Source: https://tendernation.io/glossary/reserved-contracts Glossary # Reserved contracts (PPN 005) Competitions a buyer limits to certain kinds of supplier, such as local SMEs and VCSEs below threshold, or supported employment providers. Updated 14 Oct 2026 A reserved contract is a competition that the buyer limits to a particular group of suppliers, rather than opening it to everyone. In UK procurement there are three main routes, and one of them is aimed squarely at small local businesses. ## What it means **Below-threshold reservations (PPN 005).** [PPN 005: Reserving below threshold procurements](https://www.gov.uk/government/publications/ppn-005-reserving-below-threshold-procurements/ppn-005-reserving-below-threshold-html) applies to central government departments, their executive agencies and non-departmental public bodies. It lets them reserve [below-threshold contracts](/glossary/below-threshold-contract) by supplier location, for example to UK suppliers or to a single county. They can additionally reserve the competition for SMEs and VCSEs, but only on top of a location reservation, never on its own. Location means where the supplier is based and has substantive business operations, not where its owners are. **Supported employment providers.** Under [section 32 of the Procurement Act 2023](https://www.legislation.gov.uk/ukpga/2023/54/section/32), a competitive flexible procedure can be limited to supported employment providers, organisations that exist wholly or partly to provide employment or employment support to disabled or disadvantaged people, who must make up at least 30% of the workforce. **Public service mutuals.** Under [section 33](https://www.legislation.gov.uk/ukpga/2023/54/section/33), certain "reservable" [light touch](/glossary/light-touch-contract) services contracts with a maximum term of five years or less can be reserved for qualifying public service mutuals. ## Why it matters for SMEs PPN 005 reservations can remove large competitors from a competition altogether. A government agency that reserves a below-threshold contract for SMEs and VCSEs based in one county is likely to see a small field of local firms rather than national players. Other buyers, such as councils and NHS trusts, are not in scope of PPN 005. ## Practical tip Make sure buyers can see where you are based and that you meet the [SME or VCSE](/glossary/sme-vcse) definitions. Keep your registered and trading addresses up to date on the Central Digital Platform, and if you see a local below-threshold contract that could have been reserved, say so politely during market engagement next time. Find tenders that fit your business Search UK, EU and World Bank tenders in one place, get AI summaries and a fit score for each one, and track bids in a pipeline. Professional comes with a 14-day free trial, no card needed. [Browse live tenders](/opportunities)[Start free trial ](/register) 14-day free trial, no card required Browse by sector - [Construction work](https://tendernation.io/sectors/construction-work)374 - [Architecture, engineering & surveying](https://tendernation.io/sectors/architecture-engineering-surveying)134 - [IT services](https://tendernation.io/sectors/it-services)54 - [Business services](https://tendernation.io/sectors/business-services)177 - [Health and social work](https://tendernation.io/sectors/health-social-work)300 - [Sewage, refuse, cleaning & environmental](https://tendernation.io/sectors/sewage-refuse-cleaning-environmental)80 [All sectors ](/sectors) ## Nearby terms [Procurement Act 2023The UK law that has governed most public sector buying in England, Wales and Northern Ireland since 24 February 2025.](https://tendernation.io/glossary/procurement-act-2023)[Procurement thresholdsThe contract values, including VAT, at or above which a public contract must follow the full competitive rules of the Procurement Act 2023.](https://tendernation.io/glossary/procurement-thresholds)[Re-tenderA new procurement run for work that is already being delivered under a contract that is ending or being replaced.](https://tendernation.io/glossary/re-tender)[Selection questionnaire (SQ)A standard set of questions buyers use to check a supplier's eligibility, finances and capability before assessing its tender.](https://tendernation.io/glossary/selection-questionnaire)[SME and VCSESMEs are small and medium-sized enterprises; VCSEs are voluntary, community and social enterprises. Both get specific attention in UK procurement policy.](https://tendernation.io/glossary/sme-vcse)[Social value (PPN 002)The wider economic, social and environmental benefits a supplier commits to deliver through a contract, scored as part of the tender.](https://tendernation.io/glossary/social-value) [Read our procurement guides ](/guides)