LexisPSL Public Law in partnership with Walker Morris explain the new process for concession contracts procurement by contracting authorities and utilities under the Concession Contracts Regulations 2016, SI 2016/273.
Application of the Concession Contracts Regulations 2016
The Concession Contracts Regulations 2016, SI 2016/273 (CCR 2016) came into force on 18 April 2016, implementing Directive 2014/23/EU (the Concessions Directive) in England, Wales and Northern Ireland. The CCR 2016 regulate the process for concession contracts procurement by contracting authorities and utilities. The CCR 2016 do not apply to procurements started prior to 18 April 2016.
The CCR 2016 replace the provisions in the Public Contracts Regulations 2006, SI 2006/5 for public works concession contracts. They bring to an end the exemption for service concession contracts which had been granted by Public Contracts Regulations 2006, reg 36 and for both works and service concession contracts under the Utilities Contracts Regulations 2006
The CCR 2016 apply to the procurement of concession contracts by procuring bodies that are either:
- contracting authorities—defined as: 'State, regional or local authorities (including the Crown but not including Her Majesty in her private capacity), bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law other than those authorities, bodies or associations which pursue one of the activities listed in CCR 2016, SI 2016/273, Sch 2 and award a concession contract for the pursuit of one of those activities', or
- utilities (procuring concessions for prescribed activities)—defined as: 'entities which pursue one of the activities listed in Schedule 2 and award a concession contract for the pursuit of one of those activities, and which are one of the following—(a) State, regional or local authorities (including the Crown but not including Her Majesty in her private capacity), bodies governed by public law or associations formed by one or more such authorities or one or more such bodies governed by public law; (b) public undertakings; (c) any other entities which operate on the basis of special rights or exclusive rights, granted for the exercise of one of the activities listed in Schedule 2 [unless granted special or exclusive rights by means of a procedure in which 'adequate publicity' has been ensured and where the granting of those rights was based on objective criteria]'
See CCR 2016, SI 2016/273, regs 4–5 for more details.
This article provides an overview of the public procurement regime for concession contracts under the CCR 2016. For background reading and associated government guidance, see generally: Crown Commercial Service—Guidance: Public procurement policy, and in particular: Crown Commercial Service—Handbook for the Concession Contracts Regualtions 2016.
What is a concession contract?
A concession contract for the purpose of the CCR 2016 is a contract for pecuniary interest concluded in writing by one or more contracting authorities or utilities for the execution of works or the provision and the management of services by the contractor (referred to as the 'concessionaire').
Two key factors distinguish concessions from a normal works or services contracts
- consideration must consist either solely in the right to exploit the services (ie to make money from third parties) or in that right together with payment from the procuring body
- the contract must transfer to the contractor the operating risk (encompassing demand or supply risk or both); plus real exposure to the vagaries of the market
Types of contract
There are two types of concession contract:
- works concession contract—ie for the execution, or design and execution, of works (further defined in CCR 2016, SI 2016/273, Sch 1), and
- services concession contract—ie for the provision and management of services (other than the execution of works)
There is no concession contract for supplies.
Thresholds, value and term
The CCR 2016 apply to procurements where the value of the concession is estimated to be above the relevant threshold which is set at EU level. The current threshold is £4.104,394. This threshold applies whether the concession is for works or services.
For further reading on EU thresholds, see Practice Note: EU procurement thresholds.
The primary factor in calculating the value of a concession contract is the estimated total turnover to be generated the life of the concession contract for the works and services. This should take into account where applicable:
- payments from the users of the works or services other than those collected on behalf of the procuring body
- payments or other financial advantages from the procuring body or any other public authority
- grants or other financial advantages, from third parties for the performance of the concession contract
- revenue from sales of any assets which are part of the concession contract
- supplies and services made available to the contractor by the procuring body, provided that they are necessary for executing the works or providing the services
- any prizes or payments to candidates or tenderers
The objective methodology used to calculate the value must be set out in the concession documents.
