New limits for small-scale public procurement: What does the amendment to the PPA bring?

Introduction

Small-scale public procurement (hereinafter “SSPP”) constitutes a substantial part of public expenditure, especially at the level of municipalities, cities and state-funded organisations. One of the key changes brought by the amendment to the Public Procurement Act (hereinafter the “PPA”) is aimed at smaller public contracts. The long-awaited and widely discussed legislative novelty brings, with effect from 3 April 2025, primarily an increase in the defined financial limits. What exactly is changing, why is it happening and what are the implications?

The main changes: New financial limits – more space

The current limits, set in 2014, no longer corresponded to reality. Inflation and rising prices for construction work and services have significantly pushed the boundaries of what can be considered a “small” contract. The amendment responds to this change by increasing the limits:

• For supplies and services, the limit moves from CZK 2 million to CZK 3 million excluding VAT.
• For construction works, the limit is shifted from CZK 6 million to CZK 9 million excluding VAT.

The limits apply to the total value of the contract. The threshold for the obligation to publish contracts on the profile of the contracting authority has also been increased – from CZK 500,000 to CZK 1 million. These new limits apply to tendering procedures initiated after the amendment had entered into force.

Impacts in practice

From the perspective of the contracting authorities, this is a significant loosening. Orders below these limits can be placed without the complex procedure under the PPA, often faster, less formally and with more freedom. This can greatly assist, for example, municipalities in addressing acute needs – repairs, maintenance, purchases of technical equipment. At the same time, the general principle of transparency and equal treatment remains in force.

For suppliers, the change means greater availability of contracts with lower participation costs – often, there will be no need to prepare complex tenders and attach large amounts of documentation. On the other hand, there is a risk that more contracts will be awarded without public announcement, which may limit competition and increase the risk of non-transparent procurement.

There are clear benefits to increasing the limits – mainly the simplification of processes and saving time and costs. However, it is not without risks. Experts and the Antimonopoly Office warn that without sufficient control, rules can be circumvented and lesser supervision abused. There is also a risk that public money will go to “proven” suppliers rather than the best ones.

The new setting thus requires consistency and prudence on the part of contracting authorities. It is not enough to follow the law – internal methodology, disclosure of information and a willingness to invite more candidates beyond the legal obligation are also crutial. Suppliers must also not forget that even in the case of small-scale public procurement it is necessary to keep in mind the fixed rules and their freedom when offering services is not unlimited.

Conclusion

The amendment to the PPA brings a welcome loosening of the administration, which may contribute to a more efficient functioning of the public administration. If the internal rules are set correctly and the principles of transparency are consistently respected, the amendment can be a significant step towards more modern and flexible public procurement.