PPN 11/20: Below Threshold Procedures

In light of a proposed Public Procurement reform following the UK’s exit from the EU, the Government is looking to streamline public procurement processes. PPN 11/20 sets out the following new options for In-Scope Organisations to consider when procuring below threshold contracts:

1. In-Scope Organisations may reserve the procurement by supplier location; and
2. In-Scope Organisations may reserve the procurement for small and medium sized enterprises (“SMEs”) and Voluntary, Community and Social Enterprises (“VCSEs”).

When and to whom does PPN 11/20 apply?

PPN 11/20 applies from 1 January 2021 and applies to all In-Scope Organisations, which includes all Central Government Departments, their Executive Agencies and Non Departmental Public Bodies. Importantly, other contracting authorities are encouraged to apply the principles of PPN 11/20.

PPN 11/20 does not apply to below threshold procurements involving the provision of goods into Northern Ireland. This is due to the terms under the Northern Ireland Protocol following the expiry of the Transition Period on 31 December 2020.

What does PPN 11/20 do?

It allows In-Scope Organisations to reserve below threshold procurements by supplier location, and/or for SMEs and VCSEs. Reserving the procurement by supplier location allows In-Scope Organisations to run a competition and specify that only suppliers located in a geographic area can bid. If reserving by county only a single county should be specified, and In-Scope Organisations should not define by nations of the UK. Reserving the procurement for SMEs and VCSEs allows In-Scope Organisations to run a competition and specify that only SMEs and VCSEs can bid.

When can these options be used?

In-Scope Organisations can consider these options when procuring below threshold contracts. These options should be considered on a case-by-case basis, and can be exercised individually or together. The intention to reserve the procurement should be clear in the procurement documents. The Open procedure for below threshold contracts can continue to be used.

What are the conditions on reserving a procurement?

If an In-Scope Organisation chooses to reserve a procurement it should ensure it complies with the requirements of PPN 11/20, including ensuring value for money, managing risks, assessing the market, ensuring budgets are available and approved, using suitable model contracts, developing KPIs, undertaking supplier due diligence checks, keeping suitable records of commercial decisions, and publishing transparency notices. To ensure value for money, In-Scope Organisations should not directly award when reserving below threshold procurements under PPN 11/20.

In-Scope Organisations should also continue to comply with the requirements under Part 4 of the PCR where they apply to below threshold contracts, and ensure compliance with internal governance and procedures.

For further details on PPN 11/20 and its application, or any other public sector or procurement queries, please contact our Public Sector team who will be more than happy to assist you.