Welsh Procurement Policy Note (WPPN) 012: Guidance on reserving below threshold procurements for devolved Welsh authorities

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• A prosperous Wales
• A resilient Wales
• A more equal Wales
• A Wales of cohesive communities
• A globally responsible Wales

• This Welsh Procurement Policy Note (WPPN) is effective from the date of commencement of the Procurement Act 2023 and the Procurement (Wales) Regulations 2024. For procurements started prior to this date (24 February 2025), please refer to WPPN 05/21.
• It has been updated to reflect changes introduced by the Procurement Act 2023 and the Procurement Regulations 2024, such as new terminology. It does not constitute a change in policy.
• Any policy should be read in conjunction with the Wales Procurement Policy Statement, the Procurement Act 2023, the Procurement (Wales) Regulations 2024 and the Social Partnership & Public Procurement (Wales) Act 2023.
• It should not be treated as legal advice and is not intended to be exhaustive – contracting parties should seek their own independent advice as appropriate. Please also note that the law is subject to constant change and advice should be sought in individual cases.
• The note assumes a certain level of knowledge of public procurement. It is available via the Welsh Government website GOV.WALES and any queries should be directed to CommercialPolicy@gov.wales or via the Welsh Governments’ customer services.
• References to the ‘Procurement Act 2023 and the Procurement (Wales) Regulations 2024’ will be expressed herein as “the Procurement Regime”.

1.1 WPPN 012 adopts and builds on the recently published UK government Procurement Policy Note PPN 005: Reserving below threshold procurements and associated guidance PPN 005: Guide to reserving below threshold procurements ("UKG PPN 005 Guide") by the Cabinet Office.

1.2 UKG PPN 005 provides information and associated guidance on the options available to “In Scope organisations” (in England, “In Scope organisations” refers to central government departments, their executive agencies and non-departmental bodies) to streamline and simplify procurement in relation to contract spend on goods, services and works contracts with a value below the applicable thresholds. It also encourages In Scope organisations to reserve low value tenders for Small and Medium sized Enterprises (SMEs)/ Voluntary, Community and Social Enterprises (VCSEs), and suppliers in specific geographical areas.

1.3 “The Procurement Act (section 5 of “the Act”) defines a below-threshold contract as:

1. a contract for the supply, for pecuniary interest, of goods, services or works to a contracting authority
2. a framework, or
3. a concession contract, that has an estimated value of less than the ‘threshold amount’ for the type of contract.

1.4 A contract above the ‘threshold amount’ is considered a ‘public contract’ (as defined in section 3 of the Act). The threshold amounts are set out in Schedule 1 of the Act. Please note that these thresholds are updated every 2 years so that the UK remains compliant with its international obligations, by aligning relevant thresholds in the Act to the UK government Procurement Agreement thresholds. The latest thresholds are available in the guidance on thresholds.

1.5 The Act further defines a “regulated below-threshold contract” as a below-threshold contract which is not an exempted contract, a concession contract or a utilities contract (section 84(1)). Section 84(2) of the Act clarifies that the below-threshold contract provisions in Part 6 of the Act do not apply to procurements undertaken by a school, a transferred Northern Ireland authority (unless under a reserved or devolved Welsh procurement arrangement), or under a transferred Northern Ireland procurement arrangement (i.e. using a framework or dynamic market established by a transferred Northern Ireland authority - please see section 114 of the Act for definitions of the applicable procurement arrangements under the Act). Please see section 84 of the Act for further details.

1.6 DWAs should note that the thresholds when publishing notices in relation to ‘regulated below-threshold contracts’ for all devolved Welsh authorities (DWAs) (unless procuring under a reserved procurement arrangement) are different than as written in section 87(4) of the Act, and are as below:

• For all devolved Welsh authorities - not less than £30,000 including VAT.

1.7 A ‘reserved procurement arrangement’ is a procurement arrangement that is not “(a) a devolved Welsh procurement arrangement, (b) a transferred Northern Ireland procurement arrangement, or (c) a devolved Scottish procurement arrangement” (please refer to section 114(5) of the Procurement Act 2023). For example, a framework established by Crown Commercial Service would be a reserved procurement arrangement.

