Below-Threshold Contract

A public contract with a value below the EU-derived thresholds that trigger full procurement regulations, subject to simplified procedures and reduced advertising requirements.

How it works

Below-threshold contracts are public procurement opportunities valued under the financial thresholds set out in the Public Contracts Regulations 2015. These thresholds are £189,330 for central government goods and services, £663,540 for construction works, and £189,330 for sub-central bodies (updated every two years).

Contracting authorities have greater flexibility when procuring below-threshold contracts. They are not required to follow the full procurement procedures mandated for above-threshold contracts, such as mandatory OJEU/Find a Tender advertising or specific timescales. However, they must still comply with Treaty principles of transparency, equal treatment, proportionality and non-discrimination.

Procurement approach

Authorities typically use simplified competitive processes for below-threshold contracts, often involving: - Direct invitation to tender from selected suppliers - Framework agreements or dynamic purchasing systems - Request for quotations from multiple providers - Publication on Contracts Finder (mandatory for contracts over £25,000)

The simplified nature allows for shorter timescales and reduced administrative burden whilst maintaining competitive principles.

Why it matters

Below-threshold contracts represent the majority of public procurement activity by volume. Proper management ensures value for money whilst avoiding the complexity and costs associated with full EU procedures. Authorities must balance efficiency with transparency requirements and consider cumulative spending that might aggregate above thresholds.

Failure to properly categorise contracts can result in legal challenges, particularly where artificial contract splitting occurs to avoid threshold requirements.