Procurement thresholds

How thresholds work

A threshold is not a universal price at which every procurement follows the same process. Under the Procurement Act 2023, a contract is generally a public contract for the Act's main provisions when it is not exempt and its estimated value, including VAT, reaches the relevant Schedule 1 amount. Different categories such as goods, services, works, concessions and special regimes can have different thresholds, and the figures can be revised.

Authorities estimate the whole potential value, not just the first purchase order. They should consider options, extensions, prizes, renewals and related lots where the rules require aggregation. Below-threshold contracts can still have transparency and competition requirements, and an authority must not split a requirement to avoid the rules.

What suppliers should do

Treat the value and regime shown in the notice as a starting point, then read the procurement documents. Check whether VAT is included, whether the estimate covers the maximum term and options, and whether the authority has identified an exemption or a special regime. Threshold status can affect which notices appear, whether a central digital platform record is required and which remedies or policy notes apply.

For example, a three-year service with two optional extension years should be assessed by reference to the expected maximum value where those options are part of the authority's plan. A framework's estimated value normally includes its anticipated call-offs. Use the current official table rather than an old blog or a remembered figure, especially after a scheduled threshold update.