By a Grand-Ducal regulation of 29 May 2024, the threshold provided for in Article 151 of the regulation of 8 April 2018 implementing the law of 8 April 2018 on public procurement in Luxembourg (RMP) was increased substantially (+33%), from €60,000 excluding VAT to €79,000 excluding VAT.

This threshold is of key importance in public procurement law, as it defines what is commonly referred to in Luxembourg as the “small tenders” ceiling, below which contracting authorities have the freedom to choose their suppliers.

Following this recent amendment, article 151 of the RMP now reads:

Art 151
Public works, supply and service contracts may be awarded either by restricted procedure without publication of a notice, or by negotiated procedure, where the total value of the contract does not exceed 79,000 euros.

Legally, this regulatory provision is part of the implementation of Article 20 of the Law of 8 April 2018 on public procurement in Luxembourg (LMP), which frames the various possibilities for using the negotiated or restricted procedure without publication, §1 (a) of which provides:

Either the restricted procedure without publication of a notice or the negotiated procedure may be used in the following cases:
a) when the total amount of the contract to be concluded does not exceed a sum to be determined by Grand-Ducal regulation; this sum may vary according to the different trades involved, but it may not exceed 8,000 euros excluding VAT, at one hundredth of the consumer price index at 1 January 1948, adjusted in accordance with Article 160.

If the expenditure is to be incurred in the same year and for the same purpose, and if it is foreseeable, account must be taken of all expenditure on works, supplies and services of an identical or similar nature ordered from the same economic operator.

Using the negotiated procedure without publication means – to quote article 20 of the LMP – that “the contracting authorities consult the economic operators of their choice and negotiate the terms of the contract with one or more of them“.

The increase in this threshold makes it possible to re-establish consistency with the ceiling – linked to inflation – provided by the amount of €8,000 based on the index at 1 January 1948 (± €80,000 for 2024), but also to improve purchasing flexibility for the public authorities, as the authors of this amendment have argued:

It will therefore be possible to place orders, without prior publication, either by the negotiated procedure or by the restricted procedure without publication of a notice, for any contract for which the estimated cost does not exceed the sum of 79,000 euros excluding VAT. This makes it easier and faster to place public orders for smaller contracts.

It should be remembered that this derogation provided for in Article 20 §1 a) is not affected by the obligation to give formal reasons, as stipulated in Article 21 of the LMP:

Except in the case referred to in Article 20(1)(a), reasons shall be given for recourse to the restricted procedure without publication of a notice, to the competitive procedure with negotiation or to the negotiated procedure without prior publication: (…)

Finally, it should be noted that this threshold also applies, in accordance with article 141 of the RMP, to setting the limits under which municipal administrations may enter into agreements (including public contracts) in simplified forms:

Art. 141.
Contracts are concluded in writing by the college of burgomasters and aldermen. Within the limits of the amounts laid down in Article 151, the college may deal on the basis of memoranda, order forms or simple invoices.

For companies that are consulted by public purchasers in the context of restricted or negotiated procedures without publication, this increase in the threshold will have to be taken into account in order to submit a tender within the (new) limits set.

Please do not hesitate to contact us if you have any questions about changes to the regulations or about public procurement law in Luxembourg.