Regulation 45E Exempt contracts: vertical arrangements’ calculationsF1

(1)

For the purposes of paragraph 2(2)(c) of Schedule 2 to the 2023 Act (exempted contracts), the calculation of the percentage of activities carried out by a person is to be made in accordance with this regulation.

(2)

Subject to paragraph (8), the percentage of activities carried out by a person for or on behalf of the contracting authorities or other persons described in paragraph 2(2)(c)(ii) of Schedule 2 to the 2023 Act is to be calculated by taking that person’s attributable turnover as a percentage of their total turnover, over the relevant period.

(3)

A person’s attributable turnover is their turnover deriving from activities carried out on behalf of the contracting authorities or other persons described in paragraph 2(2)(c)(ii) of Schedule 2 to the 2023 Act.

(4)

Where a person’s attributable turnover or total turnover is not available for the entirety of the relevant period because the person was created or commenced their activities following the beginning of the relevant period, the attributable turnover and total turnover is to be calculated in accordance with paragraph (5).

(5)

A person’s attributable turnover and total turnover is to be calculated—

(a)

where there has been no turnover at all during the relevant period, using credible business projections for a period of three years beginning with the date of contract award;

(b)

in any other case, using—

(i)

any attributable turnover or total turnover, as the case may be, generated during the relevant period, and

(ii)

credible business projections, for a period beginning with the date of contract award,

which, when combined, provide turnover information and projections for the entirety of the period of three years beginning with the date any turnover was first generated during the relevant period.

(6)

Where a person’s attributable turnover or total turnover for the entirety of the relevant period is, as at the date of contract award, no longer representative of the person’s activities because the activities changed as a result of a reorganisation of the person which occurred following the beginning of the relevant period, the attributable turnover and total turnover is to be calculated in accordance with paragraph (7).

(7)

A person’s attributable turnover and total turnover is to be calculated—

(a)

where there has been no turnover at all generated after reorganisation, using credible business projections for a period of three years beginning with the date of contract award;

(b)

in any other case, using—

(i)

any attributable turnover or total turnover, as the case may be, generated after reorganisation, and

(ii)

credible business projections, for a period beginning with the date of contract award,

which, when combined, provide turnover information and projections for the entirety of the period of three years beginning with the date any turnover was first generated after reorganisation.

(8)

Where the percentage of activities carried out by a person, as calculated in accordance with paragraphs (2) to (7), is not a suitable measure of the activities carried out by a person for the purposes of paragraph 2(2)(c) of Schedule 2 to the 2023 Act, the percentage of such activities must be calculated by taking, over the relevant period, one of the following—

(a)

costs incurred by the person on activities carried out for or on behalf of the authorities or other persons, as a percentage of their total costs;

(b)

time spent by the person on activities carried out for or on behalf of the authorities or other persons, as a percentage of their total time;

(c)

the value of goods, services or works supplied by the person to the authorities or other persons, as a percentage of the total value of goods, services or works supplied by the person;

(d)

the value of goods, services or works supplied to the person by the authorities or other persons, as a percentage of the total value of goods, services or works supplied to the person.

(9)

In this regulation—

“accounting period” (“cyfnod cyfrifyddu”) means a period in respect of which accounts are prepared in relation to the person;
“date of contract award” (“dyddiad dyfarnu’r contract”) means the date when the contracting authority decided to award the contract;
“relevant period” (“cyfnod perthnasol”) means either—
1. (a)
  the period of three years ending with the date of contract award, or
2. (b)
  where, due to the timing of the preparation of the person’s accounts, information relating to turnover for the period in sub-paragraph (a) is not available as at the date of contract award, a period of three years ending with the date the last accounting period before the date of contract award for which such information is available ends;
“reorganisation” (“ad-drefnu”) means a change, other than a minimal or incidental change, to a person’s structure, operations, funding or ownership.

Annotations

Textual amendments

F1: Regs. 45E, 45F inserted (23.6.2025) by The Procurement (Wales) (Amendment) Regulations 2025 (S.I. 2025/707), regs. 1(2), 3(4)