The estimate is to be made at the time at which the concession notice is sent for publication in the Official Journal of the European Union (OJEU) or, in cases where such notice is not required, at the moment at which the procuring body commences the procurement, for example by contacting economic operators in relation to the concession contract.
It is important to note that the CCR 2016 provide that the estimate must be checked at the time of the contract award. If it is more than 20% higher than the original estimate the recalculated estimate will apply. This could be of particular significance if the original estimate was not advertised by way of a concession notice eg because it was beneath the applicable threshold. If the revised estimate is above 20% more than the original and brings the value above the threshold, the procuring body may need to advertise rather than continue with the award.
There are restrictions on the duration of a concession contract. It cannot be of unlimited duration and if the duration exceeds 5 years the maximum duration must not exceed the time that the contractor could reasonably be expected to take to recoup the investments made.
In parallel with the requirements under the previous regime for concessions, the procuring body may reserve the right to bid for a concession contract to sheltered workshops and economic operators whose main aim is the social and professional integration of disabled or disadvantaged persons, or to provide for such concession contracts to be performed in the context of sheltered employment programmes.
The concession requires a concession notice in the OJEU, which must refer to the reservation being applied, but the procuring body may then limit participation in the process for the purpose of further social and professional integration of disabled or disadvantaged persons.
Research and development
Also in parallel with the previous regime for concessions, exemption is given for certain research and development services identified by Common Procurement Vocabulary (CPV) code:
- 73000000-2 Research and development services and related consultancy services
- 73100000-3 Research and experimental development services
- 73110000-6 Research services
- 73111000-3 Research laboratory services
- 73112000-0 Marine research services
- 73120000-9 Experimental development services
- 73300000-5 Design and execution of research and development
- 73420000-2 Pre-feasibility study and technological demonstration
- 73430000-5 Test and evaluation
The CCR 2016 do not apply to concession contracts for such services unless the benefits accrue exclusively to the procuring body for its use in the conduct of its own affairs; and the service is wholly remunerated by the procuring body.
Also mirroring the provisions in the previous regime for concessions, provision is made for a light touch regime for contracts for certain specified social and other specific services. For those services the only obligation on the procuring body is to comply with CCR 2016 regs 24(2),31(3) to (5), 32 and 46 to 64.
Frameworks and Dynamic Purchasing Systems
A significant difference from the previous regime for concessions is that the CCR 2016 make no provision for Framework Agreements. Accordingly every concession valued above the applicable threshold must be separately procured and, in particular, advertised by a concession notice. Similarly no provision is made to set up and award concession contracts under a Dynamic Purchasing System. For a comparative explanation of these arrangements under the Public Contracts Regulations 2015, SI 2015/102 (PCR 2015), see Practice Note: Framework agreements and dynamic purchasing systems.
Affiliates, joint ventures and public cooperation
Exemption from the CCR 2016 is provided for in a number of circumstances where a concession contract is to be awarded to a related body or where it is a matter of co-operation between public bodies. Some apply to only utilities, others to both contracting authorities and utilities.
Concession contracts awarded to an affiliated undertaking
Firstly, the CCR 2016 exempt concession contracts awarded by a utility to an affiliated undertaking in certain circumstances. The exemption also applies to a joint venture between a number of undertakings in respect of a concession contract awarded to an affiliated undertaking of one of the member utilities. For this purpose the an 'affiliated undertaking' is one whose annual accounts are consolidated with those of the procuring utility in accordance with the requirements of Directive 2013/34/EU, or for an undertaking not subject to that Directive, any undertaking that:
- may be, directly or indirectly, subject to a dominant influence by the procuring utility
- may exercise a dominant influence over the procuring utility, or
- in common with the procuring utility, is subject to the dominant influence of another undertaking by virtue of ownership, financial participation, or the rules which govern it
For the exemption to apply, at least 80% of the average total turnover of the affiliated undertaking over the preceding three years must derive from the provision of services or works (as the case may be) to the procuring utility or one or more of its affiliated undertakings, taking into account:
- all services provided by it where the concession contemplated is a services concession
- all works provided by it where the concession contemplated is a works concession
If the procuring utility has more than one affiliated undertaking which provides the same or similar services or works (as the case may be), the percentages are calculated by reference to the cumulative turnover of those undertakings.
