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(1)A local authority or relevant public body shall not enter into a contract under which a company which is associated with the authority or body is to carry out work falling within a defined activity, unless, before entering into that contract, the authority or body has taken reasonable steps for the purpose of securing competition for the carrying out of that work.
(2)For the purpose of this section a company is associated with a local authority or relevant public body if, by virtue of any decision of the authority or body (including that of any committee or sub-committee thereof in the course of discharging any function conferred upon them by virtue of section 101 of the M1Local Government Act 1972, or, in relation to Scotland, section 56 of the M2Local Government (Scotland) Act 1973)—
(a)the authority or body, or
(b)any member or officer of the authority or body, or
(c)any nominee of the authority or body,
is a member either of the company or of another company which, in accordance with section 736 of the M3Companies Act 1985, is the company’s subsidiary or holding company.
[F1(2A)In relation to England and Wales, a company is also associated with a local authority, or relevant public body, to which Part V of the Local Government and Housing Act 1989 applies (companies in which local authorities have interests) if the company is under the control or subject to the influence of the authority or body within the meaning of that Part or the authority or body has a minority interest in the company.]
(3)In this section—
(a)“defined activity” has the meaning assigned by section 2 above;
(b)“ ” has the meaning assigned by subsection (2) or, as the case may be, subsection (3) of section 1 above; and
(c)“relevant public body” means any authority or committee falling within [F2paragraph (aa) or]paragraphs (e) to (j) of subsection (1) of section 1 above.
(4)This section (and, so far as is relevant for the purposes of the definitions in subsection (3) above, sections 1 and 2 above) shall be deemed to have come into force on 11th February 1988 and, accordingly, has effect in relation to contracts entered into on or after that day.
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