What are the new Public Procurement Thresholds for 2022?

Date: 25th Nov 2021   By: Gary Sadler   length: 5 minutes   Tags: Procurement Regulations  

New public sector procurement thresholds will come into force on 1st January 2022 and we are anticipating a new PPN to be published by the Cabinet Office detailing these changes imminently.

The revised financial thresholds will apply to all public procurements by schools, academies, multi-academy trusts, colleges and universities under the Public Contracts Regulations 2015 (PCR 2015) and the Concession Contract Regulations 2016 (CCR 2016).

Please note that from 2022 there will be a practical impact in the way that contract values under the above regulations are calculated.

At present the estimated value of the contract is calculated over the whole lifetime of the contract net of VAT. From 1st January 2022 contract values should be calculated inclusive of VAT which will needs to be taken into account when calculating the value of procurement exercises. In effect these changes have reduced the thresholds, capturing more contracts under the regime.

The financial threshold changes are summarised below. Schools, academies, multi-academy trusts, colleges, universities are classified as ‘sub central contracting authorities’ in respect of the threshold for Public Supply and Services (as highlighted in the grid). 

PUBLIC CONTRACTS REGULATIONS 2015

Contract Type Current Threshold From 1 January 2022
Public Works Contract £4,733,252 £5,336,937
Supplies and Services (Central Government) £122,976 £138,760
Supplies and Services (Sub-Central Contracting Authorities) £189,330.00 £213,477
'Light Touch Regime' Services £663,540 £663,540

CONCESSION CONTRACTS REGULATIONS 2016

Contract Type Current Threshold From 1 January 2022
Concession Contract (Works or Services) £4,733,252 £5,336,937

Frequently asked questions (FAQs) about the new Public Procurement Thresholds for 2022

 

What about procurements before 1st January 2022?

The threshold change only applies to new procurement processes started on or after 1st January 2022. For existing contracts, or procurements currently at the tender stage, the previous thresholds apply.

How do you calculate the total contract value?

To calculate the total contract value for the purpose of establishing whether The Regulations apply, always be sure to factor in the full duration of the contract (not the annual value), any optional extensions and the cost of any ancillary services, maintenance, equipment or spare parts that may increase total whole-life cost.

What if your contract exceeds the new thresholds?

You must advertise the opportunity on the Find a Tender Service and on Contracts Finder, following the procedural rules set down in The Public Contracts Regulations 2015 (The Regulations), before you can award the contract.

Do I need to complete a full tender process for every procurement over the new thresholds?

Using a framework agreement can remove the need to complete your own lengthy tender process whilst increasing efficiency and reducing risk. CPC provide a range of fully compliant framework agreements that cover key commodities and services.

Where can I get more information or support?

You can contact your CPC Regional Procurement Advisor for advice or if you require a procurement specialist to run your tender for you please get in touch with Tenet Education Services.