Public Contracts Regulations 2015 - Regulation 90

Regulation 90 - Duty owed to economic operators from certain other states

This Regulation extends the duty created in Regulation 89 to economic operators based in other countries. This extension is provided for economic operators from countries signatory to the Government Procurement Agreement (GPA) and other countries where a bilateral agreement on procurement exists. The number of signatory parties to the GPA is small but growing.

As for the GPA extension, it is applicable only to contracts covered by it. Defining what is covered is not easy and depends upon looking into the specific commitments both the EU and other parties have made. As such, paragraph 2 establishes a "minimum common denominator" approach to the duty, making it depending on the reciprocity of the GPA state.

Let's use an example with a works contracts. The EU's GPA commitment is identical to the thresholds so in absence of a "minimum common denominator" rule, all contracts over €5,186,000 would be open to economic operators from all other GPA parties. However, the minimum common denominator rule only extends the obligations from Regulation 89 if there is reciprocity in the commitment of the other GPA member.

In our example the contract is valued at €5,500,00 and both American and Israeli economic operators want to take part on it. Only the first are entitled to the duty from Regulation 89. Why? Because their GPA threshold for works contracts is SDR 5,000,000 (identical to the EU's) whereas Israel has adopted a higher threshold of SDR 8,500,000, well above to the EU threshold. However, Israel will bring down this threshold to SDR 5,000,000 in 2020.

Bilateral agreement extensions apply in case the EU has entered into an agreement whereby it granted to a third country remedies that are "no less favourable" than the ones given to EU based economic operators (paragraph 3). I am surprised that the Regulation refers specifically to "EU economic operators" instead of EEA ones as this Regulation is extending the rights of Regulation 89 to economic operators from other countries.

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