The Utilities Contracts Regulations 2016

CHAPTER 4 E+W+N.I. Contract performance

Conditions for performance of contracts E+W+N.I.

86.—(1) Utilities may lay down special conditions relating to the performance of a contract, provided that they are—

(a) linked to the subject-matter of the contract within the meaning of regulation 82(5); and

(b) indicated in the call for competition or in the procurement documents.

(2) Those conditions may include economic, innovation-related, environmental, social or employment-related considerations.

Subcontracting E+W+N.I.

Giving information to utilities

87.—(1) In the procurement documents, the utility may ask the tenderer to indicate in its tender any share of the contract that it may intend to subcontract to third parties and any proposed subcontractors.

(2) Paragraph (1) is without prejudice to the question of the main contractor's liability.

(3) In the case of works contracts and in respect of services to be provided at a facility under the direct oversight of the utility, after the award of the contract and at the latest when the performance of the contract commences, the utility shall require the main contractor to notify to the utility the name, contact details and legal representatives of its subcontractors, involved in such works or services, insofar as known at the time.

(4) The utility shall require the main contractor to notify the utility of—

(a) any changes to the information notified under paragraph (3) during the course of the contract; and

(b) the name, contact details and legal representatives of any new subcontractors which the main contractor subsequently involves in such works or services.

(5) Where necessary for the purposes of paragraph (8), the required information shall be accompanied by [F1 SPDs] (within the meaning of regulation 59 of the Public Contracts Regulations) in respect of subcontractors.

(6) Paragraphs (3) and (4) do not apply to suppliers.

(7) Utilities may extend the obligations provided for in paragraphs (3) and (4) to, for example—

(a) supply contracts, service contracts (other than those concerning services to be provided at the facilities under the direct oversight of the utility) or suppliers involved in works or services contracts;

(b) subcontractors of the main contractor's subcontractors or subcontractors further down the subcontracting chain.

Excluding subcontractors

(8) Utilities that are contracting authorities may verify whether there are grounds for exclusion of subcontractors under regulation 57 of the Public Contracts Regulations.

(9) In such cases, the utility—

(a) shall require that the economic operator replaces a subcontractor in respect of which the verification has shown that there are compulsory grounds for exclusion; and

(b) may require that the economic operator replaces a subcontractor in respect of which the verification has shown that there are non-compulsory grounds for exclusion.

(10) For the purposes of paragraph (8) and (9)—

(a) regulations 59 to 61 of the Public Contracts Regulations apply;

(b) references to regulations 56(2), 24 and 41 in regulation 57(8) of the Public Contracts Regulations shall have effect as though such references are to, respectively, regulations 76(6), 42 and 59 in these Regulations;

(c) references to regulations 62 and 63 in regulations 59 and 60 of the Public Contracts Regulations shall have effect as though such reference are to, respectively, regulations 81 and 79 in these Regulations;

(d) in regulation 59(9) of the Public Contracts Regulations, the words “where such contracts are concluded in accordance with regulations 33(7) or 8(a)” shall be replaced with “ with a single economic operator or where such contracts are concluded without reopening competition in accordance with regulation 51 of the Utilities Contracts Regulations 2016. ”;

(e) in regulation 58(9) of the Public Contracts Regulations, the words “in the report referred to in regulation 84(1).” shall be replaced with “ in the information and documentation referred to in regulation 99 of the Utilities Contracts Regulations 2016. ”.

(11) For the purposes of paragraph (5), regulation 59 of the Public Contracts Regulations shall have effect as though a reference to a contracting authority in that regulation were a reference to a utility.

Textual Amendments

F1 Word in reg. 87(5) substituted (31.12.2020) by The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1319), regs. 1(2), 10(50) (with Sch. paras. 3-5)

Modification of contracts during their term E+W+N.I.

