The Utilities Contracts Regulations 2006

Thresholds

11.—(1) These Regulations do not apply to the seeking of offers in relation to a proposed contract, dynamic purchasing system or framework agreement where the estimated value of the contract, dynamic purchasing system or framework agreement (net of value added tax) at the relevant time is less than the relevant threshold.

(2) Except where paragraph (17) applies, for the purposes of paragraph (1), the relevant threshold is—

(a) 422,000 euro for a supply contract or a services contract; and

(b) 5,278,000 euro for a works contract.

(3) The value in pounds sterling of any amount expressed in these Regulations in euro is calculated by reference to the rate for the time being applying for the purposes of the Utilities Directive as published from time to time in the Official Journal.

(4) For the purposes of paragraph (1) the estimated value of a contract is the value of the total consideration payable, net of value added tax (calculated in accordance with this regulation), which the utility expects to be payable under the contract.

(5) In determining the value of the total consideration which the utility expects to be payable under a contract it shall, where appropriate, take account of—

(a) any form of option;

(b) any renewal of the contract;

(c) any prize or payment awarded by the utility to the economic operator;

(d) the premium payable and other forms of remuneration for insurance services;

(e) fees, commissions, interest or other forms of remuneration payable for banking and other financial services; or

(f) fees, commissions or other forms of remuneration payable for design services.

(6) For the purposes of paragraph (1) the estimated value of a supply contract for the hire of goods is—

(a) the value of the consideration which the utility expects to be payable under the contract if the term of the contract is fixed for 12 months or less;

(b) the value of the consideration which the utility expects to be payable under the contract if the term of the contract is fixed for more than 12 months; or

(c) the value of the monthly consideration payable under the contract multiplied by 48 if the term of the contract is indefinite or uncertain at the time the contract is entered into.

(7) For the purposes of paragraph (1) the estimated value of a services contract which does not indicate a total price, is—

(a) the aggregate of the value of the consideration which the utility expects to be payable under the contract if the term of the contract is fixed for 48 months or less; or

(b) the value of the consideration which the utility expects to be payable in respect of each month of the period multiplied by 48 if the term of the contract is fixed for more than 48 months, or over an indefinite period.

(8) Subject to paragraphs (9) and (12), where a utility has a single requirement for goods or services or for the carrying out of a work or works and a number of contracts have been entered into or are to be entered into to fulfil that requirement, the estimated value for the purposes of paragraph (1) of each of those contracts is the aggregate of the value of the consideration which the utility expects to be payable under each of those contracts.

(9) Paragraph (8) does not apply to any contract (unless the utility chooses to apply that paragraph to a contract) if the contract has an estimated value of less than—

(a) 80,000 euro for a services contract or a supply contract; or

(b) 1,000,000 euro for a works contract;

and the aggregate value of that contract and any other such contract is less than 20% of the aggregate of the value of the consideration which the utility has given or expects to be payable under all the contracts entered into or to be entered into to fulfil the single requirement for goods, services or for the carrying out of a work or works.

(10) Subject to paragraph (12), where a utility has a requirement over a period for goods or services and for that purpose enters into—

(a) a series of contracts; or

(b) a contract which under its terms is renewable;

the estimated value for the purposes of paragraph (1) of the contract shall be the amount calculated in accordance with paragraph (11).

(11) The utility shall calculate the amount referred to in paragraph (10) either—

(a) by taking the aggregate of the value of the consideration payable under contracts which—

(i) have similar characteristics; and

(ii) are for the same type of goods or services;

during the last financial year of the utility 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 to be purchased or hired or services to be provided 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 utility expects to be payable under contracts which have similar characteristics, and which are for the same type of goods or services during—

(i) in the case of supply contracts, the period of 12 months from the first date of the delivery of the goods to be purchased or hired, or in the case of services contracts, from the first date on which the services will be performed; or

(ii) the financial year if that is longer than 12 months.

(12) Notwithstanding paragraphs (8) and (10), in relation to a supply contract or a services contract, when the goods or services are required for the sole purposes of a discrete operational unit within the organisation of a utility and—

(a) the decision whether to procure those goods or services has been devolved to such a unit; and

(b) that decision is taken independently of any other part of the utility;

the valuation methods described in paragraphs (8) and (11) shall be adapted by aggregating only the value of the consideration which was payable or the utility expects to be payable, as the case may be, under a supply contract or a services contract which was or is required for the sole purpose of that unit.

(13) Where a utility intends to provide any goods or services to the economic operator awarded a works contract for the purpose of carrying out that contract, the value of the consideration of the works contract for the purposes of paragraphs (2) and (8) shall be taken to include the estimated value at the relevant time of those goods and services.

(14) Where the estimated value of a works contract is less than the threshold and where goods or services which are not necessary for its execution are to be purchased, hired or provided under it, the estimated value of the contract for the purposes of paragraph (1) shall be the value of the consideration which the utility expects to give for the goods and services and the relevant contract shall be treated as a supply or services contract, as appropriate.

(15) Where under a contract both goods are to be purchased or hired and services are to be provided, the estimated value of the contract is the aggregate of the values of the consideration attributable to the purchase or hire of the goods including any siting and installation of the goods and of the consideration attributable to the provision of the services, regardless of whether the estimated value of either the goods or services is less than the threshold specified in paragraph (2).

(16) The estimated value of a dynamic purchasing system or of a framework agreement is the aggregate of the values estimated in accordance with this regulation of all the contracts which could be entered into under the framework agreement or dynamic purchasing system.

(17) The relevant threshold for the purposes of paragraph (1) for a dynamic purchasing system or a framework agreement is the threshold for—

(a) a works contract, where that framework agreement or dynamic purchasing system relates to the carrying out of work or works;

(b) a services contract where that framework agreement or dynamic purchasing system relates to the provision of services; or

(c) a supply contract where that framework agreement or dynamic purchasing system relates to the purchase or hire of goods.

(18) A utility shall not enter into separate contracts nor exercise a choice under a valuation method with the intention of avoiding the application of these Regulations to those contracts.

(19) The relevant time for the purposes of paragraphs (1), (11) and (13) means—

(a) if the utility selects economic operators to tender for or to negotiate the contract in accordance with a qualification system established in accordance with regulation 25, the date on which the selection commences;

(b) if the utility satisfies the requirement that there be a call for competition by indicating the intention to award the contract in a periodic indicative notice in accordance with regulation 16(2)(a)(i), the date on which the notice is sent to the Official Journal; or

(c) in any other case, the date on which a contract notice would be sent to the Official Journal if the requirement that there be a call for competition applied and the utility decided to satisfy that requirement by sending such a notice.