Procurement Policy Note (PPN) 04/21 Procurement Control Limits Frequently Asked Questions (FAQs)

1. When are the current Procurement Control Limits effective from?

Ans: The current Procurement Control Limits are effective from 6 March 2025.

2. Why were the Procurement Control Limits increased in 2025?

Ans:  Given the increase in inflation over the last five years, the Procurement Control Limits have been reviewed to ensure the transactional cost of procuring goods and services is proportionate to the contract value itself.

3. Why are there different thresholds for Utilities and the Department of Health?

Ans:  Due to the specialist nature of their work, Utilities and the Department of Health had higher Procurement Control Limits in previous versions of the Procurement Control Limits. These increased levels have been maintained in the updated version. 

4. What are the UK Procurement Thresholds?

Ans:   The majority of the provisions of the Procurement Act 2023 (as amended) only apply to public contracts which have an estimated value (inclusive of VAT) which is not less than the financial thresholds defined at Schedule 1 of the Procurement Act 2023 (as amended).

The thresholds are revised every 2 years to adjust for currency fluctuations. The revised threshold then takes effect from 1 January of every even year. The thresholds include VAT.

The current UK Thresholds can be found at Guidance: Thresholds (HTML) - GOV.UK.(external link opens in a new window / tab)

The UK has a duty to give access to its public procurement markets to suppliers from states with which it has a relevant trade agreement. The UK’s thresholds in its relevant trade agreements either align with or are higher than the thresholds in the UK schedules to the World Trade Organisation (WTO) Government Procurement Agreement (GPA). Accordingly, the UK remains compliant with its international obligations by aligning relevant thresholds in the Procurement Act 2023 (as amended) to the UK GPA thresholds.

5. Why are the Procurement Control Limits (below the UK threshold) exclusive of VAT?

Ans:  The Procurement Control Limits below the UK Threshold exclude VAT as the majority of public bodies to which public procurement applies can recover VAT.

6. Why is the UK Threshold inclusive of VAT?

Ans:  From 1 January 2022, it became necessary to include VAT when calculating the estimated value of the contract to determine whether the UK procurement legislation applies. The change was necessary to comply with the Government Procurement Agreement of which the UK is an independent member.  From January 2022,  the calculation of the estimated value of a contract was based on the total amount payable including VAT without making a deduction for any available VAT recovery.

The Procurement Act 2023 (as amended) requires contract notices to be published inclusive of VAT.

7. How do I identify if procurement legislation applies?

Ans:  The estimated value of the contract must include any options or extensions. Once the full cost of the proposed contract is known, VAT (at 20%) is added. If the estimated value including VAT is over the UK Procurement Thresholds (external link opens in a new window / tab), the procurement legislation will most likely apply and you should seek advice from your CoPE.

8. If a services procurement is estimated at circa £100,000 (£120,000 inclusive of VAT) and the contracting authority adheres to the Procurement Control Limits (below the UK Threshold), what is the position in the event that, after the contract is awarded, the cost increases above the UK Threshold? Is it still possible to continue with the contract?

Ans:  It is essential that the estimated contract value is calculated to include all possible options and extensions and should allow for unforeseen circumstances. This will ensure the estimated contract value can be robustly defended. Where a contracting authority has awarded a contract which they robustly estimated to be below the UK Threshold and which, due to circumstances outside their control, increases in value above the UK Threshold, there is a risk that the contract may become a convertible contract and therefore subject to procurement legislation.  In this circumstance we recommend you seek advice from your CoPE or legal advisors.

9. What is a ‘convertible contract’ under the Procurement Act 2023 (as amended)?

Ans:   The Procurement Act 2023 (as amended) provides for the concept of a ‘convertible contract’.  A convertible contract is a below-threshold contract that, as a result of a modification to its value, meets or exceeds the relevant UK Threshold and subsequently becomes a public contract.  This means that from the date it becomes a convertible contract, the contract and its management will become subject to procurement legislation^[1]

In this circumstance you should seek advice from your CoPE or legal advisors.

[1]For further information please refer to Cabinet Office guidance: - Guidance: Contract Modifications (HTML) - GOV.UK(external link opens in a new window / tab) 

10. Are there specific Procurement Control Limits for external consultancy spend?

Ans:  The Procurement Control Limits apply to all procurement spend. There are however rules for Accounting Officer and Ministerial Approval for consultancy spend. Guidance can be found at https://www.finance-ni.gov.uk/publications/guidance-letters-issued-use-consultants-and-external-professional-resources

11. When is the use of eTendersNI required?

Ans: Procurement competitions £50,000 or above (£65,000 for Utilities) must be published on eTendersNI (unless a Framework or Dynamic Shortlisting System is being used).

12. What qualifies as acceptable evidence that two prices have  been sought for procurement spend up to £10,000 (£20,000 for Department of Health)?

Ans:    Evidence may include screen shots from two suppliers’ websites or emailed prices or some equivalent evidence.

13. What is the difference between a quotation and a price check?

Ans:    Quotations should be sought from suppliers for contracts estimated at between £10,000 and £50,000 (£20,000 and £50,000 for Health Sector and £10,000 and £65,000 for Utilities). Quotations can include factors other than price. Quotations from suppliers should be in writing and will generally be on the supplier's terms and conditions, however the specification can include terms such as ownership of intellectual property rights, deadline for delivery, environmental credentials etc.

14. Do the Procurement Control Limits apply if you use a Framework Agreement established by another Contracting Authority (e.g. Crown Commercial Service)?

Ans:    Framework Agreements will typically be valued over the UK Thresholds and will have already been advertised on the UK Find a Tender website. Therefore, the Procurement Controls Limits will not apply.

15. Is there any requirement to consider Social Enterprises (SEs), Community and Voluntary Sector (CVS) or micro business when selecting suppliers to provide quotations for below £50,000 contracts (£65,000 for Utilities)?

Ans:   A key objective of Public Procurement Policy is to ensure public spend is used to create sustainable jobs, skills and businesses, therefore consideration should be given to seeking  quotations from SEs, CVS and micro businesses for contracts below £50,000 (£65,000 for Utilities)

16. Why is consultation with a CoPE necessary prior to when procuring construction works and related services of any value?

Ans:   Construction is a distinct area of procurement which is inherently high risk and works and services must therefore comply with a number of statutory provisions including the Construction Design & Management Regulations, the Planning Act, Building Regulations and other legislative requirements.

17. Is consultation with a CoPE necessary prior to procuring IT systems and services of any value?

Ans: Information Technology (IT) is a distinct area of procurement which can present risks related to interoperability and cyber security. Consultation should be carried out with a CoPE or your  IT department prior to purchasing any IT systems or services.

18. Must all Supplies and Services related contracts valued over £50k (£65,000 for Utilities) be procured through a CoPE?

Ans:    Procurement competitions £50,000 of above (£65,000 for Utilities) must be published on eTendersNI (unless a Framework or Dynamic Market is being used).  The requirement to use a CoPE is generally formalised through relevant Service Level Agreements (or equivalent) between the CoPE and their clients.