OJEU Thresholds and Public Procurement - Update 2025

OJEU and UK Procurement Thresholds: 2024-2025 Update

If you're a UK business looking to participate in public sector contracts, you'll need to understand both OJEU and UK procurement thresholds. These thresholds determine whether a contract must be advertised in the Official Journal of the European Union (OJEU) or on the UK's Find a Tender service (FTS). In this article, we'll provide you with the most up-to-date information on procurement thresholds for 2024-2025, as well as the implications of the new Procurement Act.

OJEU Thresholds

The OJEU thresholds for 2024-2025 are as follows:

These thresholds apply across 2024 and 2025 and are not inclusive of VAT. Contracts with values equal to or exceeding these thresholds must be published in the OJEU.

UK Procurement Thresholds

Following the UK's exit from the EU, the UK government has published updated procurement thresholds for public sector contracts, which came into effect on January 1, 2024. These thresholds are in line with the World Trade Organisation's Government Procurement Agreement (GPA) and are revised every two years to account for currency fluctuations.

UK-wide Thresholds (England, Wales, and Northern Ireland)

The new thresholds for public contracts in England, Wales, and Northern Ireland are as follows:

Utilities Contracts:

• Supplies and Services: £429,809
• Works: £5,372,609

Concession Contracts: £5,372,609

These thresholds are inclusive of VAT. The estimated contract value should continue to be provided exclusive of VAT for the publication of notices under the UK regulations. However, when the Procurement Act 2023 comes into effect (expected in Autumn 2024), the estimated contract value must be provided inclusive of VAT for the publication of notices under the new legislation.

Scotland

The procurement thresholds for Scotland are as follows:

Small Lots:

• Supplies and Services: £70,778 (including VAT), £58,982 (excluding 20% VAT)
• Works: £884,720 (including VAT), £737,267 (excluding 20% VAT)

Utilities Contracts (Scotland) Regulations 2016:

• Supplies and Services: £429,809 (including VAT), £358,174 (excluding 20% VAT)
• Works: £5,372,609 (including VAT), £4,477,174 (excluding 20% VAT)

Concession Contracts:

• Threshold: £5,372,609 (including VAT), £4,477,174 (excluding 20% VAT)

Procurement Reform (Scotland) Act 2014:

• Public contract (other than a public works contract): £50,000 (excluding VAT)
• Public works contract: £2,000,000 (excluding VAT)

Wales: Additional Considerations

In addition to the UK-wide thresholds, the Procurement Act 2023 (Wales) Guidance on Thresholds highlights the following:

• For devolved Welsh authorities (DWAs), a "notifiable below-threshold contract" is a regulated below-threshold contract with an estimated value above £30,000 (inclusive of VAT). Any contract valued above this threshold will require a contract details notice to be published by all DWAs.
• If a Welsh central government authority (CGA) is procuring under a reserved procurement arrangement, such as a Framework or Dynamic Market established by Crown Commercial Services, the below-threshold value that would apply is £12,000 (inclusive of VAT).
• The Social Partnership and Public Procurement (Wales) Act 2023 (SPPP Act) places a socially responsible procurement duty on Welsh contracting authorities and introduces additional duties for "prescribed contracts" and "major construction contracts" (public contracts that are works contracts with an estimated value of no less than £2,000,000 inclusive of VAT).

Procurement Act Implications

The Procurement Act 2023 Guidance on Thresholds confirms that the current thresholds will remain in place for the time being. The majority of the provisions in the Procurement Act 2023 only apply to public contracts with an estimated value (including VAT) equal to or exceeding the threshold amounts set out in Schedule 1 of the Act. These thresholds are critical in ensuring that contracting authorities understand when they need to comply with the standard provisions in the Act.

Find a Tender Service (FTS)

Since the UK's departure from the European Union, the UK has established the Find a Tender service (FTS) for publishing procurement opportunities above the relevant thresholds. The FTS replaces the OJEU and Tenders Electronic Daily (TED) for UK public sector contracts.

Calculating Contract Values

To determine whether a contract falls within the scope of the procurement regulations, it's essential to estimate the contract value accurately. The legislation provides guidance on how to estimate the value of the proposed tender. If, after calculation, the value of the contract exceeds the appropriate threshold, it will fall within the scope of the legislation.

