Contracts Subject to EU Procurement Rules

Introduction

EU procurement rules were introduced by the European Community to open up competition between member states. This is because public sector spending represents huge sums.

EU Procurement Thresholds (as at 01.01.2010)

Any contracts with an estimated value of more than the amounts listed below are subject to specific rules regarding specification and the tender process.

These thresholds are subject to amendment by the European Union and are usually adjusted every 2 years, latest guidelines can be obtained from the Office of Government Commerce (OGC).

Considerations for contracts falling within each of the above are listed below.

• Values exclude VAT.
• Values are TOTAL values NOT annual values e.g. a 3 year contract valued at £60,000 per annum (total value £180,000) is covered.
• Values are to be aggregated e.g. if you have an ongoing annual need for supplies.
• It is a breach of EU law to deliberately divide up contracts to avoid the rules.
• There are specific rules in relation to extensions of existing contracts.
• There are specific rules relating to contracts for both services and supplies.
• There are specific exceptions to these thresholds. They are similar to the COUNCIL exceptions, but different procedures apply.

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The EU Procurement Directives

The Directives cover the following: -

Works - Building and engineering capital works over £3,927,260

Supplies - Supply, lease, rental or hire purchase of goods over £156,442

Services - Supply of services over £156,442 (Does not apply to employment contracts).

The application of the Services Directive is split between Part A services (e.g. IT) which are subject to the full European regime and Part B services (e.g. catering) which have minimal legislative requirements.

Part A Services (see below) are subject to the full requirements. This means for instance, that the services must be advertised in the Official Journal of the European Union (OJEU).

Part B Services (summarised below) have minor requirements. The main requirements are in
relation to technical specification and award notice.

The above categories are in summary form only. There are extensive and detailed EU definitions for the types of services covered under each of these categories.

Please see Tendering Procedures which outlines the processes and timescales for contracts subject to EU procurement rules.

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