As anyone working in public procurement will know, every two years comes a revision of the public procurement thresholds, and as of January 1, new public procurement thresholds apply.
Any public contract with a value above the relevant threshold must be procured according to public procurement law. The thresholds apply to all contracting authorities including government departments, their agencies, non-departmental public bodies and other public sector organisations.
What are the new thresholds for 2024 and how do these compare to 2022-23 thresholds?
Work Contracts - For Central Government bodies, utilities, and other contracting authorities, thresholds increased from £5,336,937 to £5,372,609
Concessions: - For Central Government bodies, utilities, and other contracting authorities, thresholds also increased from £5,336,937 to £5,372,609
Supplies and Services - For Central Government bodies, thresholds increased from £138,760 to £139,688; for utilities, thresholds go from £426,955 to £429,809; for other contracting authorities, thresholds go from £213,477 to £214,904
Light Touch Regime Services - Thresholds here are unchanged at £663,540
Despite recent spikes in inflation and subsequent rises in costs in the UK, the changes in these thresholds are relatively small compared to the values that have been in place for the past few years. In practical terms, this means contracts that were previously estimated to fall below the relevant thresholds may now exceed them due to the general increase in prices.
As is currently the case, the new figures are inclusive of VAT.
The Procurement Act 2023:
Following the UK’s exit from the European Union, the UK government undertook a comprehensive review of the UK’s public procurement regime, to consider what a new post
Brexit regime may look like, without some of the perceived restrictions imposed by the UK having to mirror the EU regime.
The results are encapsulated in the Procurement Act 2023, and the current expectation is that this will come into effect in October 2024.
This act will replace the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 and the Concessions Contracts Regulations 2016 and represents the biggest change in public procurement in nearly a decade.
The act’s primary objectives include improving transparency, benefitting smaller businesses and facilitating private sector collaboration with public bodies.
While the new Act has over 100 sections, some of the key changes include additional flexibilities in procurement procedures; new requirements for publishing notices to enhance transparency; extension of the grounds for supplier exclusion; introduction of a central debarment list; and clarity over duration of standstill period.
The introduction of the new act will afford contracting authorities greater flexibility and introduces a new set of rules and requirements against which public procurement procedures will fall to be assessed.
How those flexibilities will be exercised and competitions conducted will be of great interest in the conduct of new competitions later this year.
In the meantime, being well-prepared by having full understanding of the new act will be crucial for all involved in public procurement.
:: William Curry is partner at Arthur Cox