The method of calculation used depends upon the type of procurement to be undertaken:

• Supplies
• Services
• Works

Here's a step-by-step guide to estimating contract values based on the type of procurement and the relevant thresholds:

Supplies:

1. Determine the total amount payable over the full duration of the contract, including VAT.
2. If the contract is for a fixed term, multiply the monthly value by the number of months.
3. If the contract is for an indefinite period or for a period exceeding 12 months, multiply the monthly value by 48.
4. For regular or renewable contracts, use the value of the previous 12 months or the estimated value of the coming 12 months, whichever is higher.
5. Compare the estimated value with the relevant threshold to determine if the contract falls within the scope of the procurement regulations.

Services:

1. Determine the total amount payable over the full duration of the contract, including VAT.
2. For fixed-term contracts, multiply the monthly value by the number of months.
3. For contracts without a fixed term or exceeding 48 months, multiply the monthly value by 48.
4. For regular or renewable contracts, use the value of the previous 12 months or the estimated value of the coming 12 months, whichever is higher.
5. For insurance services, use the premium payable and any other form of remuneration.
6. For banking and other financial services, use the fees, commissions, interest, and any other form of remuneration.
7. For design contracts, use the fees, commissions payable, and any other form of remuneration.
8. Compare the estimated value with the relevant threshold to determine if the contract falls within the scope of the procurement regulations.

Works:

1. Use the total value of the work, including the value of any goods and services necessary for executing the works and supplied by the contracting authority.
2. Include all options, renewals, and prizes or payments to candidates or tenderers, if applicable.
3. Compare the estimated value with the relevant threshold to determine if the contract falls within the scope of the procurement regulations.

It is important to note that the estimated value should be based on the total amount payable, including VAT, and should consider the full duration of the contract, including any options or renewals. If the estimated value exceeds the relevant threshold, the contract will be subject to the procurement regulations.

You may also be interested in:

• Green Book & VFM
• Procurement Compliance & Value for Money
• Managing Public Money

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Frequently Asked Questions (FAQ)

1. How long will the current procurement thresholds remain in place? The current procurement thresholds are expected to be updated from January 1, 2026. The thresholds are revised every two years to account for currency fluctuations and to align with the UK's international obligations under the World Trade Organisation's Government Procurement Agreement (GPA).
2. Are the procurement thresholds inclusive of VAT? The UK procurement thresholds are inclusive of VAT, while the OJEU thresholds are not. When the Procurement Act 2023 comes into effect (expected in Autumn 2024), the estimated contract value must be provided inclusive of VAT for the publication of notices under the new legislation.
3. What is the Find a Tender service (FTS)? The Find a Tender service (FTS) is the UK's replacement for the OJEU and Tenders Electronic Daily (TED) following the UK's exit from the European Union. It is the platform where UK public sector contracts above the relevant thresholds are published.
4. Do the procurement thresholds differ for Scotland, Wales, and Northern Ireland? While the UK-wide thresholds apply to England, Wales, and Northern Ireland, there are some specific additional considerations for Wales. Scotland has its own set of procurement thresholds, which are outlined in the article.
5. How do I determine if a contract falls within the scope of the procurement regulations? To determine if a contract falls within the scope of the procurement regulations, you need to estimate the contract value accurately. If the estimated value exceeds the appropriate threshold, the contract will be subject to the procurement regulations. The legislation provides guidance on how to estimate the value of the proposed tender based on the type of procurement (supplies, services, or works).
6. What is the light touch regime for services? The light touch regime applies to certain services that are considered to be of lower interest to cross-border competition, such as health, social, and education services. The procurement regulations provide a more flexible approach for these services, with higher thresholds and less stringent procedural requirements compared to other types of contracts.
7. What are the implications of the Procurement Act 2023 on the procurement thresholds? The Procurement Act 2023 confirms that the current thresholds will remain in place for the time being. The majority of the provisions in the Act only apply to public contracts with an estimated value (including VAT) equal to or exceeding the threshold amounts set out in Schedule 1 of the Act.
8. What are the implications of the Procurement Act for charities? View our specific article.