EC set to demand ads for contracts above £14,400

7 June 2006
More legal news

08 June 2006 | Rebecca Ellinor

Public-sector contract awards could be challenged or their cancellation ordered by the European Court of Justice (ECJ) if buyers fail to advertise work above £14,400.

Guidance on the issue is yet to be published by the European Commission (EC). But a copy of an unpublished draft document obtained by SM indicates the EC will not begin proceedings unless a contract's value exceeds 10 per cent of the EC procurement directives' "threshold values". That would mean UK-based organisations may have to consider advertising deals worth £14,400 or above.

While procurement professionals await official advice, cases have been referred to the ECJ from Finland, Ireland, Germany and the Netherlands. Experts believe buyers in the UK ignore the law at their peril.

Non-adherence of the guidance would allow the ECJ to order a member state to rescind a contract award and impose a fine on the government in question.

Tim Williams, managing director of HR consultants Millstream Associates, told SM: "I've seen between 150 and 200 local authorities in the past few weeks and knowledge of the requirement is very much the exception rather than the rule."

Current cases before the court follow the Telaustria judgment in 2000, when the court decided its failure to advertise the work under public procurement rules was a breach of the fundamental principles of the EC treaty of transparency and non-discrimination on grounds of nationality.

Peter Howarth, chief executive of the Society of Procurement Officers in Local Government (SOPO) and managing director of training firm SBV, said: "People take risks by not complying with the treaty.

"Wouldn't it be good practice to advertise to ensure you're getting the best in the marketplace? Why is it arduous when they can just put something on the web?"

But David Pointon, SOPO chairman and head of procurement at Portsmouth City Council, said: "If you advertise and 10,000 people say they can do the work it's totally impractical.

"In the absence of any guidance, to apply this rule across the spectrum makes no practical sense. It is our responsibility to ensure taxpayers' money is spent wisely."

SMjun2006

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