Concession contracts awarded to a joint venture or to a utility forming part of a joint venture
A further exemption applies to concession contracts awarded by a joint venture formed exclusively by a number of utilities for the purpose of carrying out the activities specified in CCR 2016, SI 2016/273, Sch 2, or by a utility to such a joint venture (that it is a part of). The only condition which applies in this case is that the joint venture has been set up to carry out the relevant activity for a period of at least three years and that constituent utilities are members of the joint venture for at least three years under the governing instrument.
Activities which are directly exposed to competition
A third exemption applicable only to contracts awarded by utilities is for activities directly exposed to competition in accordance with Utilities Contracts Regulations 2016, SI 2016/274, reg 34(2).
Concession contracts between entities within the public sector
Other exemptions apply to contracting authorities, including contracting authorities acting as utilities, in parallel with the exemptions in the PCR 2015. Such a body may award a contract without having to comply with the requirements of the CCR 2016 where all of the following apply:
- it exercises over the contractor concerned control similar to that which it exercises over its own departments
- more than 80% of the activities of the contractor are carried out in the performance of tasks entrusted to it by the contracting authority or other bodies controlled by it, and
- there is no direct private capital participation in the contractor (although this may not apply in certain circumstances where the participation is required by law)
Such a controlled body can also award a contract to its controlling body or to another body controlled by the controlling body without procurement under the CCR 2016, reg 17(2) provided again there is an absence of private capital.
The exemption is also extended to contracts awarded to a body controlled jointly by more than one contracting authority (CCR 2016 reg 17(4)) subject to the conditions that:
- they exercise joint control over the body similar to that which they exercise over their own departments. This requires that the decision-making bodies of the body are composed of representatives of all participating authorities and that they are able to jointly exert decisive influence over its strategic objectives and significant decisions; and that the body does not pursue any interests which are contrary to those of the controlling authorities
- more than 80% of the activities of the body are carried out in the performance of tasks entrusted to it by the controlling authorities and related bodies, and
- there is no direct private capital participation (except as required by law)
Finally, the CCR 2016 provide an exemption for concession contracts concluded exclusively between two or more contracting authorities exercising joint control where all of the following conditions are fulfilled:
- the contract establishes or implements a cooperation between the participating authorities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common
- the implementation of that cooperation is governed solely by considerations relating to the public interest, and
- the participating contracting authorities perform on the open market less than 20% of the activities concerned by the cooperation
A major difference from procurement of a standard works or services contract is that in procuring a concession contract the procuring body is not confined to using the prescribed procedures: open, restricted, competitive procedure with negotiation, competitive dialogue and innovation partnership. CCR 2015, SI 2016/273, reg 30 gives the procuring body freedom to choose how to organise the procedure subject to compliance with certain key principles and requirements.
Publication of a concession notice
The procuring body must publish a concession notice (or a Prior Information Notice (PIN) in the case of social and other specific services under CCR 2016, SI 2016/273, Sch 3) in the OJEU, using the correct standard form, in order to commence the procurement process. The only exceptions to this are:
- where in response to a previously published notice there were no acceptable tenders, or
- where there is only one entity capable providing the works or services because: (i) the aim of the concession contract is the creation or acquisition of a unique work of art or artistic performance; (ii) competition is absent for technical reasons; (iii) there exists an exclusive right (as defined in the CCR 2016, reg 2); or (iv) the protection of intellectual property rights and exclusive rights (other than as defined in the CCR 2016, SI 2016/273, reg 2)
The notice must contain the information required in the Concessions Directive (see Directive 2014/23/EU Annex V for concessions notices and Directive 2014/23/EU Annex VI for PINs) and be sent for publication in accordance with CCR 2016, SI 2016/273, reg 33.
