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The Utilities Contracts (Scotland) Regulations 2016

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  • Pt. 5A inserted by S.S.I. 2019/112 reg. 5(61) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 3(2)-(2C) substituted for reg. 3(2) by S.S.I. 2019/112 reg. 5(3)(b) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 15A inserted by S.S.I. 2019/112 reg. 5(7) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 20(1)(d)(i)(aa) words substituted by S.S.I. 2019/112 reg. 5(11)(a)(i) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 20(1)(d)(i)(bb) words substituted by S.S.I. 2019/112 reg. 5(11)(a)(ii) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 38A inserted by S.S.I. 2019/112 reg. 5(26) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 41(1) reg. 41 renumbered as reg. 41(1) by S.S.I. 2019/112 reg. 5(27)(b) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 41(1) words omitted by S.S.I. 2019/112 reg. 5(27)(b)(i) (This amendment not applied to legislation.gov.uk. Reg. 5(27)(b)(i) substituted by S.S.I. 2019/114, reg. 2(5)(a)(ii)(aa) and then S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 41(1) words substituted by S.S.I. 2019/112 reg. 5(27)(b)(ii) (This amendment not applied to legislation.gov.uk. Reg. 5(27)(b)(ii) omitted by virtue of S.S.I. 2019/114, reg. 2(5)(a)(ii)(bb))
  • reg. 41(1) words substituted by S.S.I. 2019/112 reg. 5(27)(b)(iii) (This amendment not applied to legislation.gov.uk. Reg. 5(27)(b)(iii) substituted by S.S.I. 2019/114, reg. 2(5)(a)(ii)(cc) and then S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 41(1) words substituted by S.S.I. 2019/112, reg. 5(27)(b)(i) (as substituted) by S.S.I. 2019/114 reg. 2(5)(a)(ii) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/114 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(b))
  • reg. 41(1) words substituted by S.S.I. 2019/112, reg. 5(27)(b)(iii) (as substituted) by S.S.I. 2019/114 reg. 2(5)(a)(ii) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/114 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(b))
  • reg. 41(2) inserted by S.S.I. 2019/112 reg. 5(27)(c) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 50(25)(25A) substituted for reg. 50(25) by S.S.I. 2019/112 reg. 5(33)(c) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 66(2A) inserted by S.S.I. 2019/112 reg. 5(38)(b) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 69(5)(6) inserted by S.S.I. 2019/112 reg. 5(41)(f) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 74(6A)-(6C) inserted by S.S.I. 2019/112 reg. 5(44)(c) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 100(3)(3A) substituted for reg. 100(3) by S.S.I. 2019/112 reg. 5(58)(c) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/112 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(a))
  • reg. 100(4A) inserted by S.S.I. 2019/112, reg. 5(58)(da) (as substituted) by S.S.I. 2019/114 reg. 2(5)(c)(ii) (This amendment not applied to legislation.gov.uk. S.S.I. 2019/114 revoked immediately before IP completion day by S.S.I. 2020/468, regs. 1(3), 2(2)(b))

CHAPTER 3SMATERIAL SCOPE

SECTION 1SThresholds

ThresholdsS

15.—(1) These Regulations apply to a procurement where the estimated value of the contract to be awarded ([F1inclusive of VAT, where appropriate]) is equal to or greater than—

(a)in the case of a supply or service contract or design contest, [F2£429,809];

(b)in the case of a works contract, [F3£5,372,609;]

(c)in the case of a contract for a service listed in Schedule 2 (social and other specified services), [F4£884,720].

(2) Where proposed works, acquisition of supplies or provision of services may be procured in the form of separate lots these Regulations do not apply to the award of a contract for a lot where—

(a)the estimated value of that lot is less than—

(i)[F5£70,778], in the case of supplies or services; or

(ii)[F6£884,720], in the case of works; and

(b)the estimated total aggregate value of all such lots to be awarded without application of these Regulations does not exceed 20% of the estimated aggregate value of all the lots calculated in accordance with [F7regulation 16(1)(a)] (methods for calculating the estimated value).

