2022 Public Sector Tender Thresholds
Procurement thresholds for public sector tenders are updated for 2022. Associate Consultant, Carl Rogers, is an expert on public procurement. In this post he explains the changes and the importance of contract values.
The new procurement thresholds affect new tenders from 1st January 2022.
Why are Procurement Thresholds Important?
Public sector buyers must be aware of these thresholds. These are the values above which an advert must be placed to ensure competition. Failure to do so can result in legal action being taken against the contracting body.
The procurement thresholds are applicable to public purchasing. This includes government departments, local authorities, NHS Trusts, utilities, housing associations etc. They cover the following:
- The Public Contracts Regulations 2015
- The Concession Contracts Regulations 2016
- The Utilities Contracts Regulations 2016
- The Defence and Security Public Contracts Regulations 2011
See also EU Procurement Rules 2014 which brought in changes to ensure better value for money and improved quality. The reduction of red tape makes it easier for small and medium-sized businesses (SMEs) to tender. Post-Brexit the EU rules were transcribed into UK law in the form of the regulations mentioned above.
What has changed
Whilst it looks like the thresholds have increased, the new thresholds now take into account VAT. But opportunities are still advertised excluding VAT.
It is a bit confusing. The thresholds do not contain VAT as such. However, when the contracting Authority is planning a tender exercise, they must calculate the value in the normal way. Then add 20% VAT. If the VAT inclusive value exceeds the threshold, then the contracting Authority must publish their opportunity on the Find a Tender Service (FTS). However, they then must publish the opportunity in FTS without the 20% included.
Even though the thresholds appear to have increased, when the VAT is factored in, they have actually decreased.
The table below shows the new thresholds for 2022, including and excluding VAT:…