Standard form notices
Notices required under the CCR 2016 must be send for publication in the OJEU. This is done electronically via an online database known as Tenders Electronic Daily (TED). Notices must follow the correct prescribed template which can be found under: Standard forms for public procurement (SIMAP).
Commission Implementing Regulation (EU) 2015/1986 of 11 November 2015 introduced new standard form notices for the purpose of publication in the OJEU. The Regulation came into force in December 2015, repealing Implementing Regulation (EU) 2011/842 (with full effect from 18 April 2016). The Regulation provides standard forms to be used for the notices required by the CCR 2016 and this requirement is incorporated into the CCR 2016, SI 2016/273, reg 33(1).
For guidance from the Crown Commercial Service, see: Procurement Policy Note 17/15: Availability of Standard EU Forms and Notices for Public Procurement.
Electronic availability of concession documents
The procuring body must normally make all concession documents available electronically free of charge via the internet from the date of publication of the concession notice, or the date of the invitation to tender if later. For this purpose, 'concession document' is broadly defined as:
'any document produced or referred to by the contracting authority or utility to describe or determine elements of the concession contract or the concession contract award procedure, including the concession notice, the technical and functional requirements, proposed conditions of concession contract, formats for the presentation of documents by candidates and tenderers, information on generally applicable obligations and any additional documents'
Combating corruption and preventing conflicts of interest
Procuring bodies are required to take appropriate measures to 'combat fraud, favouritism and corruption' and to 'effectively prevent, identify and remedy conflicts of interest' arising in the conduct of a concession contract award procedure. Such measures should not to go beyond what is strictly necessary to prevent a potential conflict of interest or eliminate an identified conflict of interest.
For this purpose, the concept of a 'conflict of interest' is defined to include (at least):
'any situation where relevant staff members have, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the concession contract award procedure'
In relation to the above, 'relevant staff members' means staff of the contracting authority or utility who are either involved in, or may influence the outcome of, the concession contract award procedure.
Time limits for receipt of applications and tenders
In general, time limits for the receipt of tenders or applications must take account of the complexity of the concession contract and the time required for drawing up tenders or applications.
The prescribed minimum time limit for the receipt of applications (whether or not including tenders for the concession contract) is 30 days from the date on which the concession notice was sent for publication in the OJEU.
Where the contract award procedure takes place in successive stages, the minimum time limit for the receipt of initial tenders is 22 days from the date on which the invitation to tender is sent.
Longer time limits should be provided where the preparation of tenders or applications requires a site visit or inspection of supporting documentation (in addition to the concession documents) and the time limits for the receipt of tenders or applications should be fixed in order to allow all economic operators to be made aware of the information required to produce a tender or application.
Time limits for receipt of tenders may be reduced by five days where submission by electronic means is allowed.
Concession Contracts Regulations 2016, SI 2016/273, reg 29
Mandatory and discretionary exclusion
The provisions governing mandatory and discretionary exclusion of bidders are set out in CCR 2016, SI 2016/263, reg 38.
For procuring bodies which are contracting authorities and for certain utilities, standard mandatory grounds of exclusion apply, similar to those under the PCR 2015. CCR 2016, SI 2016/273, reg 38 sets out the grounds on which an economic operator will normally be treated as ineligible to participate in a procurement process under the CCR 2016. Under reg 2, ‘economic operator’ means:
'any person or public entity or group of such persons and entities, including any temporary association of undertakings, which offers the execution of works or a work, the supply of products or the provision of services on the market'
The discretionary grounds for exclusion contained in CCR 2016, SI 2016/273, reg 38 allow contracting authorities and utilities to exclude an economic operator from a procurement exercise in certain situations.
It is important to identify which grounds of exclusion apply for each type of procuring body. Time limits for exclusion and requirements to consider self cleansing also apply.
