Which chapter of LOU should be applied?

The estimated and expected value of the contract and, as regards services, category of service, determines which chapter and award procedure shall apply to the procurement.

If the matter involves a procurement the value of which is estimated to be below the relevant threshold, the provisions contained in Chapter 15 of LOU shall be applied.

Services are divided into A- and B-Services

Services are divided into A- and B-Services because A-Services are deemed to be more appropriate for international competition whereas B-Services are often of such a nature that they are considered to be more difficult to gain any benefit from competition from foreign suppliers.

Award of contracts of B-Services shall be implemented in accordance with Chapter 15 of LOU, regardless of the value of the contract. If a procurement refers to a combination of products and services, the contracting authority shall comply with the rules that apply to the dominant type in terms of value. The same applies if a mix of A- and B-Services are involved.

Thresholds

Common rules for the entire Internal Market of the EU only apply to procurements that exceed certain economic values; these are referred to as ‘thresholds’. It is primarily here, in the case of major procurements in terms of value, that undertakings are expected to be interested in monitoring business opportunities and tender markets other than those of their home countries in order to possibly submit a tender.

Different provisions of the Act apply to procurement depending on whether the value is expected to be above or below the threshold.

When conducting a procurement, the contracting authority shall determine the value of the contract. The value of the contract is calculated excluding value added tax and for the entire term of the contract. Any possible options and renewal clauses are also included as if they were to be exercised. Prizes or remuneration that candidates or tenderers will be offered must also be included. The procurement may not be subdivided, and the calculation may not be structured, with a view to falling within the provisions on procurement below the threshold. Repeated procurements for the same category of products and services during a budget year must be counted together.

Related information