Regulation 78 – Scope of Section 8

Commentary

Regulation 78 PCR2015 defines the scope of application of the rules governing design contests, and transposes Article 78 of Directive 2014/24/EU word by word. Design contests are becoming ever more popular for the development of innovative solutions like the ones run by CityMart on the behalf of many European cities. It may be worth reminding that design contests are defined in Regulation 2(1) PCR2015 as those procedures which enable a contracting authority to acquire, mainly in the fields of town and country planning, architecture and engineering or data processing, a plan or design selected by a jury after being put out to competition with or without the award of prizes.

According to Regulation 78(1) PCR2015, the rules on design contests apply to two types of contests: (a) design contests organised as part of a procedure leading to the award of a public service contract ie design contests leading to an award; and (b) design contests with prizes or payments to participants ie self-standing design contests or design contests leading to negotiations.

The regulation then goes on to establish the method for the calculation of the value of these contests for the purposes of determining the obligation to comply with EU rules for their tender. Regarding design contests leading to an award of a public service contract (Regulation.78(1)(a)), the value threshold mentioned in Regulation 5 PCR2015 shall be calculated on the basis of the estimated value net of VAT of the public service contract, including any possible prizes or payments to participants (Regulation 78(2)). In turn, the case of self-standing design contests (Regulation 78(1)(b)), the threshold mentioned in Regulation 5 PCR2015 shall be calculated on the basis of the total amount of the prizes and payments Regulation 78(2)).

However, where the design contest can be used for the award of a subsequent public services contract on the basis of negotiations entered into with the winner(s) of the design contest because the contracting authority has announced its intention to award such a contract in the contest notice in accordance with Regulation 32(7) and (8) PCR2015, its estimated value shall be calculated including the estimated value net of VAT of the public services contract which might subsequently be concluded following a negotiated procedure without prior publication.

The general criterion is, quite clearly, that the estimated value of the design contest must include the estimated value of any follow-up public services contracts derived from the contest. One may wonder why a design contest cannot be used to award public works contracts, but that is sorted out by the definition of public works contracts, which covers both design and execution phases. Consequently, where the potential follow up of a design contest is a public works contract, the contracting authority needs to either tender it as a public works contract or decouple the design contest from the award of the public works contract for its execution, and subject each to their own rules–which may trigger particular instances of application of Regulation 41 PCR2015 if the original “designer” bids for the construction of the public works, either directly or through undertakings related to them.

Last modified: December 5, 2016 by Pedro Telles

78.—(1) This Section applies to—

(a)design contests organised as part of a procedure leading to the award of a public service contract;

(b)design contests with prizes or payments to participants.

(2) In the cases referred to in paragraph (1)(a), the threshold mentioned in regulation 5 shall be calculated on the basis of the estimated value net of VAT of the public service contract, including any possible prizes or payments to participants.

(3) In the cases referred to in paragraph (1)(b), the threshold mentioned in regulation 5 shall be calculated on the basis of the total amount of the prizes and payments, including the estimated value net of VAT of the public services contract which might subsequently be concluded following a negotiated procedure without prior publication in accordance with regulation 32(7) and (8) if the contracting authority has announced its intention to award such a contract in the contest notice.