New EU procurement thresholds from January 2020

Charities that supply services to public sector bodies should be aware that the European Commission has published new procurement threshold values which will apply to public services contracts advertised on and after 1 January 2020.

In the UK, the Public Contracts Regulations 2015 (“PCR 2015”) set out the rules to be followed by contracting authorities when conducting tenders. These rules apply to “contracting authorities”, which are usually public sector bodies such as local authorities, NHS Trusts, and central government departments.

A charity, however, can also fall within the wide definition of “contracting authorities”, in certain circumstances. Charities that receive substantial funding (that is, more than 50 per cent of their funding) from government, local authorities or NHS Trusts, or have more than half of their trustee board appointed by such bodies, are most likely to find themselves subject to the procurement rules.

If a charity is a “contracting authority” for these purposes, then it must advertise tenders above a certain threshold value in the Official Journal of the EU. It must also run a transparent procurement process in accordance with one of the procedures set out in the PCR 2015.

The new thresholds from January next year are as follows, and should be the charity’s best estimate of the lifetime value of the contract (including any options/extensions), net of VAT:

Works Contracts

£4,733,252

Supply and Service Contracts (central government)

   £122,976

Supply and Service Contracts (sub-central authorities)

   £189,330

Light Touch Regime for health/social services

   £663,540

In other procurement news, the Crown Commercial Service has recently published an updated version of its short form terms and conditions to be used for lower value contracts.

This is intended to be a light touch set of terms and conditions for general goods and services contracts with a value below the procurement thresholds set out in the Public Contracts Regulations 2015. For more on the updated version, head over to our sister blog on the Procurement Portal.

Free to access procurement resources

If your charity is one to which the EU procurement rules apply, then you can also find a useful collection of resources on our Procurement Portal, including a link to the free, guided Regulation 84 wizard, a toolkit of guidance notes and template documents, and answers to frequently asked questions about procurement issues.

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