The Utilities Supply and Works Contracts Regulations 1992

Thresholds

9.—(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 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 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 (4), (5), (6), (9), (14) and (15) below in the case of a supply contract, and subject to paragraphs (10), (11), (12), (13), (14) and (15) below in the case of a works 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 give under the contract.

(4) 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 give in respect of the first four years of the hire.

(5) Subject to paragraph (8) below where a utility proposes to enter into two or more supply contracts at the same time in order to purchase or hire goods of a particular type, 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 give under each of those contracts.

(6) Subject to paragraph (8) below where a utility has a requirement over a period to purchase or hire goods of the type to be purchased or hired under the contract and for that purpose enters into—

(a) a series of supply contracts,

(b) a supply contract which under its terms is renewable, or

(c) a supply contract which is for the purchase of goods over an indefinite period,

the estimated value for the purposes of paragraph (1) above of the supply contract shall be the amount calculated under paragraph (7) below.

(7) The utility shall calculate the amount refered to in paragraph (6) above either—

(a) by taking the aggregate of the value of the consideration given by the utility under supply 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, 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 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 give under supply 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, during the period of 12 months from the first date of delivery of the goods to be purchased or hired under the contract or, where the contract is for a definite term of more than 12 months, during the term of the contract.

(8) Notwithstanding paragraphs (5) and (6) above when the goods to be purchased or hired 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 purchase or hire goods of that type 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 (5) and (7) above shall be adapted by aggregating only the value of the consideration which the utility has given or expects to give, as the case may be, under contracts for the purchase or hire of goods which were or are required for the sole purposes of that unit.

(9) Where a supply 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.

(10) Subject to paragraphs (11) and (12) below, the estimated value for the purposes of paragraph (1) above of a works contract which is one of a number of contracts entered or to be entered into for the carrying out of a work shall be the aggregate of the value of the consideration which the utility has given or expects to give under all the contracts for the carrying out of the work.

(11) Paragraph (10) 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 works contract for the carrying out of the work in respect of which the utility takes advantage of the disapplication of paragraph (10) 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 give under all the contracts for the carrying out of the work.

(12) 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 (10) above shall be taken to include the estimated value at the relevant time of those goods and services.

(13) Where the estimated value of a works contract estimated in accordance with paragraph (3) above is less than the relevant threshold and where goods which are not necessary for its execution are to be purchased or hired 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 the relevant threshold shall be determined in accordance with paragraph (2) above as if the works contract were a supply contract.

(14) 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.

(15) A utility shall not enter into separate contracts nor select nor exercise a choice under a valuation method in accordance with paragraph (7) above with the intention of avoiding the application of these Regulations to those contracts.

(16) The relevant time for the purposes of paragraphs (1), (7) and (12) above means—

(a) if the utility selects suppliers or contractors to tender for or to negotiate the contract in accordance with a qualification system established in accordance with regulation 17 below, 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 14(2)(a)(i) below, 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.