Those new Public Procurement Thresholds

 Here are those new Threshold values I mentioned earlier.  They apply from 1 January 2026  and will not change for 2 years.

The values are lower in both GBP and EUR, despite global inflation being in the range of 3% to 5% (obviously significantly different in any individual country).  I have to say that I am not sure what is happening here...

The Thresholds are denominated in Special Drawing Rights (SDR) which are based on a basket of currencies including Sterling and EUR (and USD, Yen and Yuan).  So they should not change a lot.  And I cannot see whether the underlying values in SDR have changed, nor why they have not been adapted to take account of inflation.

Anyway, the new (and old) values for the UK are below.

New Public Procurement Thresholds from 1 January 2026

 And they are lower than at moment. (just a bit)

Some people says this means more competition as more contracts will be subject to the threshold and there require competition.

WELL, given that the PA2023 increases the opportunities for avoiding competition the lowering of the threshold is only a marginal step back in the direction of competion.

 

And of course the thresholds are not actually set by the UK government but the WTO GPA.

 

Given the significant inflation over the past few years this is a significant lowering of (most of) the thresholds.  I'll be interested in the response.  I suspect many contracting authorities actually would have preferred a significant increase.

Tariffs - wow!

 The world has changed.  It is not the same is it was on 31st March 2025.

I'm not in a position to tell you what to do in response, apart from to suggest that doing nothing is not an option.

The good news for Procurement and Supply Chain professionals is that our organisations now need us, and need us to be on top of our game.

Even if you management has not requested you to do so, I recommend you look hard at your existing supply chains and review your Risk Registers.  Consider what might change and what your options are (if you have any).

The situation is likely to remain fluid for quite some time.  Good luck!

Thoughts on the new UK Green Paper on Public Procurement

 A few passing thoughts on the new Green paper (which I will try to add to as it sinks in).

The Paper is here.

First, the ability to limit contracts below threshold to SMEs is a consequence of being outside the EU procurement directive, and reflects the fact that the WTO GPA (World Trade Organisation Government Procurement Agreement) only applies above the relevant threshold.  (note that thresholds will remain).

Is this a good idea?  Well it depends on whether it is used.  Central Government already has a target of 1/3 spend with SMEs, (a target that is fudged, but that is another issue) and this should help.  I suspect that it will be of use for Local Authorities who strongly prefer to spend their money locally, and it will help to overcome the advantage the "big players" have by using strong bid writing teams.  I do suspect though that the SMEs will end up being the bigger firms (near the 250 person limit) rather than micro-businesses (fewer than 10 employees).

• Allowing buyers to include wider social benefits of the supplier, such as economic, social and environmental factors, when assessing who to award a contract to, while also still considering value for money

Again, I suspect Local Authorities will love this and look for it to be a charter to award contracts to local business - regardless of other constraints.  Could be good, could lead to local buying leading to poor value for money.

• Giving buyers the power to properly take account of a bidder’s past performance, allowing them to exclude suppliers who have failed to deliver in the past

This builds on the existing discretionary exclusion, and could be a good "whip" to complement the "Carrots" of further contracts.  We do need to address the way that the make money is to win the contract, regardless of whether you do a good or poor job.  It creates an incentive to invest in bid writing not delivery.

• A new unit to oversee public procurement with powers to improve commercial skills of public sector contractors

OK, UK Government - you know where I am.  Happy and willing to run help improve commercial skills.  It is my job.  Give me a call.  

Flippancy aside this has long been an unmet need, and the new regulations will make it urgent.

• A single digital platform for registering contracts, improving transparency and making life significantly simpler for business

This makes sense and I could not understand the previous desire to have 2 platforms.  Though I do wonder how it will fit in with the developed procurement powers in Scotland, Wales and Northern Ireland who all have their own platforms and rules.

We propose enshrining in law, the principles of public procurement: value for money, the public good, transparency, integrity, efficiency, fair treatment of suppliers and non-discrimination.

This is actually more principles than we have at the moment, but I don't see anything to object to here with the possible exception of the "public good" - who determines that?  How do we measure it objectively?

