Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
Our New Year e-briefing detailed the new EU procurement tendering thresholds with effect from 1 January 2016. However, there was one missing.
This particular threshold was overlooked by both the European Commission when they issued their sterling conversion figures and by the Crown Commercial Service (CCS) in their guidance on them.
The missing threshold is the one for Article/Regulation 83 of the 2014 Directive/2015 Regulations. This requires a contracting authority to give access to copies of all concluded contracts with values of over:
- €1 million, in the case of supplies and services contracts; and
- €10 million, in the case of works contracts.
No sterling equivalent figures have been produced by the Commission for these thresholds.
We raised this omission with the Cabinet Office via the CCS, and received the following “helpful” reply:
“We will provide guidance on the best approach but we are yet to take a view on what would be the best sterling equivalent for that figure and will need to hold discussions with other parties before doing so.
One option of course would be to take the 1,000,000 figure and multiply by 10 as you suggest but as that is based on the thresholds which are revised every 2 years and we would need to advise whether this would need to be updated every 2 years.
Unfortunately we are unable to provide a timescale for the publication of guidance at present but please look on our transposition website for further updates: https://www.gov.uk/guidance/transposing-eu-procurement-directives”
Our suggestion had been to use the €1 million conversion figure of £785,530 for the “small lots” threshold for works contracts as the figure for supplies and services contracts and to multiply this by 10 for the threshold for works contracts.
Until this has been confirmed by the Commission, the obligation would therefore seem to be to make copies of contracts available where they have an unspecified sterling value that equates roughly to €1 million, where they are for supplies or services, or €10 million, where they are for works. A practical approach would be to equate this “unspecified value” to:
- £785,530 for supplies and services contracts; and
- £7,855,300 for works contracts.
For more information
Please contact Andrew Millross.
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