Definition
Below-Threshold Contract
A contract worth less than the regulated threshold.
Below-threshold refers to public contracts valued under the financial thresholds that trigger the full procurement regime, meaning buyers have more flexibility in how they run the process, though the Procurement Act 2023 still imposes baseline obligations such as fair treatment and, for many contracts, publication requirements. Below-threshold work is a significant route into public sector business for SMEs.
What changes below threshold
Above the relevant thresholds, contracting authorities must follow detailed rules on procedure, advertising and timescales set out in the Procurement Act 2023. Below threshold, buyers have considerably more discretion over how they run a competition, and can often use simpler, faster processes, such as obtaining a small number of quotes rather than a full formal tender.
This does not mean below-threshold procurement is unregulated: contracting authorities remain subject to general public law duties of fairness and non-discrimination, and many public bodies have their own internal financial and procurement rules (often called standing orders or a procurement policy) setting out how below-threshold spend must be handled, such as minimum numbers of quotes required at different value bands.
Transparency for below-threshold contracts
The Procurement Act 2023 introduced greater transparency expectations for lower-value public spending than existed previously, including requirements for many contracting authorities to publish details of below-threshold contract opportunities and awards, intended partly to improve SME access to smaller-value work that was previously less visible.
- Many below-threshold opportunities are still published on the central government's find-a-tender or e-tendering portals
- Buyers may run informal processes, such as requesting three quotes, rather than a full tender
- Below-threshold work can be a useful way for new suppliers to build a public sector track record
- Buyer-specific rules on below-threshold spend vary, so check individual buyer policies where published
How suppliers should approach below-threshold opportunities
Because processes are lighter-touch, decisions can be made faster and relationships matter more; being known to a buyer's procurement or budget-holding team can genuinely help win smaller-value, informal competitions. Suppliers should still respond professionally and address whatever criteria the buyer sets, since even informal quote requests are usually compared on price and quality rather than awarded automatically to a favoured supplier.
Monitoring below-threshold notices on relevant portals, alongside building direct relationships with likely buyers, is a practical way for smaller suppliers to build a track record before bidding for larger, above-threshold contracts.
Frequently asked questions
- Do below-threshold contracts have to be advertised?
- Not always, but the Procurement Act 2023 introduced wider transparency expectations, and many contracting authorities do publish below-threshold opportunities, particularly above a smaller internal value threshold. Check individual buyer practice and relevant portals.
- Can a buyer just award a below-threshold contract to whoever it likes?
- No. Even without the full statutory procedure, general public law duties of fairness apply, and most buyers have internal rules requiring some level of competition or comparison, such as a minimum number of quotes, for below-threshold spend.
- Is below-threshold work worth pursuing for a new supplier?
- Often yes, since it provides a lower-barrier route to build public sector experience, references and relationships that can support stronger bids for larger, above-threshold contracts later.
Related terms