As a starting point, you are correct to consider regulation 6 of the Public Contracts Regulations 2015 (the “PCRs”). Regulation 6 essentially explains how to calculate the estimated value of a contract, for the purposes of determining whether it will be caught by the PCRs. Therefore, a calculation, in accordance with Regulation 6 of the PCRs, needs to be carried out at the outset to confirm that the contract value indeed falls beneath the relevant threshold for the PCRs to apply. As of the date of this webinar, the relevant thresholds are: £122,976 (central government) or £189,330 (other contracting authorities) for supplies and services; and £4,733,252 for works contracts.
Where an authority is undertaking this analysis, it must calculate the estimated value of the contract based on the total amount payable, net of VAT, including any form of option and any potential renewals (see Regulation 6(1) of the PCRs). Therefore, an authority should consider, at the outset, whether it is likely that the contract will be renewed for successive periods and if so, it should consider the value of such renewals as part of determining the contract value. It is also worth noting that authorities cannot simply avoid the application of the PCRs by essentially ‘splitting’ the contract into a series of 12-monthly ‘rolling’ contracts, particularly if the authority is aware that the contract may be renewed after the end of each 12 month period (see Regulations 6(5) and (6) of the PCRs).
Where a contract value is determined to fall below the relevant PCR threshold, it is then necessary to consider Chapter 8 of the PCRs. In the scenario you describe, we have assumed that the local authority essentially ‘extended’ the original contract, which remains the same in terms of scope, albeit the value of the contract has increased by £1,000. If this was the case, then there would be no requirement to publish any form of notice on Contracts Finder. Indeed, Regulations 110(1) and (2) of the PCRs clarify that even where the value of a below-PCR threshold contract is estimated to exceed £25,000, a contracting authority is only obliged to advertise the opportunity on Contracts Finder if the authority advertises the opportunity elsewhere.
We would, however, recommend that the authority considers whether there are likely to be further renewals of the contract in the future and if so, whether the total value of those renewals is likely to exceed the PCR threshold. The authority should also consider whether such renewals will be permissible (i.e. consider whether any of the grounds in Regulation 72 of the PCRs apply), and if not, the contracts in question should be subject to a fresh procurement procedure.