European Union Legislation and Procurement Reform (Scotland) Act 2014: reference pack

3. Scope, Thresholds and Definitions

Public Contracts (Scotland) Regulations 2015

EU regulated procurements must be advertised on Public Contracts Scotland ( PCS) and in the Official Journal of the European Union ( OJEU) when their estimated value is equal to or greater than the thresholds below:

	Supplies	Services	Works
Central Government Bodies	£118,133	£118,133	£4,551,413
Other Public Sector Contracting Authorities	£181,302	£181,302	£4,551,413
Social and Other Specific Services		£615,278
Small Lots	£65,630	£65,630	£820,370

Procurement Reform (Scotland) Act 2014

Regulated procurements must be advertised on Public Contracts Scotland ( PCS) when their estimated value is equal to or greater than the Reform Act thresholds below:

Goods and services, including framework agreements and dynamic purchasing systems	≥ £50,000
Works contracts, including framework agreements and dynamic purchasing systems	≥ £2,000,000

Threshold and methods for calculating the estimated value of a Concession contract

What is the threshold for applying the Concessions Contracts (Scotland) Regulations 2016?

The Concessions Contracts (Scotland) Regulations 2016 applies only to work or service concession contracts where the value is equal to or greater than	≥ £4,104,394

How is a Concession’s estimated value calculated?

When estimating a concession’s value, a procurer must take into account the concessionaire’s total turnover generated over the duration of the contract (net of VAT), in consideration for the works and services that are the subject of the concession, and the supplies incidental to such works and services.

Mixed Procurement

The Public Contracts (Scotland) Regulations 2015, in conjunction with the other sets of procurement Regulations, set out which legal regime(s) should apply where there is a mixed contract.

It should be noted that mixed procurement applies to two distinct situations:

a) Where there are mixed contracts within the scope of the Public Contracts (Scotland) Regulations 2015 (contracts which include two or more elements which could be described as supplies, works or services).

b) Where there are mixed contracts covered by the Public Contracts (Scotland) Regulations 2015 and other procurement regimes.

Flowchart

The following flowchart highlights the key decisions to determine what rules apply to mixed contracts:

Mixed Contracts: Public Contracts (Scotland) Regulations 2015 and another part of the procurement regime

• Where a contract includes different parts which are objectively separable and it is justifiable, these contracts can be awarded separately or as a single contract.
• Where a mixed contract combines a contract under the Public Contracts (Scotland) Regulations 2015 and a concession contract, if the public contract element is within the relevant threshold, the Public Contracts (Scotland) Regulations 2015 shall apply.
• Where a mixed contract combines a contract under the Public Contracts (Scotland) Regulations 2015 and a utilities contract, no matter the value, the applicable rules shall be determined by Article 5 and 6 of the Utilities Contracts Directive 2014/25/ EU.
• Where there is any defence procurement element (Article 346 TFEU or the Defence Directive 2009/81/EC), the Defence Regulations ^[11] shall apply.

New terms in the Public Contracts (Scotland) Regulations 2015

Sub-central contracting authorities

‘Sub-central contracting authorities’ means all contracting authorities which are not central government authorities (including health boards) listed in Schedule 1 of the Public Contracts (Scotland) Regulations 2015.

Ancillary purchasing activities

‘Ancillary purchasing activities’ means activities consisting in the provision of support to purchasing activities, in particular in the following forms:

a) technical infrastructure enabling contracting authorities to award public contracts or to conclude framework agreements for works, supplies or services;

b) advice on the conduct or design of public procurement procedures;

c) preparation and management of procurement procedures for or on behalf of the contracting authority concerned.

Procurement service provider

‘Procurement service provider’ means a public or private body which offers ancillary purchasing activities on the market.

Life cycle

‘Life cycle’ means all consecutive and/or interlinked stages. This includes research and development to be carried out, production, trading and its conditions, transport, use and maintenance. This extends throughout the existence of the product/works or the provision of the service, from raw material acquisition or generation of resources to disposal, clearance and end of service or utilisation.

Innovation

‘Innovation’ means the implementation of a new or significantly improved product, service or process. This includes, but is not limited to, production, building or construction processes, a new marketing method, a new organisational method in business practices, workplace organisation or external relations inter alia with the purpose of helping to solve societal challenges or to support the Europe 2020 strategy for smart, sustainable and inclusive growth.

Label

‘Label’ means any document, certificate or attestation confirming that the works, products, services, processes or procedures in question meet certain requirements.

Label requirements

‘Label requirements’ means the requirements to be met by the works, products, services, processes or procedures in question in order to obtain the label concerned.

New terms in the Concessions Contracts (Scotland) Regulations 2016

Works concession

‘Works concession’ means a contract for pecuniary interest concluded in writing by means of which one or more contracting authorities or contracting entities entrust the execution of works to one or more economic operators. The consideration consists either solely in the right to exploit the works that are the subject of the contract or in that right together with payment.

