The new procurement regime for below threshold contracts

Following our earlier blog on the Public Contracts Regulations 2015 (the "Regulations"), this time we are looking at sub-threshold contracts; those contracts whose value is lower than the threshold above which the Regulations apply in full.

At present, these are not covered by the Public Contracts Regulations 2006 (although the general EC Treaty principles around transparency, non-discrimination and equality of treatment must still be respected).

When we first set eyes on the draft Regulations and looked at draft Regulations 105 to 109 we got a surprise; these regulations introduce a new regime in respect of under threshold contracts that actually goes further than was required by the parent Directive.

This is in contrast to the general approach taken overall, which is to implement the minimum required, to retain discretion and flexibility and to avoid "goldplating" the Directive. The fact that the Government departed from this general approach in respect of sub-threshold contracts is testament to the importance attached to the encouragement of small and medium sized entities (SMEs) which the sub-threshold regime is designed to cover.

If implemented in their current form, the below-threshold Regulations (which will apply to contracts over £10,000 for Central Government and £25,000 for other contracting authorities) will impose two key requirements:

  • if the opportunity is to be advertised at all, this must include an advertisement on Contracts Finder; and
  • a ban on the use of a PQQ or a separate pre-qualification stage (note too that even where contracts are above-threshold, the new Regulations will require contracting authorities to have regard to any Cabinet Office guidance on the use of PQQs (including avoiding burdensome, excessive or disproportionate questions) and their assessment).

Contracting authorities will therefore need to update their procurement teams and policies, to ensure that these new requirements are being met; they will apply from the date that the Regulations come into force (likely to be in the first part of 2015).


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