1.8 This WPPN provides information and guidance specifically to DWAs on reserving below threshold contracts. It also highlights references within UKG PPN 005 and UKG PPN 005 Guide that are different for DWAs.

2.1 This WPPN has been published to assist all DWAs in Wales, including Welsh Government departments, NHS Wales bodies, Welsh Government Sponsored Bodies, local authorities (local authorities are prevented from reserving contracts by geographical location by section 17(5)(e) Local Government Act 1988 - see paragraph 3.1.) and the wider public sector. This WPPN covers goods, services and works contracts being delivered in Wales.

2.2 Please circulate this WPPN across your organisation and to other relevant organisations that you are responsible for, drawing it to the specific attention of those in procurement, commercial and finance roles.

3.1 The UK has officially left the EU, meaning that we can exercise additional freedoms in relation to contract spend on goods, services and works contracts with a value below the applicable statutory thresholds. This guidance provides options for DWAs to reserve below threshold procurements explicitly for Small and Medium sized Enterprises (SMEs) and Voluntary, Community and Social Enterprises (VCSEs). It also provides options for certain DWAs to reserve contracts for suppliers in a specific geographic location. Please note however that reservation of contracts in this way is not permissible for local authorities in Wales (section 17(5)(e) Local Government Act 1988 prohibits a local authority from taking into account “the location in any country or territory of the business activities or interests of contractors” when making procurement decisions).

4.1 Reserving contracts

UKG PPN 005 advises that contracts below threshold should either be limited to a single county or be advertised UK-wide. Whilst Welsh Government concurs with this approach, we wish to extend the guidance further to also include the advertisement of contracts by UK region, provided that the geographical area of the region is accurately defined in the tender documentation. This will enable a greater supplier base and more opportunities for collaborative working.

DWAs may wish to consider, where appropriate, the following options for the procurement of below threshold contracts:

4.1.1 Reserving the procurement by supplier location

This means being able to run a competition and specify that only suppliers located in a particular geographical area can bid. This geographical area could be UK-wide, or it could be specified by a county or by a region of the UK, depending upon the objectives to be achieved, e.g. supporting UK domestic supply chains and promoting resilience and capacity, or where appropriate tackling economic inequality and supporting local recruitment, training, skills and investment. In line with UKG PPN 005, DWAs should not define by the nations of the UK (i.e. England, Scotland, Wales, and Northern Ireland) and where a county reservation is to be applied, only a single county may be reserved. Likewise, if reserved to a region, only a single region may be reserved. Supplier location should be described by reference to where the supplier is based or established and has substantive business operations rather than by the location of the registered office of the business alone.

AND

4.1.2 Reserve the procurement for Small and Medium sized Enterprises (SMEs) and Voluntary, Community and Social Enterprises (VCSEs)

This means being able to run a competition and specify that only SMEs and VCSEs can bid. Welsh Government agrees with the approach to reserve contracts sub-threshold to SMEs and VCSEs where appropriate. Given the value for services and for works, tendering support is available to both SMEs and VCSEs/the third sector to be able to bid for contracts of these values. Please visit Business Wales for further information on support available to small businesses.

4.1.3 These options should be considered on a case-by-case basis, and may be exercised on their own or together, where permitted. For example, a DWA may wish to reserve a procurement for suppliers based in a particular location (UK-wide, county or region of the UK) and for SMEs and VCSEs only.

4.1.4 DWAs should describe clearly in their procurement notices and documentation which reservations are to be applied, including the standardised definitions of SMEs / VCSEs and supplier location restrictions which should be described as accurately as possible.

4.2 Further considerations as regarding supplier location

4.2.1 When considering the location of a supplier, DWAs should consider whether the supplier is based or established in a particular location and has substantive business operations in that location. In this context, this means having a factory or other permanent base in that location from which meaningful business operations are being conducted rather than simply a registered office. For example, if the reservation is for the UK as a whole, or a region such as North Wales, this should not preclude foreign suppliers from participating as long as they are based or established and have substantive business operations in the UK in the first example or in North Wales in the second example.

