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The financial threshold above which public works contracts must follow full EU/UK procurement procedures, currently £4,733,252 for most contracting authorities.
The Works Threshold sets the financial limit above which public sector bodies must follow full statutory procurement procedures for construction and engineering contracts. As of 1 January 2024, the threshold stands at £4,733,252 (excluding VAT) for most contracting authorities, including central government, local authorities, and NHS bodies.
For utilities and certain specialised sectors, different threshold values may apply under the specific regulations governing those areas.
Once a works contract's estimated value exceeds this threshold, contracting authorities must:
Works contracts below the threshold still require competitive procurement under the Public Contracts Regulations 2015, but authorities have greater flexibility in their approach. They must still achieve value for money and treat suppliers fairly, but can use simplified procedures without the full regulatory burden.
The threshold applies to the total estimated contract value over its entire duration, including any options or extensions. Where multiple related works contracts could be considered a single procurement, authorities must aggregate their values to determine if the threshold is exceeded.
The UK government reviews and updates procurement thresholds every two years, typically in January, to reflect economic conditions and maintain alignment with trade agreement obligations.