From 1 January 2012, the threshold values that trigger the need for a regulated public procurement exercise in the UK and across Europe have been increased.

Commission Regulation (EC) No. 1251/2011 of 30 November 2011 (the “Regulation”) amends the existing European directives that set out the EU public procurement rules and will come into force on 1 January 2012. Utilities-related procurement (governed by Directive 2004/17/EC of 31 March 2004) as well as non-utilities-related procurement (governed by Directive 2004/18/EC of 13 July 2009) will be affected by the change.

Under the EU public procurement rules, all requirements leading to a contract awarded by a public or government body – including utilities – must follow openly advertised tendering and contract award procedures, and comply with principles of transparency, fairness and equality. A number of exceptions exist, among which is that the rules only apply to requirements above a certain financial threshold: i.e., small contracts are not required to follow the same rules.