£10m threshold removed for UK infrastructure projects

Will Green is news editor of Supply Management
14 December 2016

The UK government has removed the £10m threshold that governs when procurement rules come into effect for infrastructure contracts.

As part of efforts to boost the UK steel industry, procurement guidance has been updated so it is more suitable for wider public sector use, including health organisations and local authorities, and more projects are covered.

At the same time the government has started publishing “indicative future steel requirements” on an annual basis. It has calculated it needs 3m tonnes of steel by 2020 across 18 projects, including HS2, Hinkley Point C and motorway upgrades.

“As well as providing greater visibility on upcoming projects needing steel, procurement guidance has also been extended to include projects below the current threshold of £10m and those from local and health authorities,” said the government.

The changes have been made primarily with steel in mind but they also apply to other materials including ceramics, cement and aluminium.

A Procurement Policy Note said: “There is no set value as to what constitutes a major procurement project, as this will differ between contracting authorities. It is therefore for contracting authorities to determine which of their procurements are major projects.

“The revised guidance is a practical guide on how to design major public procurement projects (involving steel) in a way that ensures the best value for money by recognising relevant wider social and environment benefits where appropriate.

“The revised guidance replaces existing guidance on procuring steel in major projects.”

Minister for the Cabinet Office Ben Gummer said: “I don’t want contracts going abroad if the best value for money bid is a British bid with all the social and economic benefits that brings.

“By updating our procurement approach on these major infrastructure projects we are creating a level playing field for UK steel.”

The changes build on previous work to support UK steel, including an emphasis on social factors in contracts.

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