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A B C D E F G H I J K L M N O P R S T V W Y

New Public Procurement Thresholds for 2016

New Public Procurement Thresholds for 2016

Friday 27th November 2015

On 24th November 2015, the European Commission set out the new minimum financial thresholds for contracts caught by the application of EU public procurement law. The new thresholds apply from 1st January 2016 and will remain fixed for the next two years.

The Public Contracts Regulations 2015 and the Utilities Contracts Regulations 2006 (together the “Regulations”) regulate the procurement activities of “contracting authorities” and “utilities” in England and Wales. “Utilities” include ports, airports and energy providers, while “contracting authorities” include governmental bodies, councils and other public bodies such as universities and registered providers. The Regulations implement two EU Directives on public procurement law.

Every two years, the European Commission updates the minimum financial thresholds to which the EU Directives, and therefore the Regulations, apply. Where contracting authorities and utilities procure contracts for goods, works or services which are of a value that exceeds the minimum financial thresholds, the full regime of the Regulations applies. This is often known as an “OJEU procurement” because of the need to advertise the requirement in the Official Journal of the European Union (OJEU).

The European Commission has once again increased the threshold, as measured in Euros. However, due to the increasing strength of sterling against the Euro, the impact for domestic public bodies is that, despite the increase, sterling thresholds have actually decreased.

Set out below in bold text are the new sterling threshold rates which apply from 1st January 2016. The current (i.e. pre-2016) threshold rates are set out in brackets.  

Public Contracts Regulations 2015 (PCR 2015)

  Supplies Services Works
Central Government bodies

£106,047

(£111,676)

£106,047

(£111,676)

£4,104,394

(£4,322,012)
Other contracting authorities

£164,176

(£172,514)

£164,176

(£172,514)

£4,104,394

(£4,322,012)

 

The threshold for light touch (social and similar) services procured under PCR 2015 remains unaltered. However, the European Commission has confirmed from 1 January 2016 that the new sterling threshold shall be £589,148.

Utilities Contracts Regulations 2006 (UCR 2006)

  Supplies Services Works
All Sectors

£328,352

(£345,028)

£328,352

(£345,028)

£4,104,394

(£4,322,012)

 

The Utilities Contracts Regulations 2016 (UCR 2016) will shortly replace UCR 2006 and must be brought into force as domestic legislation by no later than April 2016. The introduction of UCR 2016 will not affect the thresholds set out in the table above.  

When UCR 2016 comes into force, it will include a light touch regime for certain social and similar services. The minimum sterling financial threshold for light touch regime contracts procured under UCR 2016 shall be £785,530.

It will be disappointing news to domestic contracting authorities and utilities that the minimum thresholds have again decreased, the effect of which is that more (not less as the European Commission had intended) contracts will be subject to the requirements of EU public procurement law. There remains the possibility that the European Commission will recommend a significant increase in the thresholds for 2018. If not, there is still the possibility of changes being implemented following the European Commission’s legally mandated review of procurement law, which is to be undertaken by no later than April 2019. 

For more information on any public procurement law issues, please contact Michael Winder on 0151 600 3085 or by email Michael.winder@brabners.com or a member of the Commercial team.