Public Procurement thresholds 2018/2019 – updated

New Public Procurement thresholds 2018/2019

New Public Procurement thresholds 2018/2019

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 EU Public Contract Regulations were passed into UK law in 2015 and will remain in place unless or until they are repealed and replaced.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.


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.

 

If you have any questions ask our experts by leaving a comment below!

 

Meeting voluntary standards to maximise the triple bottom line

environment-2948299_640.jpg

 

The new ISO 20400:2017 focuses on ensuring procurement has a positive environmental, social and economic impact.

Although this new standard is voluntary, sustainable procurement and careful management of supply chains are vital to achieving a triple bottom line ‘people, planet and profit’.

Millstream’s General Manager, Penny Godfrey, comments further at infrastructure-intelligence.com

New Webinar – An Introduction to Public Sector Tendering

Millstream_Training_webinar

Looking to start tendering in the public sector? Join our Head of Training and Consultancy, Gemma Waring BA (Hons), for our Introduction to Public Sector Tendering webinar to learn more about basic industry terms and practices.

Date: Friday 27 October
Time: 1.00pm – 2.00pm

Topics covered include:
– The legislation governing procurement in the UK
– Procurement procedures and the tendering stages
– OJEU and thresholds
– Basic rules for writing tenders

Plus, you’ll also have the opportunity to ask Gemma any public sector tendering related questions during the session.

Book your space today

 

 

Tender Forecasting

deadline-stopwatch-2636259_1920A little heads up can go a long way in the world of public sector tendering. Suppliers usually rely on Prior Information Notices (PINs) to give them a heads up that a contract was soon to be out there to bid on.

PINs are a great way to prepare for a bid response, but the time a supplier has to prepare their bid off the back of a PIN can vary: some PINs can be live for as little as a month before the contract notice comes out.

The longer the supplier has, the better position they are in to make a successful bid. That’s why Tenders Direct has launched Advance Tender Alerts.

Advance Tender Alerts provide suppliers with notifications of tenders, related to their business, up to six months before they expire – covering both above and below threshold opportunities.

Continue reading “Tender Forecasting”

Why we love low value tenders

pound-414418_1920

Low value tenders are those which aren’t published in the Official Journal of the European Union (OJEU) as they are below the EU threshold set at £106,047.

More information can be found about thresholds in our blog post, but what are the key benefits of low value tenders?

For SMEs and companies who have no experience of working in the public sector, low value tenders are a good starting point. Securing a few low value contracts allows smaller suppliers to build up a body of work that can help them go after high value OJEU notices in the future.

The five key benefits of low value tenders

Continue reading “Why we love low value tenders”

Top five considerations when bid writing

bid writing

bid writing

If you are a public sector supplier and you’ve found a tender that you want to go for – great news!

Often some areas of a bid response get overlooked in the buzz of bidding for new business. Millstream Training and Consultancy offer bespoke Consultancy to companies looking for tailored support for their tendering exercises. This can be anything from writing a bid response for you, to reviewing a bid response you’ve already written

One of our consultants, Nicola Bramwell (BSc, MCIPS, MSc, PRINCE2), has written her top five ‘must do’s to follow in your next bid response:

1. Agree a response structure and consistent approach

This can include an overview, technical information, resources, and timeframe, so that the entire team uses a consistent style when preparing a response.

2. Take advantage of the opportunity to ask clarification questions

Most tenders will provide bidders with a timeframe to which they are able to ask questions relating to the tender e.g. the clauses included in the terms and conditions. It is vital that bidders take advantage of this opportunity to clarify issues which are vague or unclear.

3. Ensure that all team members adhere to response limitations

It’s common for tenders to include a word / pagination limit for each question so that all bidders are treated equally during the evaluation. If you don’t adhere to these, useful information can be discounted the tender could be deemed non-compliant.

4. Do not provide non-requested attachments / supporting material

As above, tenders will also specify any additional documents that need to be submitted. No bidder is able to submit documents outside of those specified, if they do, a bidder runs the risk of being disqualified.

5. Allow sufficient time for responses to be peer reviewed and / or proof read

When writing bids, it is easy for mistakes to be made, such as failing to respond to a certain point within a question or including typing errors or out-of-date information within a response. Get the entire bid to be peer reviewed and / or proof read by another colleague prior to its submission.

 

Find out more about our Training and Consultancy Services

 

When a local tragedy highlights national public procurement concerns

wind-rose-1209398_1920

In light of the recent Grenfell Tower tragedy that shocked the nation, questions are being raised over local procurement policies across the country. Cost effectiveness and value for money are often the paramount objectives as local authorities continue to face budget cuts. It is paramount however that quality, and more importantly safety, is not jeopardised. Finding the right balance between cost saving and procuring services and products that are fit for purpose is key, but ultimately the welfare and well-being of the end user should be the priority.

Any buyer knows that cost doesn’t necessarily represent value or indeed quality but regardless, detailed specifications are there to be met and for a very important reason. What and who determines the specification, and exactly what this entails, is an important question and something buyers throughout the supply chain must be conscious of.

British safety regulations across many industries tend to be based on principle rather than set rules[1] which can create significant challenges to maintaining consistency and standards. Setting higher standards and adhering to best practice, rather than going with the cheapest bid which meets the specification, is something public procurement officers and regulators must consider.

