21.—(1) Subject to paragraphs (5), (6) and (7) below, a contracting authority shall award a public services contract on the basis of the offer which—
(a)is the most economically advantageous to the contracting authority, or
(b)offers the lowest price.
(2) The criteria which a contracting authority may use to determine that an offer is the most economically advantageous include period from completion or delivery, quality, aesthetic and functional characteristics, technical merit, after sales service, technical assistance and price.
(3) Where a contracting authority intends to award a public services 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 the contract notice or in the contract documents.
(4) Where a contracting authority awards a public services 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—
(a)the offer meets the minimum requirements on the contracting authority, and
(b)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 contracting authority will not take account of offers which offer such variations it shall state that fact in the contract notice.
(5) A contracting authority may not reject an offer which offers variations on the requirements specified in the contract documents on the ground that it would lead to the award of a public supply contract within the meaning of the Public Supply Contracts Regulations 1991(1).
(6) A contracting authority may not reject an offer on the ground that the technical specifications in the offer have been defined by reference to European specifications (within the meaning of regulation 8(1)) or to the national technical specifications specified in regulation 8(7)(a) and (b).
(7) If an offer for a public services contract is abnormally low the contracting authority 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 and has—
(a)if awarding the public services contract on the basis of the offer which offers the lowest price, examined the details of all the offers made, taking into account any explanations given to it of the abnormally low tender, before awarding the contract, or
(b)if awarding the public services 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 contracting authority may take into account explanations which justify the offer on objective grounds including the economy of the method of providing the services, the technical solutions suggested by the services provider or the exceptionally favourable conditions available to the services provider for the provision of the services or the originality of the services proposed by the services provider.
(8) If a contracting authority which rejects an abnormally low offer is awarding the public services contract on the basis of the offer which offers the lowest price, it shall send a report justifying the rejection to the Treasury for onward transmission to the Commission.
(9) For the purposes of this regulation “offer” includes a bid by one part of a contracting authority to provide services to another part of the contracting authority when the former part is invited by the latter part to compete with the offers sought from other persons.
S. I. 1991/2679 as amended by S. I. 1992/3279.