Public Procurement thresholds 2018/2019 – updated

Details of current UK thresholds can be found on: UK Public Procurement Thresholds

Details of current EU thresholds can be found on: EU Public Procurement Thresholds

Public Procurement thresholds 2018/2019 – updated

With the ongoing uncertainty over whether or not Brexit negotiations will result in an agreement, changes to public procurement remain a distinct possibility (see our blog on the UK Government’s contingency for e-procurement in the event of a “no-deal” scenario). Despite this, it is important to remember that the regulatory framework for public contracts will remain in place in the UK for the foreseeable future regardless of the outcome. EU Public Contract Regulations were passed into UK law in 2015 and will remain in place unless or until they are repealed and replaced. Considering the time frames involved in formulating and ratifying new legislation, the thresholds detailed below will almost certainly remain in effect until the end of 2019 regardless of the outcome of the negotiations.

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When procuring goods or services over the financial threshold a public authority must do so under the Public Contracts Regulations 2015 in England, Wales and Northern Ireland and the Public Contracts (Scotland) Regulations 2015. These regulations transposed the European public contracts directive (2014/24/EU) into national law. The main point of interest from our readers’ perspectives is that buying organisations must advertise any requirement over the new thresholds in the Official Journal of the European Union (OJEU), rather than just advertising it nationally. The calculation of the estimated value of a procurement shall be based on the total amount payable, net of VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts as explicitly set out in the procurement documents. Between the 2016/2017 thresholds and the 2017/2018 thresholds we have seen a small increase in the thresholds in both Pounds Sterling and Euros. Due to the relatively small increase it is unlikely that buyers or suppliers will notice much change in the size of contracts advertised at European level.

Public Contracts

	Supply, Services[1] and Design Contracts	Works Contracts[2]	Social and other specific services[3]
Central Government[4]	£118,133 €144,000	£4,551,413 €5,548,000	£615,278 €750,000
Other Contracting Authorities	£181,302 €221,000	£4,551,413 €5,548,000	£615,278 €750,000
Small Lots	£65,630 €80,000	£820,370 €1,000,000	n/a

[1] With the exception of the following services which have different thresholds or are exempt:

– Social and other specific services (subject to the light touch regime) Article 74.

– Subsidised services contracts specified under Article 13.

– Research and development services under Article 14 (specified CPV codes are exempt).

[2] With the exception of subsidised works contracts specified under Article 13.

[3] As per Article 74. Services are listed in Annex XIV.

[4] Schedule 1 of the Public Contracts Regulations lists the Central Government Bodies subject to the WTO GPA. These    thresholds will also apply to any successor bodies.

Social and other specific services are subject to the ‘light touch regime’ as described in a previous blog.

Utility Contracts

	Supply, Services and Design Contracts	Works Contracts	Social and other specific services
Utility Authorities	£363,424 €443,000	£4,551,413 €5,548,000	£820,370 €1,000,000

Defence and Security Contracts

	Supply, Services and Design Contracts	Works Contracts	Social and other specific services
Defence and Security authorities	£363,424 €443,000	£4,551,413 €5,548,000	n/a

Clarifications

Concession Contracts

For the first time Concession Contracts are covered in EU Law under a separate directive and therefore separate regulations in the UK. The EU Directive is found here: http://eur-lex.europa.eu/legal-content/GA/TXT/?uri=celex:32014L0023 The UK regulations here: http://www.legislation.gov.uk/uksi/2016/273/contents/made The UK Directive outlines how the value of a concession contract should be calculated: http://www.legislation.gov.uk/uksi/2016/273/regulation/9/made The thresholds for publication in the OJEU refers to Article 8 (1) of the EU Directive which is:

1. This Directive shall apply to concessions the value of which is equal to or greater than EUR 5 548 000.

The Sterling equivalent is £4,551,413

Calculating Estimated Value

The calculation of the estimated value of a procurement exercise shall be based on the total amount payable, net of VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts as explicitly set out in the procurement documents.

Contracts Subsidised by Public Funds

All applicable contracts which are subsidised by 50% or more of public funds must be advertised in the OJEU. From time to time a public body may part fund a project and request that the recipient of funding must advertise the procurement in line with public contracts regulations even if their contribution is less than 50% of the overall value. As such any recipient of public funding on a project should verify with the funding body what is expected of them in procuring for the project.

What are Small Lots?

Read our blog about small lots.

How do I Know if a Contract is Classed as Works?

Many contractual requirements are a mixture of works and services. Whichever element is the highest in value should be taken as the contract nature when determining what threshold to apply. If you are unsure whether a specific element is classed as works or services then you can refer to Schedule 2 of the regulations which lists all activities which constitute works by CPV code: http://www.legislation.gov.uk/uksi/2015/102/schedule/2/made If the CPV code which fits your requirement is not in that list then it is not classed as a Works contract.

Tenders Direct can alert you to suitable public contracts as soon as they’re published. Visit our website or call us on 0800 222 9009 to learn more.