Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
This is one area where the Crown Commercial Service guidance is correct. As that guidance says,
“Where a contracting authority is satisfied that it is lawful not to advertise an opportunity…and chooses not to advertise the opportunity at all, the requirement to advertise on Contracts Finder does not apply to that contract.”
The question is, therefore, when it is possible to choose not to advertise a contract. The European Commission issued some guidance on this in 2006. This guidance says that there is no need to advertise a contract valued below the applicable tendering threshold (taking account of any “aggregation” of the value of that contract with similar contracts) unless that contract is potentially of interest to contractors outside the UK.
Whether a contract is of interest to contractors outside the UK is for the purchasing organisation to decide, and it is important to keep an audit trail of these decisions. For many lower value services and works contracts the set up and mobilisation costs make it unlikely that contractors from outside the UK would be interested. In fact, we don’t see many non-UK contractors tendering for these kinds of works and services contracts even when their value is above the EU tendering threshold and they are advertised through OJEU.
If there is no obligation to advertise a contract publicly (i.e. you approach one or more contractors privately and ask them to submit tenders) there is no need advertise the opportunity on Contracts Finder. There is, however, a trap to avoid here. The definition of “advertising a contract publicly” is very wide. It could include, for example, publicity on your own website as to how to apply for places on an “approved list”. Technically, these kinds of opportunities must also be advertised on Contracts Finder.
Once you have signed a contract with a value of over £25,000, you must, of course, still put details of this on Contracts Finder, although you can do this on a quarterly basis.
In summary, therefore, there is no need to advertise the tendering of a contract on Contracts Finder with a value between £25,000 and the applicable EU tendering threshold unless:
- that contract is potentially of interest to non-UK contractors; or
- you choose to advertise that contract publicly elsewhere.
For more information
If you have any questions about this ebriefing or the new Regulations generally, please contact Andrew Millross or any member of our procurement team.
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