The Utilities Contracts Regulations 1996

Thresholds

10.—(1) These Regulations shall not apply to the seeking of offers in relation to a proposed 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 supply or services contract to be awarded by a utility other than one specified in Part T of Schedule 1, is 400,000 ECU;

(b) in relation to a supply or services contract to be awarded by a utility specified in part T of Schedule 1, is 600,000 ECU; and

(c) in relation to a works contract, is 5,000,000 ECU.

(3) Subject to paragraphs (5), (7), (10), (11), (12), (13), (16) and (18) below in the case of a supply contract, subject to paragraphs (8), (9), (14), (15) and (18) below in the case of a works contract, and subject to paragraphs (4), (6), (7), (10), (11), (12), (13), (16) and (18) below in the case of a services contract, the estimated value of a contract for the purposes of paragraph (1) above shall be the value of the consideration which the utility expects to be payable under the contract.

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

(a) the premium payable for insurance services,

(b) the fees, commissions or other remuneration payable for banking and financial services, and

(c) the fees or commissions payable for design services.

(5) The estimated value for the purposes of paragraph (1) above of a 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 utility expects to be payable in respect of the first four years of the hire.

(6) The estimated value for the purposes of paragraph (1) above of a services contract under which services are to be provided over a period exceeding 4 years or over an indefinite period, in cases where the contract does not indicate a total cost, shall be the value of the consideration which the utility expects to be payable in respect of each month of the period multiplied by 48.

(7) Subject to paragraph (12) below, where a utility has a single requirement for goods or services and a number of supplies or services contracts have been entered into or are to be entered into to fulfil that requirement, 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 utility expects to be payable under each of those contracts.

(8) Subject to paragraph (9) below, where a utility proposes to enter into two or more contracts for the carrying out of a work, 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 utility expects to be payable under each of those contracts.

(9) Paragraph (8) above shall not apply to any works contract (unless the utility chooses to apply that paragraph to that contract) if that contract has an estimated value (calculated in accordance with paragraph (3) above) of less than 1,000,000 ECU, and the aggregate value of that contract and of any other contract in respect of which the utility takes advantage of the disapplication of paragraph (8) above by virtue of this paragraph is less than 20 per cent of the aggregate of the value of the consideration which the utility has given or expects to be payable under all the contracts entered or to be entered into for the carrying out of the work.

(10) Subject to paragraph (12) below, where a utility has a requirement over a period—

(a) for the purchase or hire of goods of the type to be purchased or hired under the contract; or

(b) for services of the type to be provided under the contract,

and for that purpose enters into—

(i) a series of contracts, or

(ii) a contract which under its terms is renewable,

• the estimated value for the purposes of paragraph (1) above of the contract shall be the amount calculated under paragraph (11) below.

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

(a) by taking the aggregate of the value of the consideration payable under contracts which have similar characteristics and which are for the purchase or hire of goods of the type to be purchased or hired under the contract or for the provision of services of the type to be provided under the contract, 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 purchase or hire of goods of the type to be purchased or hired under the contract or for the provision of services of the type to be provided under the contract, during the period of 12 months from the first date—

(i) of delivery of the goods to be purchased or hired, in the case of supply contracts;

(ii) on which the services will be performed, in the case of services contracts,

or, where the contract is either a supply or services contract for a definite term of more than 12 months, during the term of the contract.

(12) Notwithstanding paragraphs (7) and (10) above, in relation to a supply or services contract, when the goods to be purchased or hired or the services to be provided under the contract are required for the sole purposes of a discrete operational unit within the organisation of a utility and—

(a) the decision whether to procure the 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 (7) and (11) above 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 contracts for the purchase or hire of goods or for the provision of services which were or are required for the sole purposes of that unit.

(13) Where a supply or services 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.

(14) Where a utility intends to provide any goods or services to the person awarded a works contract for the purpose of carrying out that contract, the value of the consideration for the purposes of paragraphs (3) and (8) above shall be taken to include the estimated value at the relevant time of those goods and services.

(15) 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) above 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.

(16) Where under a contract both goods are to be purchased or hired and services are to be provided, the estimated value of the contract shall be 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) above.

(17) The estimated value of a framework agreement shall be the aggregate of the values estimated in accordance with this regulation of all the contracts which could be entered into under the framework agreement.

(18) A utility shall not enter into separate contracts nor select nor exercise a choice under a valuation method in accordance with paragraph (11) above 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 (14) above means—

(a) if the utility selects providers to tender for or to negotiate the contract in accordance with a qualification system established in accordance with regulation 18, the date on which the selection commences, or

(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 15(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.