[F8(2A) For the avoidance of doubt, in determining for the purpose of paragraph (2)(b) the estimated aggregate value of all the lots, no account is to be taken of any lot if its estimated value is taken to be a certain amount by virtue of regulation 16(1)(b) (rather than being an amount calculated in accordance with regulation 16(1)(a)).]

F9(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In this regulation reference to a “contract” includes reference to a framework agreement, dynamic purchasing system and design contest.

Textual Amendments

Commencement Information

I1Reg. 15 in force at 18.4.2016, see reg. 1(2)

[F10Review and amendment of certain thresholdsS

15A.—(1) Every two years the Scottish Ministers must review the thresholds specified in regulation 15(1)(a) and (b) (“the reviewable thresholds”) to verify whether they correspond with the thresholds established for those purposes in the GPA.

(2) The Scottish Ministers must do so by calculating the sterling value of each of the reviewable thresholds on the basis of the average daily value of sterling in terms of the special drawing rights mentioned in the GPA over a period of 24 months ending with 31 August.

(3) The Scottish Ministers must make that calculation using the applicable conversion rates in the monthly International Financial Statistics published from time to time by the International Monetary Fund.

(4) If the sterling value of a reviewable threshold so calculated differs from the sum for the time being set by regulation 15(1) in respect of that threshold, the Scottish Ministers must make regulations amending regulation 15(1) so as to substitute for that sum the sum equal to that value.

(5) Such regulations—

(a)must be made and laid before the Scottish Parliament before 1 November following the end of the 24 month period covered by the review, and

(b)must provide for the substitution to come into force on the following 1 January.

(6) The first review under this regulation must relate to the 24 month period ending with 31 August 2021.]

Textual Amendments

[F11Estimating value]S

16.—(1) A utility must

[F12(a)]calculate [F13in accordance with the following paragraphs] the estimated value of a contract by reference to the total amount payable under it (regardless of the form of such payment), [F14inclusive of VAT, where appropriate] [F15; or

(b)if it is not possible to calculate the estimated value of a contract, take its estimated value to be equal to the relevant threshold mentioned in regulation 15]

(2) The total amount payable includes the amount payable as a result of the exercise of any form of option and any renewal of the contract as explicitly set out in the procurement documents.

(3) Where a utility provides for prizes or payments to candidates or tenderers it must take them into account when calculating the estimated value.

(4) Where a utility is comprised of separate operational units the utility—

(a)may calculate the estimated value by reference to each such unit or certain category thereof where that unit or certain category thereof is independently responsible for its procurement; and

(b)must calculate the estimated value by reference to the total for all the operational units which are not so responsible.

(5) A utility must not choose a method to be used to calculate the estimated value of a contract with the intention of excluding the contract from the application of these Regulations.

(6) A utility must not sub-divide a contract with the effect of excluding the contract from the application of these Regulations unless such sub-division is justified by objective reasons.

(7) The estimated value must be the value estimated at the moment at which the procurement is commenced.

(8) In the case of a framework agreement or dynamic purchasing system the estimated value shall be the total estimated value of all of the contracts envisaged pursuant to and for the total term of the agreement or system.

(9) In the case of an innovation partnership the estimated value shall be the total estimated value of the research and development activities to take place during all stages of the partnership together with the estimated value of works, supplies or services to be developed and delivered by the partner.

(10) In the case of a works contract the estimated value shall include the total estimated value of any supplies and services that are necessary for executing the works and are to be provided by the utility to the contractor.

(11) In the case of a works or service contract to be awarded in the form of separate lots, the estimated value shall be the total estimated value of all such lots.

(12) In the case of a contract for supplies which may be awarded in the form of separate lots the estimated value shall be the total estimated value of all such lots and these Regulations apply to each lot accordingly where the aggregate value of the lots is equal to or greater than the relevant threshold referred to in regulation 15 (thresholds).