88.—(1) Contracts and framework agreements may be modified without a new procurement procedure in accordance with these Regulations in any of the following cases—

(a) where the modifications, irrespective of their monetary value, have been provided for in the initial procurement documents in clear, precise and unequivocal review clauses, which may include price revision clauses, or options, provided that such clauses—

(i) state the scope and nature of possible modifications or options as well as the conditions under which they may be used; and

(ii) do not provide for modifications or options that would alter the overall nature of the contract or the framework agreement;

(b) for additional works, services or supplies by the original contractor, irrespective of their value, that have become necessary and were not included in the initial procurement where a change of contractor—

(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services or installations procured under the initial procurement; and

(ii) would cause significant inconvenience or substantial duplication of costs for the utility;

(c) where both of the following conditions are fulfilled—

(i) the need for modification has been brought about by circumstances which a diligent utility could not have foreseen;

(ii) the modification does not alter the overall nature of the contract;

(d) where a new contractor replaces the one to which the utility had initially awarded the contract as a consequence of—

(i) an unequivocal review clause or option in conformity with sub-paragraph (a); or

(ii) universal or partial succession into the position of the initial contractor, following corporate restructuring, including takeover, merger, acquisition or insolvency, of another economic operator that fulfils the criteria for qualitative selection initially established, provided that this does not entail other substantial modifications to the contract and is not aimed at circumventing the application of these Regulations;

(e) where the modifications, irrespective of their value, are not substantial within the meaning of paragraph (7); or

(f) where paragraph (4) applies.

(2) Utilities which have modified a contract in either of the cases described in paragraph (1)(b) and (c) shall [F2 submit] a notice to that effect, in accordance with regulation 71, for publication.

(3) Such a notice shall contain the information set out in Annex XVI to the Utilities Contracts Directive [F3 , but as if paragraph 10 (financing by EU funds) were omitted].

(4) This paragraph applies where the value of the modification is below both of the following values—

(a) the relevant threshold mentioned in regulation 16; and

(b) 10% of the initial contract value for service and supply contracts and 15% of the initial contract value for works contracts,

provided that the modification does not alter the overall nature of the contract or framework agreement.

(5) For the purposes of paragraph (4), where several successive modifications are made, the value shall be assessed on the basis of the net cumulative value of the successive modifications.

(6) For the purpose of the calculation of the values referred to in paragraph (4)(b), the updated figure shall be the reference figure when the contract includes an indexation clause.

(7) A modification of a contract or a framework agreement during its term shall be considered to be substantial within the meaning of paragraph (1)(e) where one or more of the following conditions is met—

(a) the modification renders the contract or the framework agreement materially different in character from the one initially concluded;

(b) the modification introduces conditions which, had they been part of the initial procurement procedure, would have—

(i) allowed for the admission of other candidates than those initially selected;

(ii) allowed for the acceptance of a tender other than that originally accepted; or

(iii) attracted additional participants in the procurement procedure;

(c) the modification changes the economic balance of the contract or the framework agreement in favour of the contractor in a manner which was not provided for in the initial contract or framework agreement;

(d) the modification extends the scope of the contract or framework agreement considerably;

(e) a new contractor replaces the one to which the utility had initially awarded the contract in cases other than those provided for in paragraph (1)(d).

(8) A new procurement procedure in accordance with these Regulations shall be required for modifications of the provisions of a contract or a framework agreement during its term other than those provided for in this regulation.

Textual Amendments

F2 Word in reg. 88(2) substituted (31.12.2020) by The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1319), regs. 1(2), 10(51)(a) (with Sch. paras. 3-5)

F3 Words in reg. 88(3) inserted (31.12.2020) by The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1319), regs. 1(2), 10(51)(b) (with Sch. paras. 3-5)

Termination of contracts E+W+N.I.

89.—(1) Utilities shall ensure that every contract which they award contains provisions enabling the utility to terminate the contract where—

(a) the contract has been subject to a substantial modification which would have required a new procurement procedure in accordance with regulation 88(8).

(b) the contractor has, at the time of contract award, been in one of the situations referred to in regulation 57(1) of the Public Contracts Regulations and should therefore have been excluded from the procurement procedure in accordance with regulation 80(2) of these Regulations.

F4 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Those provisions may address the basis on which the power is to be exercisable in those circumstances, for example by providing for notice of termination to be given and by addressing consequential matters that will or might arise from the termination.

(3) To the extent that a contract does not contain provisions enabling the utility to terminate the contract on any of the grounds mentioned in paragraph (1), a power for the utility to do so on giving reasonable notice to the contractor shall be an implied term of that contract.

Textual Amendments

F4 Reg. 89(1)(c) omitted (31.12.2020) by virtue of The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1319), regs. 1(2), 10(52) (with Sch. paras. 3-5, 7)