Definition
Procurement Threshold
The value at which the full procurement rules apply.
A procurement threshold is a value, set out in the relevant legislation's schedules and reviewed periodically, above which a public contract must follow the full formal procurement regime, including advertising on Find a Tender and following prescribed procedures. Contracts below threshold still usually require some form of fair competition under a buyer's own procurement policy, but with lighter-touch rules.
How thresholds work in practice
Thresholds differ by type of buyer (central government, wider public sector, or utilities) and by type of contract (goods and services, works, or certain light-touch services such as some health and social care contracts). They are expressed inclusive of VAT and are reviewed roughly every two years, so the exact figures change over time.
Suppliers should always check the current published thresholds rather than relying on a figure quoted in an older article or template, since getting this wrong can affect legal rights around challenges and remedies.
- Thresholds vary by buyer type: central government, sub-central/wider public sector, utilities
- Separate, higher thresholds usually apply to works contracts
- Light-touch regime thresholds apply to certain health, social and other specified services
- Figures are reviewed periodically and quoted inclusive of VAT
- Below-threshold contracts still typically require fair and open competition under domestic transparency rules
Why the threshold matters for your bid strategy
Above-threshold contracts must be advertised nationally, generally follow strict procedural and standstill requirements, and give unsuccessful bidders formal remedies. Below-threshold opportunities are often quicker to run, may use simplified documentation, and are more likely to be found on a buyer's own portal or Contracts Finder rather than Find a Tender.
Smaller suppliers sometimes focus deliberately on below-threshold work because the bidding process is proportionately lighter, while larger suppliers may focus resources on above-threshold frameworks and contracts where volumes justify the compliance overhead.
Frequently asked questions
- What is the current UK procurement threshold?
- Thresholds vary by contract type and buyer and are reviewed periodically, so there is no single fixed figure that always applies. Always check the current values published by the Cabinet Office or in the relevant legislation before assuming a contract is above or below threshold.
- Do thresholds include VAT?
- Yes. Procurement thresholds are generally expressed and calculated inclusive of VAT, so buyers must estimate the total contract value including VAT when deciding which regime and procedure applies.
- What happens if a contract is below threshold?
- Below-threshold contracts are not required to follow the full above-threshold procedure or advertise on Find a Tender, but most public buyers still apply proportionate competition rules from their own procurement policy and domestic transparency requirements.
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