Threshold Review Period (Biennial)

EU procurement thresholds are not static. They are pegged to international trade commitments made under the World Trade Organization Government Procurement Agreement (GPA), which uses Special Drawing Rights (SDR) as its reference currency. Because the SDR-to-euro exchange rate fluctuates, the European Commission reviews and publishes updated threshold values every two years to ensure that the euro thresholds continue to reflect the agreed GPA values accurately.

What is the threshold review period (biennial)?

Every two years, the European Commission publishes a new Regulation setting revised threshold values for EU procurement under Directives 2014/24/EU, 2014/25/EU, 2014/23/EU, and 2009/81/EC. The new values take effect on 1 January of the relevant year (i.e., every two years starting from 1 January 2016, then 2018, 2020, 2022, 2024, and so on).

The calculation process is as follows. The GPA fixes threshold values in SDR. The Commission calculates the average EUR/SDR exchange rate over a defined reference period (typically the 24 months preceding the review). The SDR values are then converted into euros at that average rate, and the results are rounded to the nearest 1,000 euros. Published threshold changes are typically modest, reflecting the relative stability of the euro against the SDR basket of major currencies.

The Commission publishes the new values in the Official Journal of the European Union, and they apply automatically across all EU member states from the date of entry into force. Member states do not need to amend their national implementing legislation each time thresholds change, because the directives cross-reference the Commission's published values.

Why it matters for bidders

For bidders, the biennial review creates a predictable cycle. Thresholds effective from 1 January of each even-numbered year can be planned around. If you operate at or near a threshold value, it is worth checking whether the next biennial revision might shift a significant category of contract into or out of the above-threshold band.

The biennial review also affects UK procurement thresholds. Although the UK has left the EU and now operates its own procurement legislation under the Procurement Act 2023, UK thresholds are similarly derived from GPA SDR values and are reviewed on a comparable cycle through UK statutory instruments. The UK government publishes updates to its thresholds separately from the EU process, but the underlying SDR arithmetic is the same.

Example

Following the 2022 biennial review, the EU central government services threshold was set at 139,000 euros for the 2022-2023 period. In the 2024 review, reflecting two years of EUR/SDR movements, the Commission raised this figure to 143,000 euros for the 2024-2025 period. A contracting authority running a framework starting in January 2024 must apply the 143,000-euro threshold, not the previous 139,000-euro figure.

Frequently Asked Questions

Who decides what the SDR values are under the GPA?

The GPA values are negotiated and agreed by the parties to the WTO Government Procurement Agreement. The EU, as a single contracting party, negotiated the current GPA SDR thresholds as part of the revised GPA that came into force in April 2014. Changes to those underlying SDR values would require a further GPA negotiation among all parties.

Do all EU member states apply the same revised thresholds at the same time?

Yes. Because the threshold values are set by EU Regulation and directly applicable in all member states, they take effect simultaneously across the EU on 1 January of the relevant year. There is no transposition lag for threshold changes, unlike the initial implementation of the directives.

Is there a risk that thresholds could decrease in a biennial review?

Yes, in principle. If the euro strengthens significantly against the SDR basket between reviews, the euro-equivalent of the SDR thresholds could fall, meaning more contracts would be drawn into full directive compliance. In practice, reviews have tended to produce modest upward adjustments or near-flat results, but a material strengthening of the euro would produce a downward revision.