(13) In the case of supply or service contracts which are regular in nature or which are intended to be renewed in a given period, the estimated value shall be calculated by reference to—

(a)the total actual value of contracts of the same type awarded during the period of 12 months or the financial year preceding the proposed award of a further contract but with adjustment of such value, where possible, to take account of the changes in quantity or value which the utility considers likely to occur during the period of 12 months following the award of the contract; or

(b)the total estimated value of the successive contracts awarded during the 12 months following the first delivery, or during the financial year.

(14) In the case of a supply contract relating to the leasing, rental, hire or hire purchase of products the estimated value shall be—

(a)in the case of a fixed term contract for a period of less than or equal to 12 months, the total estimated value of the contract;

(b)in the case of a fixed term contract for a period of more than 12 months, the total value including the estimated residual value; and

(c)in the case of a contract without a fixed term or the term of which cannot be defined, the monthly value multiplied by 48.

(15) In the case of a service contract for a service of a kind mentioned herein, the estimated value shall be calculated by reference to—

(a)for insurance services, the premium payable and any other form of remuneration;

(b)for banking and other financial services, the fees, commissions payable, interest and any other form of remuneration; and

(c)for design contracts, the fees, commissions payable and any other form of remuneration.

(16) In the case of a service contract which does not indicate a total price, the estimated value must be calculated by reference to—

(a)in the case of a contract for a fixed term of less than or equal to 48 months, the total value of the contract for its full term; and

(b)in the case of a contract for a term of more than 48 months or a contract without a fixed term, the monthly value multiplied by 48.

Textual Amendments

Commencement Information

I2Reg. 16 in force at 18.4.2016, see reg. 1(2)

SECTION 2SExcluded contracts and design contests; special provisions for procurement involving defence and security aspects

SUB-SECTION 1SExclusions applicable to all utilities and special exclusions for the water and energy sectors
Exclusion: Contracts awarded for the purpose of resale or lease to third partiesS

17.—(1) Subject to paragraph (3), these Regulations do not apply to procurement for the award of a contract for the purpose of resale or lease to third parties, provided that the utility enjoys no special or exclusive right to sell or lease the subject of such contracts and other entities are free to sell or lease the subject of such contracts under the same conditions as the utility.

F16(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Paragraph (1) does not apply to procurement carried out by a central purchasing body in order to perform a centralised purchasing activity.

Textual Amendments

Commencement Information

I3Reg. 17 in force at 18.4.2016, see reg. 1(2)

Exclusion: Contracts and design contests awarded or organised for purposes other than the pursuit of a covered activity or for the pursuit of such an activity [F17outside the United Kingdom] S

18.—(1) These Regulations do not apply to procurement for the award of a contract or the organisation of a design contest by a utility—

(a)for purposes other than the pursuit of its activities as described in regulations 8 to 14; or

(b)for the pursuit of such activities [F18outside the United Kingdom], in conditions not involving the physical use of a network or geographical area within the [F19United Kingdom].

F20(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Commencement Information

I4Reg. 18 in force at 18.4.2016, see reg. 1(2)

Exclusion: Contracts awarded and design contests organised pursuant to international rulesS

19.—(1) These Regulations do not apply to procurement for the award of a contract or the organisation of a design contest which the utility is obliged to award or organise in accordance with a procurement which is established by—

(a)an international agreement or any other legal instrument creating international law obligations, concluded in conformity with the [F21Retained] Treaties, between the United Kingdom and one or more [F22other] country or any part thereof and covering works, supplies or services intended for the joint implementation or exploitation of a project by its signatories; F23...

F23(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F24(2) These Regulations do not apply to procurement for the award of a relevant international contract or the organisation of a relevant international design contest in a case where the applicable procurement rules restrict the participation of economic operators in the procedure.

(2A) In the case of procurement for the award of a relevant international public contract or relevant international design contest where the applicable procurement rules do not restrict the participation of economic operators in the procedure, the only regulation that applies to the procurement is regulation 41B (equal treatment of economic operators).]

(3) This regulation does not apply to procurement for the award of a contract or the organisation of a design contest involving defence or security aspects which are awarded or organised pursuant to international rules.