For related reading on mandatory and discretionary grounds of exclusion under the PCR 2015, see Practice Note: Eligibility and selection in public procurement—exclusion criteria.
Conditions for participation
The procuring body may set conditions for participation relating to the bidder's professional and technical ability and financial and economic standing. Any such conditions must be:
- proportionate to the subject-matter of the concession contract, and
- related and proportionate to the need to ensure the ability of the contractor to perform the concession contract
taking into account the relevant subject-matter and the purpose of ensuring genuine competition.
An economic operator may rely on the capacities of other entities to enable it to meet the relevant requirements, provided that it proves to the procuring body that it will have the necessary resources at its disposal, for example by producing commitments to that effect. With regard to financial standing, the procuring body may require joint liability for the execution of the contract.
The procuring body may clarify in the concession documents how groups of economic operators are to meet the requirements as to economic and financial standing or technical and professional ability provided that this is justified by objective reasons and is proportionate.
Information about the procedure and modification
The procuring body must invite a sufficient number of tenderers or candidates to ensure 'genuine competition. It must provide all participants with a description of the envisaged contract award procedure and an indicative completion deadline. The procuring body must record the stages of the procedure using appropriate means. It may modify the procedure or deadline but must inform all participants of the modification. To the extent that a modification involves changes to anything set out in the concession notice the procuring body must advertise it to all economic operators.
The procuring body may hold negotiations with candidates and tenderers but must not change the subject-matter of the concession contract, the award criteria or the minimum requirements.
Award of a concession contract is to be made on the basis of objective criteria to identify an overall economic advantage for the procuring body. The procuring body must comply with the principles of equal treatment, non-discrimination and transparency and ensure that tenders are assessed in conditions of effective competition.
Award criteria must be linked to the subject-matter of the concession contract and must not confer an unrestricted freedom of choice on the procuring body. The criteria must be accompanied by requirements which allow the information provided by tenderers to be effectively verified. The procuring body must verify whether tenders properly meet the award criteria.
The criteria should be listed in descending order of importance and may include for instance: environmental criteria, social criteria, or criteria related to innovation. Where a tender proposes an innovative solution with an exceptional level of functional performance which could not have been foreseen by a diligent procuring body, the procuring body may, exceptionally, modify the ranking order of the award criteria to take into account that innovative solution provided it ensures that the modification does not result in discrimination.
The procuring body must inform all tenderers of such modification of the order of importance and issue a new invitation to submit tenders, respecting the minimum time limit for the receipt of tenders and if the award criteria had been published in, or at the same time as, the concession notice, it must publish a new concession notice, having regard to the minimum time limit for the receipt of applications.
Concession contracts are to be awarded on the basis of the award criteria. The procuring body must also ensure that all of the following conditions are fulfilled:
- the tender complies with any minimum requirements set by the contracting authority or utility
- the tenderer complies with the conditions for participation, and
- the tenderer ought not to be excluded from participating in the procedure
Informing candidates and tenderers
Each candidate and tenderer must be informed as soon as possible of decisions regarding the award of a concession contract, including:
- the name of the successful tenderer, and
- the grounds for any decision to reject its application or tender, or
- the grounds for any decision not to award a contract, or
- the grounds for any decision to recommence the procedure
If requested, the procuring body must, as quickly as possible and in any event within 15 days from receipt of a request in writing, inform any tenderers that have submitted an admissible tender of the characteristics and relative advantages of the winning tender.
Certain information may be withheld where to release it would:
- impede law enforcement
- prejudice the legitimate commercial interests of an economic operator
- possibly prejudice fair competition between economic operators
or would otherwise be contrary to the public interest.
The procuring body must send a concession award notice for publication not later than 48 days after the award of a concession contract. Concession award notices must contain the information required in the Concessions Directive (see Directive 2014/23/EU Annex VII and Annex VIII).
The CCR 2016 require a standstill process in the same way as required under the PCR 2015.
