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Procurement rules and legislation

In its capacity as local authority for the 'Square Mile', there are regulations at a European, national and local level which the City of London must follow when procuring goods, services and works and when establishing approved tender lists​.

EU procurement regulations

The City of London, in its role as local authority is subject to EU Directives governing Tender procedures.The European Union (EU) Procurement Directives, and the Regulations that implement them in the UK, set out the law on public procurement. Their purpose is to open up the public procurement market and to ensure the free movement of goods and services within the EU.

The rules apply to purchases by public bodies and certain utilities which are above set monetary thresholds. They cover all EU Member States and, because of international agreements, their benefits extend to a number of other countries worldwide.

Where the Regulations apply, contracts must be advertised in the Official Journal of the EU (OJEU) and there are other detailed rules that must be followed. The rules are enforced through Member States' courts, and the European Court of Justice (ECJ).

Further information about the EC Procurement Directives can be viewed at the SIMAP website

UK legislation

The City of London's Procurement processes are regulated by the Public Contracts Regulations 2015 which implement in England and Wales the EU Directive 2014/24/EU on public procurement.

The City of London also has a duty under Best Value legislation (introduced in April 2000) as laid down by Part 1 of the Local Government Act 1999 to fundamentally review its services and make arrangements to ensure continuous improvement having regard to economy, efficiency and effectiveness. Performance indicators and targets for improvement are set and published in an annual Best Value Performance Plan. The City of London recognises that effective procurement is at the heart of Best Value and that the Best Value review process will help deliver its commitment to provide the best possible services for the people of the 'Square Mile'.

Further information about Best Value is available on the Department of Communities and Local Government website . The City of London must also have regard to Part ll of the Local Government Act 1988 which prohibits "non commercial considerations" being taken into account when awarding contracts.

City of London Procurement Code

Procurement activities must also comply with the City of London's Standing Orders and Financial Regulations. These are the City of London's own internal rules that govern its operations.

City Procurement also has in place a Procurement Code (319KB) which integrates these local rules with those issued by the EU/UK e.g. Public Contracts Regulations 2015. Any procurement undertaken by the City must follow the City of London Procurement code.

An extract from the Procurement Code detailing the procurement procedures to be followed for the various thresholds is provided below:

Supplies and services
Type of procurement Threshold Guidance
Operational Purchasing Up to £10,000 Low value tenders can be undertaken at officers' discretion, providing Best Value principles are observed. Where a Corporate Contract for supplies and services exists it must be used.
One-off Purchasing >£10,000 – <£100,000 Request for Quote (RFQ) – a minimum of three firms to be invited to submit written quotations, including: one local firm, an SME or a Social Enterprise via capitalESoucring.
Strategic Purchasing (Advertise) >£100,000 – <EU threshold Tenders must be advertised via capitalEsourcing.
Strategic Purchasing (Advertise in OJEU) Above EU threshold Tenders must be advertised in the Official Journal of the European Union via capitalEsourcing
Works supplies and services
ProContract template Threshold basis Guidance
Operational Purchasing Up to £10,000 Low value tenders can be undertaken at officers' discretion, providing Best Value principles are observed. Where a corporate contract for supplies and services exists it must be used.
One-off Purchasing >£10,000 – <£400,000 RFQ or Invitation to Tender (ITT) – a minimum of three firms to be invited to submit written quotations or formal tenders including one: local firm, SME or Social Enterprise via capitalEsourcing
Strategic Purchasing (Advertise) £400,000 – <EU threshold Tenders must be advertised via capitalEsourcing
Strategic Purchasing (Advertise in OJEU) Above EU threshold Tenders must be advertised in the Official Journal of the European Union (see http://ted.europa.eu ) via capitalEsourcing

Local Procurement Directive

Except where there is a contract already in place, the Local Procurement Directive requires officers to invite a local supplier from one of the Local Procurement target boroughs to quote for all supplies, service and consultancy contracts valued between £10,000 and £100,000 and for works contracts valued between £10,000 and £400,000, where possible.

The Local Procurement target boroughs are:

  • City of London
  • Tower Hamlets
  • Hackney
  • Islington
  • Lambeth
  • Southwark
  • Lewisham
  • Waltham Forest
  • Barking & Dagenham
  • Haringey
  • Newham

In order to be awarded the contract, the local supplier will have to provide a competitive quote or tender, which offers the best value for money to the City. ​


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