels 2016’, informing contracting authorities in advance of the new threshold values.

As of 1 January 2016 the thresholds applying to the Public Contracts Regulations in England, Wales and Northern Ireland have changed. The new thresholds are now in effect from the aforementioned date until 31 December 2017 and are exclusive of VAT and relate to the full life of the contract. The new thresholds apply to all public contracting authorities – as defined by the UK Public Contracts Regulations. ‘Public contracting authorities’, being a wide term, includes central government departments, their executive agencies, non-departmental public bodies, and the wider public sector.

The Public Contracts Regulations establish the terms for awarding public works contracts, public supply contracts and public service contracts. The Defence and Security Public Contracts Regulations set out the actions which bodies operating in the defence and security sector must undertake, while the Utilities Contracts Regulations set out the actions for bodies operating in the water, energy, transport and postal services sectors. Procurement Policy Note: Threshold Levels 2016 provides details of the threshold values concerning all three of these regulatory areas.

It is noteworthy that these thresholds do not apply to Scotland, as Scotland has not yet adopted the EU Public Procurement Directive 2015 and is still operating under the Public Contracts (Scotland) Regulations 2012, the Utilities Contracts (Scotland) Regulations 2012 and the Defence and Security Public Contracts Regulations 2011. Changes to the regulations in Scotland will, however, come into effect on 18 April 2016 – more information can be found in the Scottish Procurement Policy Note.

So, how have the thresholds changed from 2014/15? Well, the Procurement Policy Note states that ‘the revised thresholds show a decrease due to fluctuation changes in exchange rates over the previous 2 years’. These decreases vary; more information can be found in the Procurement Policy Note. It is important to remember, though, that while contracts valued below the respective thresholds have to adhere to fewer rules, they still must be advertised accordingly.

Being aware of the thresholds is vital for both contracting authorities and tenderers alike. Observing the procurement regulations is a legal duty, and they are designed to ensure fair and competitive procurement in the marketplace. All organisations and entities involved in the buying and selling of public goods, works and services must abide by these regulations.

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