[F25(4) In this regulation, “relevant international contract” and “relevant international design contest” mean a contract or design contest that—

(a)the utility undertakes or organises in accordance with procurement rules provided by an international organisation or international financing institution, and

(b)is fully financed, or co-financed for the most part, by that organisation or institution.]

Textual Amendments

F23Reg. 19(1)(b) and word omitted (coming into force in accordance with s. 7(1) of the amending Act) by virtue of Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 (c. 6), Sch. para. 17(2) (with Sch. paras. 23-26)

F24Reg. 19(2)(2A) substituted for reg. 19(2) (coming into force in accordance with s. 7(1) of the amending Act) by Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 (c. 6), Sch. para. 17(3) (with Sch. paras. 23-26)

F25Reg. 19(4) inserted (coming into force in accordance with s. 7(1) of the amending Act) by Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024 (c. 6), Sch. para. 17(4) (with Sch. paras. 23-26)

Commencement Information

I5Reg. 19 in force at 18.4.2016, see reg. 1(2)

Exclusion: Specific exclusions for service contractsS

20.—(1) These Regulations do not apply to procurement for the award of a service contract, framework agreement or dynamic purchasing system—

(a)for the acquisition or rental, by whatever financial means, of land, existing buildings or other immovable property or of any estate, right, servitude or other interest in or over such land, buildings or property;

(b)to an audio-visual or radio media service provider, for broadcasting time or programme provision;

(c)for arbitration or conciliation services;

(d)for any of the following legal services—

(i)legal representation of a client by a lawyer F26... in—

(aa)arbitration or conciliation proceedings held in [F27the United Kingdom, another] country or before an international arbitration or conciliation instance; or

(bb)judicial proceedings before the courts, tribunals or public authorities of [F28the United Kingdom or another] country or before international courts, tribunals or institutions;

(ii)legal advice given by a lawyer F29...—

(aa)in preparation of any proceedings referred to in paragraph (i); or

(bb)where there is a tangible indication and high probability that the matter to which the advice relates will become the subject of such proceedings;

(iii)document certification or authentication services which must be provided by a notary public;

(iv)legal services provided by trustees or appointed guardians or other legal services the providers of which are designated by a court or tribunal F30... or are designated by law to carry out specific tasks under the supervision of such tribunals or courts;

(v)other legal services which F31... are connected, even occasionally, with the exercise of official authority;

(e)for financial services in connection with the issue, sale, purchase or transfer of securities or other financial instruments within the meaning of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (1) as amended from time to time;

(f)for operations conducted with the European Financial Stability Facility or the European Stability Mechanism;

(g)for loans, whether or not in connection with the issue, sale, purchase or transfer of securities or other financial instruments;

(h)which is an employment contract;

(i)for civil defence, civil protection or danger prevention services that are provided by non‑profit organisations or associations and which are specified under CPV Codes 75250000-3, 75251000-0, 75251100-1, 75251110-4, 75251120-7, 75252000-7, 75222000-8, 98113100-9 and 85143000-3 except patient transport ambulance services; or

(j)for public passenger transport services by rail or metro.

(2) In this regulation—

(a)“Audio-visual Media Services Directive” means Directive 2010/13/EU of the European Parliament and of the Council on the coordination of certain provisions laid down by law, regulation or administrative action in member States concerning the provision of audio-visual media services(2) as amended from time to time;

[F32(b)“lawyer” means a person practising as an advocate, barrister or solicitor in any part of the United Kingdom or in Gibraltar;]

(c)“media service provider” has the meaning given by Article 1(1)(d) of the Audio-visual Media Services Directive; and

(d)“programme” has the meaning given by Article 1(1)(b) of the Audio-visual Media Services Directive but also includes radio programmes and radio programme materials, and “programme material” is to be construed accordingly.