Notices of decisions to award a concession contract
The procuring body must send to each candidate and tenderer a notice communicating its decision to award the concession contract containing:
- the award criteria
- the reasons for the decision, including the characteristics and relative advantages of the successful tender
- the score (if any) obtained by the recipient or the reason why the procuring body believes it did not meet the technical and functional requirements in an equivalent manner
- the score of the winning tenderer
- the name of the winning tenderer, and
- details of the standstill period
A notice sent to a candidate who had not been invited to tender must include the reasons why the candidate was unsuccessful but need not include the relative advantages of the successful tender.
Again, certain information may be withheld where to release it would impeded law enforcement, prejudice legitimate commercial interests or fair competition, or would otherwise be contrary to the public interest
At the conclusion of the tendering process, the CCR 2016 impose a standstill period between the procuring body making its decision and entering into a contract with the successful bidder. Where the procuring body is required to issue notices of its decision under CCR 2016, SI 2016/273, reg 47 (this may not be required for instance where the winning bidder is the only tenderer and there are no candidates), it must not enter into the concession contract before the end of the standstill period. The minimum standstill periods are similar to those under PCR 2015:
- where the notice is sent by fax or email, ten days, ending at midnight at the end of the tenth day after the date on which the procuring body sends the notice
- where the notice is sent by other means, the earlier of:
- midnight at the end of the 15th day after the date of sending the last notice
- midnight at the end of the tenth day after the date on which the last tenderer received the notice
Where the procuring body uses a mix of electronic and other means for sending the notice to the relevant economic operators, the standstill period ends at whichever of the following two times occurs latest:
- midnight at the end of the tenth day after the date on which the procuring body sends the last notice by fax or electronic means
- the time when whichever of the following occurs first:
- midnight at the end of the 15th day after the date of sending the last notice by other means
- midnight at the end of the tenth day after the date on which the last tenderer received a notice sent by other means
Challenging an award and automatic suspension
In parallel with the procedures under the PCR 2015, where the procuring body is in breach of the CCR 2016, an economic operator may bring proceedings in the High Court. It will need to show that it suffers, or risks suffering, loss or damage as a result of a failure to comply with the CCR 2016 and must bring proceedings within the relevant time limit.
Time limits for challenge
Challenge proceedings must normally be commenced, by the issue of a claim form within 30 days of the date on which the economic operator 'first knew or ought to have known' that the grounds for making the claim had arisen.
Where the proceedings relate to a decision notified to the economic operator, the time limit will be extended, if necessary to the end of a period which is measured from the day on which the decision notice was sent to the economic operator, or if later, from the day on which the reasons for the decision were received.
The precise time limit will depend on the method of sending the notice and whether reasons for the decision are included. The court also has discretion to extend the period to take it to a maximum of three months.
Special time limits apply where a challenge is brought on grounds of ineffectiveness (see below).
Grounds of ineffectiveness
There are two grounds of ineffectiveness for a concession contract:
- failure to publish a concession notice in the OJEU where required
- failure to comply with any of the standstill requirements depriving the economic operator of the opportunity to challenge before the contract was entered into
Where there are grounds of ineffectiveness, the time limit is six months from the day on which the concession was entered into. However this can be shortened to a period of 30 days from the date on which the procuring body publishes a contract award notice (where the ground of ineffectiveness is failure to publish a concession notice), or where it informs an economic operator of its decision and the reasons for it, for that operator, 30 days from the date on which it is informed.
Where the concession contract has not been entered into at the time proceedings are commenced the procuring body must refrain from doing so (ie automatic suspension). This restriction will remain in place until either the court lifts the suspension (which the procuring body can apply for) or the proceedings are discontinued or determined.
Remedies where the contract has not been entered into
Where the court finds that there has been a relevant breach of the CCR 2016 and the contract has not been entered into, the court has powers to:
- set aside the decision or action concerned (including the decision as to who to award the contract to)
- order the amendment of any document
- award damages
Where the court is satisfied that the economic operator would have had a real chance of being awarded the contract but for a breach by a procuring utility of its duties to economic operators under CCR 2016, SI 2016/273, reg 50 or reg 51, the economic operator is entitled to damages to cover the cost of preparing its tender and participating in the procedure leading to the award of the contract.
