The Public Supply Contracts Regulations 1991

Thresholds

7.  –

(1) These Regulations shall not apply to the seeking of offers in relation to a proposed public supply contract where the estimated value of the contract (net of value added tax) at the relevant time is less than the relevant threshold.

(2) The relevant threshold for the purposes of paragraph (1) above–

(a) in relation to a public supply contract in relation to which offers are sought by a GATT contracting authority, but in the case of such a contract in relation to which offers are sought by the Secretary of State for Defence only if it is for the purchase or hire of the goods specified in Schedule 2, is the amount for the time being to be treated as the ECU equivalent of 130,000 special drawing rights for the purposes of Council Directive 77/62/EEC as published from time to time in the Official Journal(1);

(b) in relation to all other public supply contracts, is 200,000 ECU.

(3) Subject to paragraphs (4), (5), (6) and (7) below, the estimated value for the purposes of paragraph (1) above of a public supply contract shall be the value of the consideration which the contracting authority expects to give under the contract.

(4) The estimated value for the purposes of paragraph (1) above of a public supply contract for the hire of goods for an indefinite period, or for a period which is uncertain at the time the contract is entered into, shall be the value of the consideration which the contracting authority expects to give in respect of each month of the hire multiplied by 48.

(5) Where a contracting authority proposes to enter into two or more public supply contracts at the same time in order to purchase or hire goods of a particular type, the estimated value for the purposes of paragraph (1) above of each of those contracts shall be the aggregate of the value of the consideration which the contracting authority expects to give under each of those contracts.

(6) Where a contracting authority has a recurrent need to purchase or hire goods of the type to be purchased or hired under the contract and for that purpose enters into separate public supply contracts at different times or into a public supply contract which under its terms is renewable or into a public supply contract for the purchase or hire of goods over an indefinite period, the estimated value for the purposes of paragraph (1) above of the contract shall be the amount calculated by applying one of the following two valuation methods–

(a) by taking the aggregate of the value of the consideration given by the contracting authority under such contracts for the purchase or hire of goods of the type to be purchased or hired under the contract during the last financial year of the contracting authority ending before, or the period of 12 months ending immediately before, the relevant time, and by adjusting that amount to take account of any expected changes in quantity and cost of the goods of that type to be purchased or hired in the period of 12 months commencing with the relevant time, or

(b) by estimating the aggregate of the value of the consideration which the contracting authority expects to give under such contracts for the purchase or hire of goods of the type to be purchased or hired under the contract during the period of12 months from the first date of delivery of the goods to be purchased or hired under the contract or, where the contract is for a definite term of more than 12 months, during the term of the contract,

except that when the goods to be purchased or hired under the contract are required for the sole purposes of a discrete operational unit within the organisation of the contracting authority and–

(i) the decision whether to purchase or hire goods of that type has been devolved to such a unit, and

(ii) that decision is taken independently of any other part of the contracting authority,

the valuation methods described in sub-paragraphs (a) and (b) above shall be adapted by aggregating only the value of the consideration which the contracting authority has given or expects to give, as the case may be, for goods of the type to be purchased or hired under the contract which were or are required for the sole purposes of the unit.

(7) The estimated value for the purposes of paragraph (1) above of a contract which falls to be treated as a public supply contract by virtue of sub-paragraph (ii) of the definition of a “public supply contract” in regulation 2(1) (public supply contracts under which goods and services are provided and the services have a greater value than, but are separate from, the goods) shall be that proportion of the value of the consideration which the contracting authority expects to give under the contract which is attributable to the purchase or hire of the goods and to any siting or installation of the goods.

(8) Where a public supply contract includes one or more options the estimated value of the contract shall be determined by calculating the highest possible amount which could be payable under the contract.

(9) The relevant time for the purposes of paragraphs (1) and (6)(a) above means, in relation to a public supply contract, the date on which a contract notice would be sent to the Official Journal if the requirement to send such a notice applied to that contract in accordance with these Regulations.

(10) A contracting authority shall not enter into separate public supply contracts nor select nor exercise a choice under a valuation method in accordance with paragraph (6) above with the intention of avoiding the application of these Regulations to those contracts.

(1)

The amount is determined for each successive period of 2 years commencing on 1st January 1988 by calculating the average of the daily exchange rate between the ECU and the special drawing right over a period of 24 months preceding the commencement of the revised valuation and adjusting that figure to exclude value added tax at a notional rate of 13 per cent. The amount to be treated as the ECU equivalent of 130,000 special drawing rights for the 2 years from1st January 1990 is published in OJ No. C18, 25.1.90, p.3 and is 134,000 ECU.