Public Sector Spending Limits and What They Mean

Once you start looking for contracts you might hear the terms ‘threshold’ and ‘standing orders’.  What do these mean?  Do these restrict what you can apply for?  In this article we tell you about thresholds and standing orders and what they mean to you selling to the public sector. 

Thresholds

Any public sector organisations publishing a contract opportunity over a certain value (known as a threshold) must advertise it in the OJEU.  The OJEU is the Official Journal of the European Union.  All opportunities above the OJEU threshold must be published here.  This is likely to change after the Brexit transition period.  There are different thresholds in place depending on the type of contract being awarded and the sector being advertised for.  Current thresholds can be found here.

These values exclude VAT and relate to the full length of the contract. 

Standing Orders

Public sector bodies have Standing Orders or Contract Procedure Rules which provide staff with a clear governance framework when buying goods, services or works for the public sector. 

Commonly for Scottish Local Authorities standing orders (currently) state that for contracts under the OJEU threshold must be dealt with in the following ways:

For contracts between £16,500 and £50,000 Quick Quotes are used

  • At least 4 competitive quotes must be obtained using Quick Quotes

  • As a minimum they must invite:

    • 2 SMEs with their principal place of business within the relevant local area or

    • New supplier the Council has not used before or

    • A Supported Business (where they can)

For contracts valued under £16,500 it is recommended they obtain 4 quotes including:

  • SMEs with principal business in the local area or

  • Supported Business or

  • New Supplier.

Read our previous blog which gives you information on Quick Quotes and Supplier Finder Profiles. 

If you’d like to speak to one of the team about selling to the public sector and positioning yourself to grow your business by winning public sector contracts get in touch. 

Shiona Campbell