On 24 November 2015, the European Commission set out the new minimum financial thresholds for contracts caught by the application of EU public procurement law.
According to our friends at Brabners solicitors:
“The new thresholds apply from 1 January 2016 and will remain fixed for the next two years.
The Public Contracts Regulations 2015 (the “Regulations”) regulate the procurement activities of “contracting authorities” in England and Wales which includes registered providers. The Regulations implement the 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 registered providers or other contracting authorities 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 registered providers and other contracting authorities 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 1 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) |
Registered providers and 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.
It will be disappointing news 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. Registered providers should be aware that the thresholds are fixed both in euros and sterling for the next two years.
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.”
If you would like more information about this or to discuss any issues regarding public procurement please contact:
Michael Winder
Associate, Commercial team
Tel: 0151 600 3085
Email: michael.winder@brabners.com