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New financial thresholds set for public procurement rules to apply

The European Commission has revised the financial thresholds for public contracts above which public procurement rules apply.26 Nov 2015

The changes will apply from 1 January 2016 and alter the thresholds set in the EU's Public Procurement Directive finalised last year.

Changes have also been made to the thresholds that apply to utilities contracts and concession contracts which are subject to separate EU laws also finalised in 2014. The new thresholds for those contracts also apply from the beginning of next year.

Under the changes, the procurement laws will apply to public works contracts worth €5,225,000, up from the current threshold set at €5,186,000. In the UK the new threshold expressed in pound sterling will be £4,104,394.

For supply and service contracts awarded by central government authorities and for design contests organised by those authorities the new threshold above which the public procurement regime will apply is €135,000, or £106,047. Some defence contracts fall into this category. The current threshold for contracts of this type is €134,000.

In the case of supply and service contracts awarded by sub-central contracting authorities and design contests organised by such authorities, the public procurement rules will in future apply to contracts worth €209,000, or £164,176. Some defence contracts fall into this category. The current threshold for contracts of this type is €207,000.

The threshold above which the public procurement rules will apply to public service contracts for social and other specific services, like health and education contracts, has not been altered from the one set in the Public Procurement Directive. That threshold will continue to be €750,000, or £589,148.

"Contracting authorities should bear in mind that they may still be subject to the procurement regime in respect of procurements which fall below the relevant thresholds," Stuart Cairns, expert in public procurement law at Pinsent Masons, the law firm behind, said. "Contracting authorities should always consider carefully whether the procurement regulations and/or the treaty obligations of equal treatment, non-discrimination and transparency apply and should seek legal advice in the event of any doubts."

The deadline for EU countries to implement the new Public Procurement Directive as well as the rules affecting utilities and concession contracts is 18 April 2016. However, the public procurement reforms have already been implemented in England, Wales and Northern Ireland.

Earlier this month a new EU regulation made new standard forms available for public bodies to use when procuring goods, works and services. That regulation applies from 1 December.