Navigating Procurement Act Changes for Suppliers

Sales and bid managers must stay abreast of potential regulatory changes in the dynamic procurement landscape. While the proposed amendments to the UK procurement law regime have significant implications, particularly concerning contract values. Understanding these changes and strategising accordingly is paramount for effective sales and bid management.

The Impact of Contract Values and Procurement Thresholds

Contract values are a pivotal determinant for applying the proposed new procurement law regime. Certain obligations vary based on the value of the contracts being procured. This underscores the need for sales and bid managers to have a nuanced understanding of how these changes affect their operations.

Threshold Considerations:

  1. Full Application Thresholds:

The proposed regulations apply in full when contract values reach specific thresholds. For instance, for central government purchases, the threshold stands at £139,688 (or £116,406.67 plus VAT). This threshold marks the point where the Act’s provisions come into play comprehensively.

  1. Sub-central Authorities and Light Touch Services:

Different thresholds apply to sub-central authorities and light touch services procurement. Understanding these thresholds (£124,904 for sub-central authorities and £663,540 for light touch services) is essential for ensuring compliance and effective bid management strategies.

  1. Obligations at Higher Contract Values:

Contracts exceeding £5 million trigger additional obligations, including setting at least 3 Key Performance Indicators (KPIs) and disclosing information about unsuccessful bidders. Sales and bid managers should be vigilant about these requirements to streamline their processes and maintain transparency.

Navigating VAT Estimation Rules and Procurement Thresholds 2024

A significant aspect of the proposed new regime is calculating contract values exclusive of VAT. This adjustment may have slipped under the radar for many. Sales and bid managers must incorporate this change into their internal processes to avoid discrepancies and ensure compliance. Additionally, staying updated on the UK procurement thresholds for 2024 is crucial for bidding success.

As suppliers navigate the intricacies of the evolving procurement landscape, understanding the implications of contract values and procurement thresholds is paramount. By familiarising themselves with the thresholds, obligations, VAT estimation rules, they can effectively streamline their operations, mitigate risks, and capitalise on opportunities. Adapting to these changes proactively positions businesses for success in an increasingly competitive market.

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author avatar
Olha Tereshchenko