 We propose establishing a single digital platform for supplier registration that ensures they only have to submit their data once to qualify for any public sector procurement.

This is a good idea, and was the basis of the ESPD (European Single Procurement Document) that the government previously and ostentatiously refused to apply in England (preferring to stick to the Selection Questionnaire SQ) though Scotland and Wales used it.

We propose legislating for a new Dynamic Purchasing System (DPS+)

Colour me not convinced.

Deloitte and Prime Minister Theresa May

I spat my coffee out when I read that Deloitte decided not to bid for UK government contracts because PM May was angry with them about a leaked document concerning Brexit.

Note that this was a "voluntary" decision by Deloitte - see Guardian here. There was not official sanction for Deloitte for the link, and is in no way linked to Deloitte's performance on current contracts.  For Deloitte this is a commercial decision to appease a politician in the hopes of currying favour.

This is a very slippery slope.  If the public procurement process can be used by politicians to influence contract award, we are well on the way to corruption and influence peddling.  It may be "accepted practice" for businesses who have upset a minister to "voluntarily" suspend bidding.  This corrupts the fairness, openness and transparency required in public procurement.  If only friends of the government bid we are all losers.

I was pleased to see that Pedro Telles of the excellent www.telles.eu  thinks the same (and said it much earlier than me).  And in the interests of political balance he also points out that Jeremy Corbyn's comments on using Public Procurement to influence the pay structure of suppliers is equally preposterous. and would break the WTO Public Procurement Agreement.

Again, it cannot be said enough: If politicians interfere in the public procurement process we are opening the door to corruption, and the losers will be the public.

This is not the same as saying that Public Procurement cannot be used as an instrument of policy - for example to promotes SMEs and apprenticeships.  But once politicians start saying who can and cannot win contracts we are in banana republic territory.

Brexit and Public Procurement

So now the United Kingdom of Great Britain and Northern Ireland has voted to leave the European Union, what will change in our Public Procurement?

In the short term, nothing much.  What do I mean by the short term?  Well at least two years, which is how long it will take Article 50 to be applied to allow us to leave.  Bearing in mind the politics, than probably means at least 2 and a half years so 2019.  Some commentators are saying 2020 would be more realistic, but who knows? 

What will happen then?  A lot will depend on what happens in the intervening time.  Will the UK stay together or break up?  Which could lead to quite different procurement regimes in the 4 major countries (which are at the moment only a bit different).

It is likely that whatever else happens England (largest country in the UK) will be pulling out of the EU procurement rules, so what will happen in England?

Well again, possibly not a lot for a while.  The UK is a signatory to the World Trade Organisation Government Procurement Agreement which underpins much of the EU procurement regulations.  Given that outside of the EU we will probably use the WTO in redeveloping our trading relationships with other countries, it is fairly unlikely that we shall pull out of that agreement (at least not quickly).

The WTO GPA sets in place a series of rules for procurement above a certain value or threshold, which is the same as the one in the EU regulations.  So thresholds and processes will remain in place, but might be amended.

There would be no ability to appeal to the European Court of Justice as EU procurement directives would not apply (unless that is part of our settlement in leaving).

Could we have a Buy British or Buy English campaign?  Probably not because it would clash with the WTO GPA, and anyhow could have negative consequences on Value for Money (if the foreign providers do not provide better VfM we would not contract with them).

Things like the European Single Procurement Document (ESPD) that came in in April 2016 but still has not actually surfaced, may change some time in the future.

So lots or uncertainty, but given that we need rules for public procurement to avoid corruption and to obtain value for Money, and that we are already signed up to rules for this, and that changing public procurement policy is unlikely to be top of the agenda for a post Brexit country, I think we shall only be seeing small changes for the next 5 years or so.  After that, who knows?  As they say, a week is a long time in politics - let alone 5 years.  In the meantime PCR 2015 stays in place.

So there is still a point in going to EU Procurement training (well, I would say that wouldn't I?)  as nothing is going to change for a few years.  After that, then I am sure we will have new public procurement training to clarify the new rules as and when they emerge.