Textual Amendments

Commencement Information

I6Reg. 20 in force at 18.4.2016, see reg. 1(2)

Exclusion: Service contracts awarded on the basis of an exclusive rightS

21.  These Regulations do not apply to procurement for a service contract to be awarded to a contracting authority or to an association of contracting authorities on the basis of an exclusive right which such authority or association of authorities enjoy pursuant to a law, regulation or published administrative provision which is compatible with [F33anything which is retained EU law by virtue of section 4 of the European Union (Withdrawal) Act 2018 because of the effect which the TFEU had immediately before IP completion day in giving rise to any of the powers, rights etc. mentioned in that section].

Textual Amendments

Commencement Information

I7Reg. 21 in force at 18.4.2016, see reg. 1(2)

Exclusion: Contracts awarded by certain utilities for the purchase of water and for the supply of energy or of fuels for the production of energyS

22.  These Regulations do not apply to procurement for the award of a contract—

(a)for the purchase of water by a utility engaged in one or both of the activities relating to drinking water referred to in regulation 10(1) (water);

(b)by a utility which is active in the energy sector by engaging in an activity referred to in regulation 8(1) (gas and heat), 9(1) (electricity) or 14 (extraction of oil and gas and exploration for, or extraction of, coal or other solid fuel) for the supply of—

(i)energy; or

(ii)fuels for the production of energy.

Commencement Information

I8Reg. 22 in force at 18.4.2016, see reg. 1(2)

SUB-SECTION 2SProcurement involving defence and security aspects
Defence and securityS

23.—(1) These Regulations apply to procurement for the award of contracts and to design contests organised in the fields of defence and security, with the exception of procurement or design contests—

(a)to which the Defence and Security Regulations apply; or

(b)to which those Regulations do not apply pursuant to regulations 7 or 9 of those Regulations.

(2) These Regulations do not apply to procurement for the award of contracts or design contests, not otherwise exempt by virtue of paragraph (1), to the extent that—

(a)the protection of the essential security interests of the United Kingdom F34... cannot be guaranteed by less intrusive measures; or

(b)the application of these Regulations would oblige the United Kingdom to supply information the disclosure of which it considers contrary to the essential interests of its security.

(3) These Regulations do not apply where—

(a)the procurement and performance of the contract or design contest are classified as secret or must be accompanied by special security measures in accordance with the laws, regulations or administrative provisions in force in any part of the United Kingdom; and

(b)the United Kingdom has determined that the protection of the essential interests concerned cannot be guaranteed by less intrusive measures.

(4) In this regulation reference to “less intrusive measures” includes, but is not limited to, imposing requirements aimed at protecting the confidential nature of information which the utility makes available in a contract award procedure as provided for in these Regulations.

Textual Amendments

Commencement Information

I9Reg. 23 in force at 18.4.2016, see reg. 1(2)

Mixed procurement covering the same activity and involving defence and security aspectsS

24.—(1) This regulation applies where a procurement has as its subject different types of procurement all covering the same activity, any part of which is covered by [F35regulation 3(2)] or the Defence and Security Regulations.

(2) Where different parts of a given contract are objectively separable, a utility may decide to undertake procurement for the award of—

(a)separate contracts for the separate parts; or

(b)a single contract.

(3) Any decision to undertake a procurement for the award of a single contract must not be made for the purpose of excluding the procurement from the application of these Regulations or the Defence and Security Regulations.

(4) Where a utility decides to undertake procurement for the award of separate contracts for separate parts the applicable law for the procurement of each separate part is to be determined by the characteristics of such part.

(5) Where a utility decides, in accordance with paragraph (6), to undertake a procurement for the award of a single contract and—

(a)part of the contract is covered by [F36regulation 3(2)], the contract may be awarded without applying these Regulations; or

(b)part of the contract is covered by the Defence and Security Regulations, the procurement may be undertaken in accordance with those Regulations, in which event these Regulations will not apply to such procurement.

(6) A utility may only decide to undertake a procurement for the award of a single contract of a kind referred to in paragraph (5) where—

(a)different parts of such a contract are not objectively separable; or

(b)such decision is justified by objective reasons.

(7) Paragraph (5)(b) is without prejudice to the thresholds and exclusions provided for by the Defence and Security Regulations.