Remedies where the contract has been entered into
If the concession contract has already been entered into, the court has the following powers and duties:
- If grounds of ineffectiveness apply, the court must normally make a declaration of ineffectiveness setting the contract aside (unless CCR 2016, SI 2016/273, reg 61 requires the court not to do so on public interest grounds), and:
- may make orders dealing with consequential issues including compensation to the economic operator that was party to the contract
- must impose a civil financial penalty on the procuring body
- must not order any other remedy
The CCR 2016 preclude the court from making a declaration of ineffectiveness if:
- the procuring body or another party to the proceedings raises an issue concerning overriding reasons relating to a general interest which require the concession contract to be maintained, and
- the court is satisfied that is the case
Economic interests relating to the concession contract may be considered as overriding reasons only in exceptional circumstances. If a declaration of ineffectiveness would lead to disproportionate consequences and economic interests directly linked to the concession such as costs resulting from a delay in execution, a new procurement procedure, or a change in contractor cannot amount to overriding reasons.
Other remedies and consequences of ineffectiveness
Where the court is satisfied that either of the grounds for ineffectiveness applies but is precluded from making declaration of ineffectiveness, the court must order at least one, and may order both, of the following:
- that the duration of the concession contract is shortened
- that the procuring body pay a civil financial penalty
That choice of remedies is also available in any proceedings where the Court is satisfied that the concession contract has been entered into in breach of any requirement imposed by CCR 2016, SI 2016/273, regs 48, 56 or 57(1)(b), and does not make a declaration of ineffectiveness (whether because none was sought or because the Court is not satisfied that either of the grounds for ineffectiveness applies).
In all cases the court may award damages to an economic operator that has suffered loss or damage as result of a breach by the procuring body.
Subcontracts, modification and termination
In addition to being given a power to require bidders to inform the procuring body of the proposed share of any concession contract to be subcontracted, procuring bodies must, for all works concession contracts and service concessions involving services provided at a facility under the oversight of the procuring body, require the contractor to notify it of the details (including the names, contact details and legal representatives) of its subcontractors, and to keep it informed of changes. This requirement is optional for procuring bodies entering concession contracts in respect of other services. For instance, the procuring body may require the same information for services concessions provided at a facility not under its oversight.
The procuring body is also given power to extend the obligation to secure details of subcontractors to suppliers or subcontractors involved in works concession contracts or services concession contracts further down the chain.
The procuring body can also require a contractor to verify that its subcontractors do not contravene any of the mandatory and discretionary exclusion criteria prescribed in the CCR 2016. If this verification shows that mandatory exclusion grounds apply, the procuring body must require the contractor to replace the subcontractor. Where discretionary grounds apply, the procuring body has the option to require replacement of the subcontractor.
Modification and termination
Similar rules regarding modifications to a contract apply to concession contracts under the CCR 2016 as for public contracts under PCR 2015. Accordingly a substantial modification after award of a concession contract may be considered a new contract, and thus require a fresh procurement exercise, unless it falls within one of the prescribed exceptions
Procuring bodies are required to include provisions in each concession contract enabling it to be terminated where:
- a modification of the concession contract has taken place, which would have required a new award procedure in accordance with CCR 2016, SI 2016/273, reg 43
- in the case of a concession contract awarded by a contracting authority, the contractor should have been excluded on one of the mandatory exclusion grounds
- the European Court finds, in a procedure pursuant to Article 258 of TFEU, that the procuring body has awarded the concession contract without complying with its obligations under the EU Treaties and the Concessions Directive
If no such provisions are specifically included they will be implied by law. The contractual provisions may regulate notice and how the consequences of termination will be dealt with.
For related reading on modification and termination of public contracts under PCR 2015, see Practice Note: Modification and termination of public contracts.
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