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Threshold 

oboloo Glossary

Threshold 

Threshold 

A procurement threshold is the level at which an entity must purchase goods or services through a formal competitive bidding process. The term is generally used in reference to governmental entities, such as state and local governments, which have laws and regulations governing how they must procure goods and services.

There are different types of procurement thresholds, depending on the value of the goods or services being purchased. For example, some jurisdictions have a monetary threshold, meaning that any purchase above a certain dollar amount must be made through a formal bidding process. Others have a time threshold, meaning that any purchase lasting longer than a certain period of time must be made through a formal bidding process. And still others have a project-based threshold, meaning that any purchase related to a certain type of project (e.g., construction) must be made through a formal bidding process.

The purpose of procurement thresholds is to ensure that entities are getting the best value for their money when they make purchases. By requiring a competitive bidding process for purchases above a certain threshold, entities are able to get multiple bids from vendors and choose the one that offers the best price/quality combo. This ensures that entities are not overpaying for goods or services, and it also promotes fair competition among vendors.

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