(8) Paragraph (5)(a) applies to a mixed contract to which both paragraph (5)(a) and (5)(b) could otherwise apply.

Textual Amendments

Commencement Information

I10Reg. 24 in force at 18.4.2016, see reg. 1(2)

Procurement covering several activities and involving defence or security aspectsS

25.—(1) This regulation applies where a procurement has as its subject a contract covering more than one activity, where one or more of those activities are covered by [F37regulation 3(2)] or the Defence and Security Regulations.

(2) A utility may decide to undertake procurement for the award of—

(a)separate contracts for the separate activities; or

(b)a single contract.

(3) Any decision to undertake a procurement for the award of a single contract must not be made for the purpose of excluding the procurement from the application of these Regulations or the Defence and Security Regulations.

(4) Where a utility decides to undertake procurement for the award of separate contracts for separate activities the applicable law for the procurement of each separate activity will be determined by the characteristics of such activity.

(5) Where a utility decides, in accordance with paragraph (6), to undertake a procurement for the award of a single contract and—

(a)part of the contract is intended to cover an activity which is covered by [F38regulation 3(2)], the contract may be awarded without applying these Regulations; or

(b)part of the contract is intended to cover an activity which is covered by the Defence and Security Regulations, the procurement may be undertaken in accordance with those Regulations, in which event these Regulations do not apply to such procurement.

(6) A utility may only decide to undertake a procurement for the award of a single contract of a kind referred to in paragraph (5) where such decision is justified by objective reasons.

(7) Paragraph (5)(b) is without prejudice to the thresholds and exclusions provided for by the Defence and Security Regulations.

(8) Paragraph (5)(a) applies to a mixed contract to which both paragraph (5)(a) and (5)(b) could otherwise apply.

Textual Amendments

Commencement Information

I11Reg. 25 in force at 18.4.2016, see reg. 1(2)

Contracts and design contests involving defence and security aspects which are awarded or organised pursuant to international rulesS

26.—(1) These Regulations do not apply to procurement for the award of a contract or to a design contest involving defence or security aspects which the utility is obliged to award or organise in accordance with a procurement which is established by—

(a)an international agreement or arrangement, concluded in conformity with the [F39Retained] Treaties, between the United Kingdom and one or more [F40other] country or part thereof and covering works, supplies or services intended for the joint implementation or exploitation of a project by their signatories;

(b)an international agreement or arrangement relating to the stationing of troops and concerning the undertakings of the United Kingdom or [F41another] country; or

(c)an international organisation.

(2) These Regulations do not apply to procurement for the award of a contract or to the organisation of a design contest involving defence or security aspects which the utility carries out in accordance with procurement rules provided by an international organisation or international financing institution where the contract or design contest concerned is fully financed by that organisation or institution or is co-financed for the most part by such organisation or institution.

Textual Amendments

Commencement Information

I12Reg. 26 in force at 18.4.2016, see reg. 1(2)

SUB-SECTION 3SSpecial relations (cooperation, affiliated undertakings and joint ventures)
Exclusion: contracts between contracting authoritiesS

27.—(1) These Regulations do not apply to procurement for the award of a contract—

(a)by a contracting authority to a controlled person;

(b)by a controlled person to a contracting authority which controls that person; or

(c)by a controlled person to another controlled person where both such persons are controlled by the same contracting authority.

(2) For the purpose of this regulation, a person is a “controlled person” where—

(a)the contracting authority exercises over that person control similar to that which it exercises over its own departments;

(b)the person carries out more than 80% of its activities in the performance of tasks entrusted to it by the authority or by other persons controlled by that authority; and

(c)no other person has direct private capital participation in the person with the exception of non-controlling and non-blocking forms of private capital participation required by any enactment, in conformity with the [F42Retained] Treaties, which do not exert a decisive influence on the person being awarded the contract.

(3) For the purpose of paragraph (2)(a) an authority shall be deemed to exercise control over a person similar to the control that it exercises over its own departments where—

(a)it exercises a decisive influence over the strategic objectives and significant decisions of the person; or

(b)such control is exercised by another person which is itself controlled in the same way by the contracting authority.

