Aggregation of requirements. What is it and what are the rules?

Of all the procurement rules, those on aggregation cause the most confusion. In this briefing we address some of the issues that cause confusion.

What is aggregation?

When thinking about a procurement, and whether it is above threshold, you need to consider not only the immediate requirement, but also your aggregated requirement, for ‘similar’ contracts. You must assess your requirements over a rolling 12-month period and, if the total requirement exceeds the OJEU threshold, you’ll need to treat each and every procurement for that requirement as above threshold.

Let’s assume you need to buy three endoscopes for £15k each. That’s only £45k, well under the threshold. But let’s assume you need a dozen more in the next 12 months. You now have an aggregated requirement of £225k – well above the threshold. So, to acquire the three endoscopes you need now, you must run a full OJEU procedure as your aggregated demand requires it.

How do I decide if my requirements are ‘similar’?

The Regulations mainly focus on what you can’t do, such as designing a procurement with the intention of circumnavigating the rules. However, you have some latitude in how you decide which contracts are ‘similar’. Most important is that you detail the basis on which you have assessed aggregation in your compulsory Regulation 84 report. We are shortly about to launch a free Regulation 84 compliance wizard in partnership with Mills & Reeve LLP. Click here to sign up.

Do I have to advertise the entire requirement at once?

No. You only need to aggregate for the purposes of assessing the contract value – and whether the requirement should be treated as above threshold. You do not have to advertise, or procure, your entire aggregated requirement at one time.

Can we get around this by using Lots?

All similar and regular contracts must be aggregated. So, splitting the requirements into Lots will not remove the need to treat your requirement as above threshold. You are not allowed to circumvent the rules simply by splitting into Lots. However, Regulation 6(14) to 6(15) outlines the circumstances in which an individual Lot can be made exempt:

  • For Supplies or Services, the value of the individual Lot concerned is less than €80,000;
  • For Works, the value of the individual Lot concerned is less than €1 million;
  • The total value of the Lot or Lots to be excluded does not exceed 20% of the total aggregated value

When do I need to assess the possibility of aggregation?

You need to assess aggregation every time you procure something. If, over the next 12 months you can see additional demand for a ‘similar’ contract, you must include it. It isn’t possible to assess aggregation annually at the beginning of the year – you must do it at the point of procuring each element of your requirement.

Does aggregation apply to framework call-offs?

Yes. The method of procurement doesn’t affect aggregation. Whatever procurement approach you adopt must consider the issue of aggregation.

N.B. While this briefing addresses the key issues, the specific requirements are detailed. See the full Regulation 6 at http://www.legislation.gov.uk/uksi/2015/102/regulation/6/made.

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