Contracts subsidised by contracting authorities under Reg.13 Public Contracts Regulations 2015

Reg.13 of the Public Contracts Regulations 2015 (PCR2015) establishes coverage rules for contracts subsidised by contracting authorities, which are identical to those of Art 13 of Directive 2014/24

The rules are straightforward (however, see Pedro's comments) and intend to catch works contracts and services contracts connected to those works when a contracting authority subsidises them by more than 50%, provided: i) their value is above the relevant thresholds (again, including a direct reference to the values in Dir 2014/24, which creates the same issues discussed in relation to reg.5 PCR2015 here and here), and ii) the works involve civil engineering activities as listed in Schedule 2 PCR2015, or building work for hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes.

The rule that deserves some comment refers to the responsibility of the financing contracting authorities, which "shall ensure compliance" with Part 2 of the PCR2015 (and Dir 2014/24) "where they do not themselves award the subsidised contract or where they award that contract for and on behalf of other entities". 

This provision has been strengthened from its previous wording in Art 8 Dir 2004/18 ("Member States shall take the necessary measures to ensure that the contracting authorities awarding such subsidies ensure", which set a sort of two-tier compliance responsibility that made it rather diffuse, under a sort of "best effort" approach) and now seems to place a much more direct and objective responsibility on funding contracting authorities to ensure compliance with the public procurement rules. 

The issue of liability for lack of compliance with procurement rules in one that is bound to trigger litigation and interpretative difficulties, particularly as cooperative procurement is involved (see comments to regs.37 ff PCR2015 in due course). Hence, it is important to stress that funders of works covered by reg.13 PCR2015 (if they themselves are contracting authorities) retain liability for infringement of the procurement rules, which may well incentivise them to tender the contract directly.

(c) NotFromUtrecht University of Leicester, View of Campus Towers.