Services concession

‘Services concession’ means a contract for pecuniary interest concluded in writing where one or more contracting authorities or contracting entities entrust the provision and management of services other than the execution of works to one or more economic operators. The consideration consists either solely in the right to exploit the works that are the subject of the contract or in that right together with payment.

Concessionaire

‘Concessionaire’ means an economic operator which has been awarded a concession.

Execution of works

‘Execution of works’ means the execution, or both the design and execution, of works in Schedule 1, of the Concessions Contracts (Scotland) Regulations 2016, or of a work corresponding to the requirements specified by the contracting authority or contracting entity exercising a decisive influence on the type or design of the work.

Exclusive right

‘Exclusive right’ means a right granted by a competent authority of a Member State by means of any law, regulation or published administrative provision which is compatible with the Treaties. The effect is to limit the exercise of an activity to a single economic operator and which substantially affects the ability of other economic operators to carry out such an activity.

Special right

‘Special right’ means a right granted by a competent authority of a Member State by means of any law, regulation or published administrative provision which is compatible with the Treaties. The effect is to limit the exercise of an activity to two or more economic operators and which substantially affects the ability of other economic operators to carry out such an activity.

Concession document

‘Concession document’ means any document produced or referred to by the contracting authority or contracting entity to describe or determine elements of the concession or the procedure. This includes the concession notice, the technical and functional requirements, proposed conditions of concession, formats for the presentation of documents by candidates and tenderers, information on generally applicable obligations and any additional documents.

Terms found in the Procurement Reform (Scotland) Act 2014

Award notice

‘Award notice’ has the meaning given in section 23(6) of the Reform Act, is the information published in accordance with subsection (2) of Section 23 which is “A contracting authority must publicise the award of a contract under a regulated procurement on the Public Contracts Scotland website.”

Community benefit requirement

‘Community benefit requirement’ has the meaning given in section 24 of the Reform Act:

“For the purposes of this Act, a community benefit requirement is a contractual requirement imposed by a contracting authority -

a) relating to -

i) training and recruitment, or

ii) the availability of sub-contracting opportunities, or

b) which is otherwise intended to improve the economic, social or environmental wellbeing of the authority’s area in a way additional to the main purpose of the contract in which the requirement is included.”

Contract notice

‘Contract notice’ has the meaning given in section 23(6) of the Reform Act, means the information published in accordance with subsection (1) of section 23 which is “A contracting authority must publicise its intention to seek offers as part of a regulated procurement on the Public Contracts Scotland website.”

Contracting authority

‘Contracting authority’ has the meaning given in section 1,

“For the purposes of this Act, a ‘contracting authority’ is -

a) a body, office-holder or other person listed in the schedule, or

b) any other person who is a contracting authority for the purposes of the Public

Contracts Regulations and whose functions -

i) are exercisable in or as regards Scotland, and

ii) do not relate to reserved matters within the meaning of the Scotland Act 1998 (c.46).”

Economic operator

‘Economic operator’ means any person who offers the execution of works, the supply of products or the provision of services on the market.

Financial year

‘Financial year’ means the period of 12 months in respect of which the accounts of the contracting authority in question are prepared.

Public contract

‘Public contract’ means contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their objective the execution of works, the supply of products or the provision of services.

Public works contract

‘Public works contract’ means public contracts having as their objective one of the following:

a) the execution, or both the design and execution, of works related to one of the activities within the meaning of Annex II;

b) the execution, or both the design and execution, of works.

Regulated procurement

‘Regulated procurement’ is:

a) any procedure carried out by a contracting authority in relation to the award of a proposed regulated contract (where the procurement equals or exceeds £50,000 for supplies and services or £2,000,000 for works) including, in particular -

i) the seeking of offers in relation to the contract, and

ii) the selection of economic operators,

b) the award of a regulated contract by a contracting authority.

Authority’s area

‘Authority’s area’ is the area by reference to which the contracting authority primarily exercises its functions, disregarding any areas outside Scotland.

Wellbeing of the authority’s area

‘Wellbeing of the authority’s area’ includes, in particular, reducing inequality in the area.

QUIZ

Question 5

A ‘regulated contract under the Procurement Reform (Scotland) Act 2014 is? (please select all that apply):

a) A public contract

b) Not an excluded contract

c) All public contracts, not subject to thresholds

d) Equals or exceeds £50,000 (supplies and services)

e) Equals or exceeds £2,000,000 (works).

Question 6

Mixed Contracts: Where a procurement consists of two or more of works, supplies or a service, which regulations will apply to this procurement? (please select one answer):

a) The Regulations which characterise the works element

b) The Regulations which characterise the supplies element

c) The Regulations which characterise the service element

d) The Regulations which characterise the main element of the contract.