This reinvigorates the debate over who should set these specifications and regulations. Should they be written by ‘experts’ from the relevant department of the contracting authority, or by that authority’s procurement officers? Or should this role be out-sourced to a third party within that particular industry and sector?

For example and in the case of the Grenfell Tower tragedy, there are no regulations stating fire-retardant cladding material should be used on the exterior of tower blocks and schools[2]. However, it has become clear that industry body, Fire Protection Association (FPA), has been lobbying for this to be a statutory requirement within local authorities and businesses.

Within just one area of local government procurement, say for instance housing and more specifically high rise residential buildings, the vast number of tenders and therefore specifications to be met, add to the complexity. Issues around accountability and quality rise as the procurement complexity grows. Combined with a need to cut costs, this becomes a significant challenge to overcome and get right. But get right all parties must.

In coming months as the impending public enquiry into the Grenfell Tower tragedy continues, more questions on how to improve the public procurement system will undoubtedly follow. Regardless of its outcome, more focus will be placed on the decisions that buyers make, transparency, and who is most qualified to set specifications.

Hindsight is a wonderful thing but nonetheless, there are some important lessons our sector can take away from this tragedy. Steps must be taken to ensure buying decisions are not considered a risk factor in the future.

I am keen to find out how you, as Buyers, feel about the responsibilities you encounter on a day to day basis and how you deal with this pressure. Please let me know your thoughts in the comments below.

[1] https://uk.reuters.com/article/britain-fire-cladding-idUKL8N1JD3YI

[1]https://www.theguardian.com/uk-news/2017/jun/16/manufacturer-of-cladding-on-grenfell-tower-identified-as-omnis-exteriors

 

 

 

 

 

SME week – 6 SME resources we love

SME information

SME informationThe business world is ever changing. To keep on top of the latest trends, it’s important for SMEs to have a resource bank of insider tips and knowledge. We have compiled a list of our top five business resource websites so you have a go-to list of sources to help inform your business practices.

  1. Bdaily Business Blog

Bdaily was founded in 2009 and provides timely news, advice and opinion content useful for SMEs. What’s good about Bdaily is that you can target news stories for specific regions in England: North East, North West, Yorkshire and London as well as national and international coverage.

  1. Gov.uk

If you’re looking for a range of advice for your small business or startup, or even if you’re just in the planning phase, gov.uk has a range of resources: advice on writing a business plan, financial planning and support, and links to the various schemes the government runs.

  1. Smallbusiness.co.uk

With a dedicated Q&A section maintained by small business experts, smallbussiness.co.uk is the hub for start-ups and SMEs looking for insider knowledge. The site covers the most important topics and advice for SMEs covering finance, business management and technology.

  1. Federation of Small Businesses

Established 40 years ago, the FSB provide a wide range of business services to their members. What makes them stand out is their legal edge: online you can access fact-sheets, legal documents and read their blog to get into the nitty gritty of regulations.

  1. Startup Britain

A ‘national campaign by entrepreneurs for entrepreneurs’: Startup Britain offers inspiration, resources and guidance to help people start and grow their own business. Startup Britain have local support centres and run events which you can find via their interactive map online.

  1. Tenders Direct – Things to help you

For guidance specific to public sector tendering, our ‘Things to help you’ section on Tenders Direct has guides, infographics and handy procurement links to help suppliers with their procurement exercises.

TD logo

SME week – The top 5 procurement acronyms

Infographic of the top 5 procurement acronyms

Do you know your AINs from your PINs? You sure CAN.

Tendering in the public sector can involve many acronyms that suppliers will need to get their heads around. We’ve taken the top five acronyms used in the world of procurement and made them into a handy infographic.

For more terminology explained, download our ‘Tendering Terminology’ guide to help you understand the jargon and help take the pressure off your bid response.

 

Infographic of the top 5 procurement acronyms

 

SME week – How to approach your first tender

Advice on writing your first tender

Advice on writing your first tender

With many years of experience winning client’s work, we know how to manage a bid exercise for the best return for your business. When you receive a notification of a tender that is of interest, what are the next steps?

1. Acquire the documentation

Download all documentation and store it in a designated folder on your computer. If you only have a hard copy of the tender document, make copies and keep the original safe.

NB Do not mark or write on the original as it will be needed for the final submission.

2. Distribute and gain feedback

Circulate the tender documentation to the people who will be working on the bid should you choose to do so. Let anyone involved in procurement in the organisation know about the interest in bidding for the work. Allow your team to give feedback about the business opportunity: highlighting concerns and ideas early on will make the process much easier.

3. Review

Read the tender documents thoroughly to assess whether a tender is right for your business. It is not always possible to know from the short tender notification description or summary if the tender is right for you. Think about your turnover, experience, years trading, accreditations and affiliations e.g. ISO 9001.

4. Work with relevant departments

To help you make the decision to go bid or not bid, work with the relevant departments to help you identify the benefits and barriers to your company fulfilling the contract.

If you need any help finding opportunities, Tenders Direct does all the legwork for you by searching over 500 sources for public sector business opportunities. Sign up for a free demo to find out how Tenders Direct can benefit your business.

TD logo

%d bloggers like this: