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Thresholds: Contracts of cross border interest

11 November 2008

When do Part B or below the threshold contacts have to be advertised? This is a topical issue, touched on in our Summer 2008 newsletter.

In July 2006, the Commission published its Guidance on this point. The European Court of Justice (ECJ) has also issued a steady flow of judgments on it over the past 12 months. The Guidance is the background to the thinking that now seems to be developing in the ECJ.

This year, in SECAP SpA v Comune Di Torino, the ECJ looked at the question of how to determine whether contracts were of cross border interest, and should therefore be advertised even if they were below the advertising thresholds in the Directives.

The answer is important, because unless a contracting authority is certain there will be no cross border interest, the case law, guidance and best practice suggests some form of advertising and tendering is required, and that getting quotes from a select list is not enough.

In a previous case called Coname, the ECJ said the monetary value of a contract was important when looking at potential cross border interest, particularly if it was likely to be a ‘very modest’ sum. In SECAP, the ECJ mentioned more criteria to assess cross border interest, namely:

This judgement means that it is probably more difficult for Contracting Authorities to rely exclusively on contract value in determining whether a contract is of cross border interest.

Lesson

Given the clarification issued by the ECJ, risk assessments should be carried out and the results placed with procurement files for Part B or below-threshold contracts to demonstrate how a contracting authority has reached its decision whether or not to advertise.

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