Earlier we looked at the procurement of priority services (Annex II A) and at non-priority services (Annex II B). What to do when the same public contract covers both?
These contracts are defined as mixed.
The Procurement Directive 2004/18/EC offers a simple rule, based on the value of the different services. If the value of the priority services is greater, the full procurement procedures apply.
If not, only the provisions concerning non-priority services have to be observed.
Article 22 Mixed contracts
Article 22 of the Procurement Directive 2004/18/EC, or the Classic Directive, lays down the rules concerning mixed contracts based on the value of priority and non-priority services:
Mixed contracts including services listed in Annex II A and services listed in Annex II B
Contracts which have as their object services listed both in Annex II A and in Annex II B shall be awarded in accordance with Articles 23 to 55 where the value of the services listed in Annex II A is greater than the value of the services listed in Annex II B. In other cases, contracts shall be awarded in accordance with Article 23 and Article 35(4).
UK reminder: Under single contract
In the United Kingdom the EU Procurement Directive was transposed through the Public Contracts Regulations 2006 (No. 5). For the sake of the clarifying words ‘under a single contract’ the text of Section 2(3), under Crown copyright, is reproduced here:
(3) Where services specified in both Parts A and B of Schedule 3 are to be provided under a single contract, then the contract shall be treated as—
(a) a Part A services contract if the value of the consideration attributable to the services specified in Part A is greater than that attributable to those specified in Part B; and
(b) a Part B services contract if the value of the consideration attributable to the services specified in Part B is equal to or greater than that attributable to those specified in Part A.
Reminder: EU threshold
The Finnish Act on Public Contracts (348/2007) is another example of national transposing legislation. Here the latter part of Section 21(1) reminds us that the EU contract values (thresholds) determine if the procurement procedures apply to a certain contract:
Chapter 4 — Application rules for various contract types
Section 21 — Application rules for public supply and service contracts, service concessions and public works contracts
(1) The provisions laid out in this Act shall be applied to public supply contracts, public service contracts referred to in Annex A and to works contracts above the EU threshold, as referred to in Section 16, subsection 1, paragraphs 1 or 2, with the exception of the provisions laid down in Chapter 9. The provisions of this Act shall be applied to the cases in which services referred to in Annex A are purchased together with services referred to in Annex B, insofar as the value of the services referred to in Annex A is greater than the value of the services referred to in Annex B and the total value of such a service contract exceeds the value of the EU threshold.
Don’t get mixed up
Article 22 concerns mixed services contracts, including both priority and non-priority services. The contract should form a logical whole, without artificial bundling of unrelated non-priority services to avoid the rigours of the full tendering procedure.
But the term mixed contracts is used for other mixtures as well. Different components of services, works and supplies are possible and they follow their own rules. Just as an example of other mixes, here is an excerpt from the Office of Government Commerce (OGC) EU procurement guidance: Introduction to the EU procurement rules (March 2008; page 5):
8. Mixed contracts
Although the public sector Regulations have been consolidated, some differences in treatment remain for supplies, services and works contracts. Usually it will be clear how to categorise a requirement from its subject matter but there are occasions when contracts contain elements of both supplies and services, for example. In those cases:
• Where a contract covers both services and supplies, the classification should be determined by the respective values of the two elements.
• Where it covers works/supplies or works/services, it should be classified according to its predominant purpose.
• Where a contract provides for the supply of equipment and an operator it should be regarded as a services contract.
• Contracts for software are considered to be for supplies unless they have to be tailored to the purchaser’s specification, in which case they are services.
If priority services constitute the greater part a mixed public services contract reaching the EU threshold, without artificial devices, the procurement procedures apply in full.