With no requirements to comply with EU directives for public procurement, the UK Government is able introduce changes to how they procure below threshold goods, works and services.
On 10 December 2020, the Cabinet Office published the Procurement Policy Note (PPN): Reserving Below Threshold Procurements – which outlines how central government buyers are encouraged to reserve low value tenders for Small and Medium sized Enterprises (SMEs), and suppliers in specific geographical regions from 1 January 2021.
What does this mean for SMEs?
The introduction of this PPN is aimed at supporting SMEs by making more opportunities available to them, and increasing their chances of securing work with the public sector.
As part of its drive to level up the UK economy, the government is committed to tackling inequality and giving everyone across the country the opportunity to fulfil their potential. An economy with diverse, resilient and innovative supply markets provides the best environment to start and grow a business.Point 16. Procurement Policy Note – Reserving Below Threshold Procurements
There are two ways that buyers are advised to create tenders which favour SMEs:
Reserving them by supplier location – buyers are able to open tenders which can only be bid on by suppliers located in a specified geographical area. The scope of these tenders can be UK wide or narrowed down by county. Buyers will not be able specify individual nations of the UK.
Restricting the types of organisations that can bid for the work – buyers are able to specify that only SMEs and Voluntary, Community and Social Enterprises (VCSEs) are eligible to bid for the work.
While the PPN applies to central government buyers, the wider public sector is “encouraged to apply the principles” outlined within – meaning as familiarity with these practices grows, so too will UK-led and SME specific opportunities.
The PPN does not apply to low value tenders involving any provision of goods into Northern Ireland – which remains subject to EU regulations under Northern Ireland Protocol, avoiding a hard border with the Republic of Ireland.
What are low value tenders?
Low value tenders are those which fall below specific thresholds, which have been identified to prevent discriminatory procurement practices. If buyers wish to reserve low value tenders, the current thresholds which tender values must fall below are:
Supplies & Services
< £122,976 ex VAT
< £4,733,252 ex VAT
The EU thresholds introduced on 1 January 2020 will remain in place until 1 January 2022. Future thresholds will be determined by the World Trade Organisation (WTO) Government Procurement Agreement (GPA) – which the UK has been a member of since 1 January 2021.
How do I find low value tenders?
There are thousands of portals through which public bodies can publish their notices, and it would take a lot of time and effort to try and locate every opportunity relevant to your business.
Thankfully, Tenders Direct eliminates your need to search for tenders by collating every UK and ROI notice in one place, and alerts you to the tenders relevant to you. Our unique service ensures we are aware of every tender published, and allows us to guarantee that with Tenders Direct – you will never miss a tender again.
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Brexit and Public Procurement
Read about the other changes introduced with Brexit’s conclusion on 1 January 2021.
Reserving Below Threshold Procurements
View the full policy procurement note on GOV.UK