(4) These Regulations do not apply to procurement for the award of a contract by a contracting authority to a person which is jointly controlled.

(5) For the purpose of paragraph (4) a person is jointly controlled where—

(a)the contracting authority, jointly with other contracting authorities, exercises over that person control similar to that which the authorities exercise over their own departments;

(b)the person carries out more than 80% of its activities in the performance of tasks entrusted to it by the contracting authorities or by other persons controlled by those authorities; and

(c)no other person has direct private capital participation in the person with the exception of non-controlling and non-blocking forms of private capital participation required by any enactment, in conformity with the [F43Retained] Treaties, which do not exert a decisive influence on the person being awarded the contract.

(6) For the purpose of paragraph (5)(a) contracting authorities shall be deemed to exercise control over a person similar to the control that they exercise over their own departments where—

(a)the decision making bodies of the person are composed of representatives of all participating contracting authorities;

(b)those contracting authorities jointly exercise a decisive influence over the strategic objectives and significant decisions of the person; and

(c)the person does not pursue any interests which are contrary to those of the contracting authorities.

(7) For the purpose of paragraph (6)(a) individual representatives may represent several or all of the contracting authorities.

(8) These Regulations do not apply to procurement for the award of a contract exclusively between two or more contracting authorities where—

(a)the contract is for the purpose of establishing or implementing co-operation between those contracting authorities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common;

(b)the implementation of that co-operation is governed solely by considerations relating to the public interest; and

(c)the contracting authorities perform on the open market less than 20% of the activities concerned by the co-operation.

(9) The percentage of activities referred to in paragraphs (2)(b), (5)(b) and (8)(c), shall be determined by reference to—

(a)the average turnover of the person or, as the case may be, contracting authority for the period of 3 years preceding the date of the proposed contract award; or

(b)an appropriate alternative activity-based measure such as costs incurred by the relevant person or contracting authority with respect to works, supplies and services for such 3 year period.

(10) Where paragraph (11) applies, an alternative credible measurement of activity shall be used and for this purpose use of business projections shall be treated as a credible measure.

(11) This paragraph applies where the turnover or an appropriate activity-based measure is not available for the preceding 3 years or is no longer relevant because of—

(a)the date on which the person or contracting authority was created or commenced activities; or

(b)a reorganisation of its activities.

Textual Amendments

Commencement Information

I13Reg. 27 in force at 18.4.2016, see reg. 1(2)

Exclusion: contracts awarded to an affiliated undertakingS

28.—(1) Provided that the conditions in paragraphs (2) to (4) are met, these Regulations do not apply to procurement for the award of a contract—

(a)by a utility to an affiliated undertaking; or

(b)by a joint venture, formed exclusively by a number of utilities for the purpose of carrying out activities described in regulations 8 to 14, to an affiliated undertaking of one of its members.

(2) The conditions are that:—

(a)in respect of service contracts, at least 80% of the average total turnover of the affiliated undertaking over the preceding 3 years, taking into account all services provided by that undertaking, derives from the provision of services to the utility or one or more of the utility’s affiliated undertakings;

(b)in respect of supply contracts, at least 80% of the average total turnover of the affiliated undertaking over the preceding 3 years, taking into account all supplies provided by that undertaking, derives from the provision of supplies to the utility or one or more of the utility’s affiliated undertakings;

(c)in respect of works contracts, at least 80% of the average total turnover of the affiliated undertaking over the preceding 3 years, taking into account all works provided by that undertaking, derives from the provision of works to the utility or one or more of the utility’s affiliated undertakings.

(3) Where the turnover referred to in paragraph (2) is not available for the preceding 3 years because of the date on which an affiliated undertaking was created or commenced activities an alternative credible measurement of turnover shall be used for paragraph (2) and for this purpose use of business projections shall be treated as a credible measure.

