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Crown Commercial Service issues guidance on public-public contracts

The Government has issued guidance covering the provisions for contracts between one public body and another, also known as ‘public-public contracts’.

The guidance, which can be viewed here, explains new provisions in the Public Procurement Regulations on such contracts. Some of these contracts are subject to the EU procurement rules, whereas others are excluded.

The guidance covers:

  • Overview: what is covered in the guidance; what has changed; which rules need to be referred to;
  • Key points: Regulation 12 of the Public Contracts Regulations sets out various tests to determine whether a public-public contract is excluded from the rules. This includes the cumulative conditions for the ‘vertical’ exclusion to be met – Regulation 12(1)) – and the cumulative conditions for the ‘horizontal’ exclusion to be met – Regulation 12(7). Regulations 12(4 - 6) meanshile set out the conditions where a contracting authority may award a public contract directly to a supplying authority/organisation over which it exercises control jointly with other contracting authorities, even though it does not exercise control over the supplying authority/organisation individually. Regulation 12(2) makes clear that a contracting authority may make use of the exemption where it awards a contract to its controlling contracting authority or to another legal person controlled by the same contracting authority;
  • Frequently asked questions: what constitutes ‘control’ of an organisation; how do I calculate the percentages of activities; can we rely on an exemption where some of the funding is provided through private capital? does the ‘Cooperation’ between contracting authorities imply a particular legal form?
  • Annex A Regulation 12 Public Contract Regulations 2015.

According to the Crown Commercial Service, the new provisions on public-public contracts “aim to codify, clarify and develop the case law on whether contracts between public bodies should be subject to the public procurement rules.

“Interpretation of the EU case law of the European Court has varied, so leaving uncertainty as to whether, for instance, shared services arrangements between public bodies were excluded or not.”