The Cabinet Office has updated the thresholds for procurements to which the full requirements of the Public Contract Regulations 2015 (PCR2015) apply. The update was announced in Procurement Policy Note 11/23 (PPN11/23).
For housing associations and local government the key thresholds are:
Public Works £5,372,609 Previously £5,336,937
Public Supplies £214,904 Previously £213,477
Public Services £214,904 Previously £213,477
These figures apply to all procurements commenced on or after 1st January 2024. Full details of the definition of 'commencement' can be found in the transitional provisions of The Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2023, link here.
As can be seen, these figures are only very slightly raised from the previous threshold levels. It should be noted that these figures continue to be the values inclusive of VAT.
The calculation as to whether PCR2015 applies is based on the VAT inclusive value but the value to be stated in the Public Contract Notices should be the VAT exclusive figure.
Once again, there is no change to the threshold figures for small lots (PRC 2015 - S6 (14)-(15)) and these remain at £884,720 and £70,778 for works and services/supplies respectively including VAT.
These figures are the total ascertainable value of the procurement, and so, when procuring using 'lots' it is the total value of the various lots and not the value of the contracts arising from the lots that should be used in calculating total value, and, contracts over a number of years, typically service and supplies contracts, should be valued including the costs over the whole contract period (not the annual cost) and should include any potential extensions.
In PPN11/23 there is reference to costs being calculated as exclusive of VAT for the purposes of the publication of notices (Action note 6 in the PPN). It is understood that this is intended to refer to the value of contracts stated in the Public Notices. This confusion should be resolved later this year when the Procurement Act 2013 comes into effect (expected in October). In the meanwhile the calculation as to whether PCR2015 applies is based on the VAT inclusive value but the value to be stated in the Public Contract Notices should be the VAT exclusive figure.
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