4.2.2 DWAs should identify and manage fraud and corruption risks in their below threshold procurements, identifying appropriate safeguards and mitigating actions through which to manage those risks.

4.2.3 It is important to be aware of businesses setting up ‘phantom’ offices to be eligible for geographically defined contracts and therefore, the appropriate risk management should be carried out before undertaking below threshold procurements. To minimise this risk, DWAs should check supplier details at Companies House and other open information sources. DWAs could also seek verification directly from the supplier and / or where appropriate conduct a site visit to ensure that the supplier has a substantive business operation in that location.

4.2.4 If a DWA is not satisfied with the answers they have received, and the evidence suggests that the supplier is not substantially operating from a defined geographical location, then the DWA should not allow the supplier to participate in the procurement.

4.3 Sell2Wales

4.3.1 In this WPPN, Sell2Wales is the advertising portal for DWAs.

4.3.2 For opportunities published through Sell2Wales there must be sufficient support and promotion so that organisations are registered on the system and feel able to bid. Please visit Business Wales for further information on support available to small businesses.

Including but not limited to:

• The Procurement Act 2023
• The Procurement (Wales) Regulations 2024
• The Well-being of Future Generations (Wales) Act 2015

This WPPN applies to procurements commenced under the Procurement Regime and is therefore effective from the commencement of the Procurement Act 2023 and the Procurement (Wales) Regulations 2024 until it is superseded or cancelled.

This WPPN aligns with the following WPPS Principles:

Principle 1

We will leverage collaborative procurement activity in Wales to maximise long-term sustainable social and economic value outcomes from public spend.

Principle 5

We will support Welsh Government policy objectives relating to progressive procurement, such as the Foundational and Circular Economy, through collaborative, place-based (whether national, regional or local) procurement activity which nurtures resilient local supply chains.

Principle 10

We will promote value-based procurement which delivers optimum long-term outcomes for Wales.

8.1 To support the delivery of this WPPN, Sell2Wales offers the online “Quick Quote” (QQ) functionality to support DWAs. It allows buyers to obtain competitive quotes electronically for low value requirements by sourcing suppliers registered on Sell2Wales. QQ is used to obtain quotes for low value/low risk procurement exercises or run mini competitions within a framework.

8.2 Details of the QQ are created online through the notice creation wizard and distributed to a select list of suppliers. There are a number of ways in which to filter and select the suppliers that you want to invite to quote through Supplier Finder Profile. QQs are only distributed to the selected suppliers and are not made public on the portal. Therefore, only the individual supplier selected to quote can access the details of the quote and submit a response.

8.3 Once registered on Sell2Wales any supplier can be invited to quote from a buyer. To enhance a supplier’s chance of being invited to quote suppliers should complete a full and accurate Supplier Finder Profile. For a more detailed guide take a look at the Sell2Wales user guide.

8.4 Further information and guide on Quick Quote available on Sell2Wales.

8.5 Guidance

DWAs should refer to the following guidance documents that are available on Procurement Act 2023: guidance documents:

• Welsh Digital Platform (Sell2Wales)
• Notice Sequencing and Flowcharts
• Thresholds
• Below-threshold contracts
• Contract details notices

8.6 The Procurement (Wales) Regulations 2024 also provide further detail on relevant areas, such as Regulations 25 (below-threshold tender notices), 27 (transparency notices) and 37 (contract details notices: below-threshold contracts’).

8.7 Please also refer to ‘WPPN 004 - Transparency - Publication of Contract Details Notices’, which outlines the requirements for DWAs for publishing contract details notices for contracts valued at £30,000 (inclusive of VAT) and above.

If you have any questions about this WPPN, please contact;

• Commercial Policy – Polisi Masnachol: CommercialPolicy@gov.wales.

If you have any questions on support available for small business, please contact;

• Business Wales helpline: 03000 6 03000
• Sell2Wales helpline: 0800 222 9004

• UK Government Procurement Policy Note 005: Reserving below threshold procurements
• PPN 005 Guide to reserving below threshold procurements
• Sell2Wales User Guide
• Buyer User Guide – Quick Quote