Public Contracts Regulations 2015 - Regulation 13

Regulation 13 - Contracts subsidised by contracting authorities

Regulation 13 takes us out of Sub-Section 3 (exclusions) and into Sub-Section 4 (specific situations) of Part 2. This Regulation covers contracts that are subsidised by contracting authorities, transposing Article 13 of Directive 2014/24/EU into England, Wales and Northern Ireland. As with most provisions we have covered so far, follows a pure copy & paste approach with only very limited differences.

The purpose of this Regulation and the underlying Article is to ensure that some contracts subsidised by contracting authorities are not taken out of public procurement just by the fact the public money is being spent via a subsidy instead of a direct procurement. This provision is only applicable to (some) works contracts and to ancillary service contracts when 50% of the funds come from a contracting authority.

The Regulation is not clear if the 50% funding threshold depends on a single contracting authority or can be cumulatively analysed when different contracting authorities chip in part of the subsidy, together bringing the total subsidy for the contract above the 50% mark. The way the provision is drafted, speaking of "contracting authorities" and its logic (to avoid a loophole) lead me to think that the second interpretation is correct.

Regulation 13 only applies to works contracts such as civil engineering works listed in Schedule 2 or building work for hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes. I am puzzled about this distinction as pretty much any of the building work mentioned explicitly can be subsumed to the concept of civil engineering works under Schedule 2 (or Annex II of the Directive). However, the same distinction is present in the Directive and as such the responsibility for yet another tautology lies more with it than with the transposition.

Finally, the Regulation introduces a couple of small novelties. Whereas Article 13(1)(a) refers to a threshold of €5,186,000 and 13(1)(b) to €207,000 before the Directive is deemed applicable, the Regulation instead makes a direct cross-reference to the Article, effectively leaving in the hands of EU lawmakers any future update to these values. This is a safe option, however in alternative, the Regulation could have either provided its own values or - more likely - refer to the threshold rules of Regulation 5. As it stands, there is a slight risk that if the thresholds change in the future, this Regulation and the underlying Article may be out of sync with those new thresholds. Again, this is more a problem with the Directive than with the transposition itself.

Albert's entry for today is here.