New year, new values: Public procurement thresholds in place from 1 January 2022

As of 1 January 2022, the minimum financial thresholds for the procurement regime to apply changed, so new ones are now in force.

The change has two key features:

• First, the minimum contract value threshold (in £GBP) has changed for all types of public contracts except for threshold values for small lots, light touch regime services and below threshold contracts;
• Second, these contract values are now expressed inclusive (rather than exclusive)of VAT.

The new thresholds only affect procurements commencing on or after 1 January 2022. Procurements already commenced before then are unaffected.

As a reminder, Procurement Policy Note 09/21 gives guidance on how to estimate contract values on the new VAT-inclusive basis, without making a deduction for any available VAT recovery. See our December blog post, T(hresholds!) minus two weeks and counting, for further detail.

Scope

The new thresholds apply to procurements conducted under the following Regulations:

• Public Contracts Regulations 2015 (“PCR 2015”);
• Concession Contracts Regulations 2016;
• Utilities Contracts Regulations 2016; and
• Defence and Security Public Contracts Regulations 2011 (“DSPCR 2011”).

The new thresholds

• £5,336,937 (from £4,733,252) for public works contracts under PCR 2015, DSPCR 2011 and Utilities Contracts Regulations 2016;
• £138,760 (from £122,976) for public supply contracts and public service contracts awarded by central government authorities, and their design contests under PCR 2015;
• £213,477 (from £189,330) for public supply contracts and public service contracts awarded by sub-central contracting authorities, and their design contests under PCR 2015;
• £426,955 (from £378,660) for public supply contracts and public service contracts under Utilities Contracts Regulations 2016 and DSPCR 2011; and
• £5,336,937 from £4,733,252) for public concession contracts under Concession Contracts Regulations 2016.
• The stated thresholds for small lots, below-threshold contracts and services contracts governed by the so-called “light-touch” regime under the Public Contracts Regulations 2015 remain unchanged. However, the PPN states that contract values should be estimated inclusive of VAT for compliance with all thresholds.

Please contact us if you have any questions.