The Utilities Contracts Regulations 2006

Criteria for the award of a contract

30.—(1) Subject to regulation 31 and paragraphs (6) and (9) of this regulation, a utility shall award a contract on the basis of the offer which—

(a) is the most economically advantageous from the point of view of the utility; or

(b) offers the lowest price.

(2) A utility shall use criteria linked to the subject matter of the contract to determine that an offer is the most economically advantageous including delivery date or period for completion, running costs, cost-effectiveness, quality, aesthetic and functional characteristics, environmental characteristics, technical merit, after sales service and technical assistance, commitments with regard to parts, security of supply and price or otherwise.

(3) Where a utility intends to award a contract on the basis of the offer which is the most economically advantageous, it shall state the weighting which it gives to each of the criteria chosen in the contract notice or in the contract documents.

(4) When stating the weightings referred to in paragraph (3), a utility may give the weighting a range and specify a minimum and maximum weighting where it considers it appropriate in view of the subject matter of the contract.

(5) Where, in the opinion of the utility, it is not possible to provide weightings for the criteria referred to in paragraph (3) on objective grounds, the utility shall indicate the criteria in descending order of importance in the contract notice or contract documents.

(6) If an offer for a contract is abnormally low, the utility may reject that offer but only if it has—

(a) requested in writing an explanation of the offer or of those parts which it considers contribute to the offer being abnormally low;

(b) taken account of any evidence provided in response to a request in writing; and

(c) subsequently verified the offer or parts of the offer being abnormally low with the economic operator.

(7) Where a utility requests an explanation in accordance with paragraph (6), the information requested may, in particular, include—

(a) the economics of the method of construction, the manufacturing process or the services provided;

(b) the technical solutions suggested by the economic operator or the exceptionally favourable conditions available to the economic operator for the execution of the work or works, for the supply of goods or for the provision of the services;

(c) the originality of the work, works, goods or services proposed by the economic operator;

(d) compliance with the provisions relating to employment protection and working conditions in force at the place where the contract is to be performed; or

(e) the possibility of the economic operator obtaining State aid.

(8) Where a utility establishes that a tender is abnormally low because the economic operator has obtained State aid, the offer may be rejected on that ground alone only after—

(a) consultation with the economic operator; and

(b) the economic operator is unable to prove within a reasonable time limit fixed by the utility, that the aid has been granted in a way which is compatible with the EC Treaty.

(9) Where a utility rejects an abnormally low offer in accordance with paragraph (8), it shall send a report justifying the rejection to the Minister for onward transmission to the Commission.

(10) In this regulation “offer” includes a bid by one part of a utility to provide services, to carry out work or works or to make goods available to another part of the utility when the former part is invited by the latter part to compete with the offers sought from other persons.