The Utilities Supply and Works Contracts Regulations 1992

Criteria for the award of a contract

20.—(1) Subject to regulation 21 below, a utility shall award a contract on the basis of the offer which—

(a) offers the lowest price, or

(b) is the most economically advantageous to the utility.

(2) The criteria which a utility may use to determine that an offer is the most economically advantageous include price, delivery date or period for completion, running costs, cost effectiveness, quality, aesthetic and functional characteristics, technical merit, after sales service and technical assistance, commitments with regard to spare parts and security of supply.

(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 criteria on which it intends to base its decision, where possible in descending order of importance, in any contract notice or in the contract documents,

(4) Where a utility awards a contract on the basis of the offer which is the most economically advantageous, it may take account of offers which offer variations on the requirements specified in the contract documents if the offer meets the minimum requirements of the utility and it has stated those minimum requirements and any specific requirements for the presentation of an offer offering variations in the contract documents; but if the utility will not take account of offers which offer such variations it shall state that fact in the contract documents.

(5) A utility may not reject a tender on the ground that the tender is based on, or the technical specifications in the tender have been defined by reference to, European specifications (within the meaning of regulation 11(1) above) or to national technical specifications recognised as complying with the essential requirements of Council Directive 89/106/EEC on the approximation of laws, regulations and administrative procedures in the member States relating to construction products(1).

(6) If an offer for a contract is abnormally low the utility may reject that offer but only if it has requested in writing an explanation of the offer or of those parts which it considers contribute to the offer being abnormally low, which request may set a reasonable period for reply, and has—

(a) if awarding the contract on the basis of the offer which offers the lowest price, examined the details of all the offers made, taking into account any explanation given to it of the abnormally low offer, before awarding the contract, or

(b) if awarding the contract on the basis of the offer which is the most economically advantageous, taken any such explanation into account in assessing which is the most economically advantageous offer,

and, in considering that explanation, the utility may take into account explanations which justify the offer on objective grounds including the economy of the construction or production method, the technical solutions suggested by the supplier or contractor orthe exceptionally favourable conditions available to the supplier or contractor for the performance of the contract or the originality of the goods or works proposed by the supplier or contractor.

(7) A utility may reject a tender for a contract which is abnormally low owing to the receipt of a state aid within the meaning of article 92 of the Treaty but only if it has consulted the supplier or contractor and the supplier or contractor has not been able to show that the aid in question has been notified to the Commission pursuant to article 93(3) of the Treaty or has received the Commission’s approval.

(8) A utility which rejects a tender in accordance with paragraph (7) above shall send a report to the Minister for onward transmission to the Commission.

(9) For the purposes of this regulation “offer” includes a bid by one part of a utility to supply goods or to carry out a work or works for another part of the utility when the former part is invited by the latter part to compete with the offers sought from other persons.

(1)

OJ No.L40, 11.2.89, p.12.