On 1 January 2008, revised thresholds for public procurement contracts came into force. There was also a new case from the European Court of Justice (ECJ) regarding the use of appropriate award criteria in public procurement exercises.
New thresholds – how low can they go?
On 1 January 2008, revised thresholds (which are used to determine whether the public procurement rules apply to the award of contracts by the public sector) came into force1.
The thresholds are revised every two years and in line with the current trend the thresholds have been lowered.
The threshold for the majority of public services and goods contracts has been lowered from £93,738 to £90,319 for central government bodies2 and from £144,371 to £139,893 for other contracting authorities. Meantime, the threshold for works contracts for all contracting authorities has been lowered from £3,611,319 to £3,497,313.
Although the thresholds have been lowered by relatively small amounts, it will mean that going forward even more contracts will be subject to the full ambit of the public procurement rules.
ECJ clarifies use of award criteria
On 24 January 2008, the ECJ ruled that a contracting authority is not permitted to use additional weighting factors and sub-criteria if these have not determined and communicated to bidders at an appropriate point in the procurement process. In this particular case, the weightings and sub-criteria were determined after the bids had been received and so, were found to be unlawful.
In addition, the ECJ found that a bidder's experience, manpower and equipment or their ability to perform the contract by the anticipated deadline are not lawful award criteria as they do not assist in determining whether a bidder has submitted the most economically advantageous tender or the lowest price.
Instead, the ECJ has taken the opportunity to reiterate that such criteria should only be incorporated as part of the qualitative aspect of the selection process. The assessment of whether bidders are suitably qualified and experienced will generally be carried out at the PQQ stage. The award criteria applied after the PQQ assessment to determine the lowest priced tender or most economically advantageous tender will only be applied to those bidders which have already demonstrated they have suitable qualifications and experience to perform the contract.
That said, the court did recognise that these two stages in evaluations could, in theory, take place at one stage in the procurement process.
Whilst this judgment is not a hugely surprising decision it does act as a useful reminder of the importance of ensuring that the criteria for awarding contracts are carefully considered at the start of the procurement process and communicated to bidders. It also reminds us of the necessary separation between the qualitative assessment and award criteria to determine who has submitted the most economically advantageous tender.
(1) the thresholds for the utilities procurement rules have also been amended. (2) which are listed in Schedule 1 to the Public Contracts (Scotland) Regulations 2006 and the Public Contracts Regulations 2006 and to all successor bodies