The threshold applies to the aggregate value of all contracts for the purchase, lease, rental or hire of goods and/or services of a similar type (and also construction contracts). The University or its Departments need to determine whether goods or services are similar. Aggregation is determined at the level at which the purchasing decision is made (department, faculty, University wide for example). It is not necessary to aggregate if it does not make commercial sense to purchase goods together.
Aggregate values may be calculated by one of the following methods:
- the total value of goods/services purchased during the last financial year; or
- the estimated total value of all contracts expected to be placed in the next financial year, or during the term of the contract if that is longer (e.g. 4 years); or
- where contracts have no definite duration, 48 x the monthly value.
(These principles are mirrored in Financial Regulations for the calculation of contract values and application of competition thresholds.)
Contracts may include an option to extend but, if not, the contract must end on the due date and must be renewed in line with the Directives. (In some very specific circumstances the Directives do allow limited extensions.)