The European Commission has confirmed the new financial thresholds to be applied to public procurement. The new thresholds will apply from 1^st January 2016 and be in place until the end of 2017.

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. Scotland has not yet transposed the new EU directive and so is still operating under the Public Contracts (Scotland) Regulation 2012. The new thresholds apply to all European Union member states irrespective of whether they have introduced the European legislation, which in any case they must do by April 2016.

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.

The European Union is also a signatory to the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA) and so compliance with the European procurement directives is designed to ensure compliance with the GPA. While European legislation sets out the financial thresholds in Euros, the GPA defines them in the form of Special Drawing Rights (SDRs), which is an asset established by the International Monetary Fund (IMF). The value of the SDR varies daily and is based on the relative values of a basket of currencies consisting of the euro, Japanese yen, pound sterling, and U.S. dollar.While this time around the thresholds have been increased in Euros, the equivalent sterling value has actually decreased because of the strength of sterling against the Euro.

For UK buyers this means that they now have to publish more of their requirements, rather than less, in the OJEU and if anything is going to be more of a burden on their resources as they must adhere to stricter and more bureaucratic rules.

For UK suppliers this means that from 2015 to 2016 more UK contracts but fewer European contracts will be subject to OJEU publication. This could well mean that the competition on our own national contracts from across the channel will be stiffer but anyone from the UK looking to bid on EU contracts will have less opportunity than before.

A corporate blog wouldn’t be a corporate blog without me telling you our solution to the problems. For buying organisation’s in England we provide the mytenders service, which allows buying organisations to manage their OJEU and non-OJEU procurement exercises. Our helpdesk are well versed in EU procurement law, with some working towards the LLM Public Procurement Policy and Law at Nottingham University and another two having already attained distinction in this qualification. For suppliers we provide the Tenders Direct service, providing all the OJEU notices and sourcing all the sub-OJEU notices in the UK to give you our market leading notice alert service.

And so on to the new thresholds. I have provided the previous thresholds for 2014-2015 in brackets for reference.

PUBLIC CONTRACTS

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

UTILITY CONTRACTS

DEFENCE AND SECURITY CONTRACTS

As ever, please don’t hesitate to let us know what you think by commenting below.

An inquiry to examine whether a UK scheme allowing publicly-backed funds to invest in Small and Medium Enterprises (SMEs) is being implemented in line with EU state aid rules. The opening of the inquiry gives interested third parties the option to comment on the measure under assessment.

Read the rest of this entry »