(4) Where more than one affiliated undertaking of a utility form an economic group and provide the same or similar works, supplies or services, the percentages referred to in paragraph (2) shall be calculated taking into account the total turnover deriving respectively from the provision of works, supplies or services by those affiliated undertakings.

(5) In this regulation, “affiliated undertaking” means—

(a)[F44any undertaking the annual accounts of which are consolidated with those of the utility in accordance with the requirements of Part 15 of the Companies Act 2006]F45; or

(b)in the case of an undertaking which is not subject to that [F46Part], any undertaking that—

(i)may be, directly or indirectly, subject to a dominant influence by the utility;

(ii)may exercise a dominant influence over the utility; or

(iii)in common with the utility, is subject to the dominant influence of another undertaking by virtue of ownership, financial participation or the rules which govern it.

(6) For the purposes of paragraph (5)(b), a dominant influence has the same meaning as in regulation 4(3) (utilities).

(7) This regulation applies despite the provisions of regulation 27 (exclusions: contracts between contracting authorities).

Textual Amendments

Commencement Information

I14Reg. 28 in force at 18.4.2016, see reg. 1(2)

Exclusion: Contracts awarded to a joint venture or to a utility forming part of a joint ventureS

29.—(1) Subject to paragraphs (2) and (3), these Regulations do not apply to procurement for the award of a contract—

(a)by a joint venture, formed exclusively by a number of utilities for the purpose of carrying out activities within the meaning of regulations 8 to 14, to one of those utilities; or

(b)by a utility to such a joint venture of which it forms part.

(2) The joint venture must have been set up in order to carry out the activity concerned over a period of at least 3 years and the instrument setting up the joint venture must stipulate that the utilities which form it will be part of the joint venture for at least the same period.

(3) This regulation applies despite the provisions of regulation 27 (exclusions: contracts between contracting authorities).

Commencement Information

I15Reg. 29 in force at 18.4.2016, see reg. 1(2)

Notification of informationS

F4730.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

SUB-SECTION 4SSpecific situations
Research and development servicesS

31.  These Regulations only apply to procurement for the award of service contracts for research and development services which are covered by CPV Codes 73000000-2 to 73120000-9, 73300000-5, 73420000-2 and 73430000-5 provided that—

(a)the benefits accrue exclusively to the utility for use in the conduct of its own affairs; and

(b)the service provided is wholly remunerated by the utility.

Commencement Information

I16Reg. 31 in force at 18.4.2016, see reg. 1(2)

SUB-SECTION 5SActivities directly exposed to competition and related procedural provisions
Activities directly exposed to competitionS

32.—(1) These Regulations do not apply to procurement for the award of a contract or a design contest intended to enable an activity mentioned in regulations 8 to 14 to be carried out where that activity is directly exposed to competition on markets to which access is not restricted.

(2) For the purposes of paragraph (1), the activity is directly exposed to competition on markets to which access is not restricted only if—

(a)the activity is covered by the following Commission decisions—

(i)Commission Decision 2006/211/EC establishing that Article 30(1) of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors applies to electricity generation in England, Scotland and Wales (notified under document number C(2006) 690)(3);

(ii)Commission Decision 2007/141/EC establishing that Article 30(1) of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors applies to the supply of electricity and gas in England, Scotland and Wales (notified under document number C(2007) 559)(4); and

(iii)Commission Decision 2010/192/EU exempting exploration for and exploitation of oil and gas in England, Scotland and Wales from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (notified under document C(2010) 1920)(5); F48...

F48(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The activity referred to in paragraph (1) may form a part of a larger sector or be exercised only in certain parts of the United Kingdom.

Textual Amendments

Commencement Information

I17Reg. 32 in force at 18.4.2016, see reg. 1(2)

Procedure for establishing whether regulation 32(2)(b) is applicableS

F4933.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

(1)

OJ L 145, 30.4.2004, p.1.

(2)

OJ L 95, 15.4.2010, p.1.

(3)

OJ L 76, 15.3.2006, p.6.

(4)

OJ L 62, 1.3.2007, p.23.

(5)

OJ L 84, 31.3.2010, p.52.

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