Services Threshold

The minimum contract value above which public bodies must follow full EU-derived procurement procedures for service contracts, currently £177,897.50 excluding VAT.

How it works

The Services Threshold establishes the minimum contract value that triggers mandatory compliance with the full Public Contracts Regulations 2015 for service procurements. Currently set at £177,897.50 (excluding VAT), this threshold applies to central government departments, executive agencies, and non-departmental public bodies.

For other contracting authorities such as local authorities, NHS trusts, and housing associations, a higher threshold of £213,477.00 (excluding VAT) applies. These thresholds are reviewed and updated every two years in line with the Government Procurement Agreement.

Why it matters

Once a service contract exceeds these values, contracting authorities must:

• Publish contract notices in Find a Tender
• Follow prescribed procurement procedures (open, restricted, competitive procedure with negotiation, or competitive dialogue)
• Apply mandatory standstill periods
• Meet specific timescales and transparency requirements
• Ensure compliance with treaty principles of equal treatment, non-discrimination, and proportionality

Contracts below the Services Threshold still require competitive procurement under the authority's own standing orders and must comply with transparency and value for money requirements, but without the full regulatory framework. The threshold prevents minor service contracts from being subject to disproportionately burdensome procedures whilst ensuring significant public expenditure receives appropriate scrutiny and competition.

Calculating contract values requires aggregation of similar services across the organisation and consideration of potential extensions or variations.