Supplies are tangible products that incorporate stocks, stores, equipment, materials and any other object that can be regarded as a physical presence. Supply contracts can be awarded through the full range of procurement procedures and through framework agreements. A framework agreement is reasonable, if there is a continuous demand for specific goods over the long term.
What is specific about supplies (as compared to services and works) is the ability to precisely describe the technical specification. For example, should a contracting authority need to replace a dated computer system then it is possible to specify the requirements of the new system in relation to required quantity, RAM capacity, design and capabilities, software and hardware features etc.
When specifying a supply tender it is important to distinguish between mandatory and optional specifications.
According to the EU Directives and consequently the National Law, it is important that no reference is made to any make or model of any supplies when tendering for a supply contract. The EU promotes the use of performance specifications.
Determining the value of public supply contracts
Where volumes and prices are known in advance then the value of the contract is the full amount a contracting authority will pay during the life of the contract. For example 100,000 items at 2 Euro each over a 12 month period gives a total contract value 200,000 Euro.
The simplest way for a contracting authority to calculate the value is to set a fixed term of no more than twelve months, the value will be assessed as the value of the contract during the contract period.
Table 2-31: How to calculate the value of a supply contract
For supply contracts that are awarded regularly or those that are being renewed within a specified period, the value shall be calculated either as
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If a contract involves leasing, rental and hire-purchase for an indefinite period it may not be a straight forward calculation. In this case the contracting authority needs to calculate what they expect to pay each month and multiply by 48 to arrive at a notional contract value.
No contract for a given quantity of supplies may be split up with the intention of avoiding application of the threshold value.
If the aggregated estimated value of a contract exceeds the threshold, each contract must be advertised in the OJEU, even if the estimated value of the individual contract is below the EU Thresholds. Several procurements of supplies of the same type that are to be made at the same time need to be regarded by the contracting authority as one single procurement for the calculation of the estimated value.