# The Single Source Contract Regulations 2014, Regulation 5: Calculating the value of a contract

Extent: E+W+S+N.I.

(1) The value of a contract or component is to be determined—
(a) by the contracting authority; and
(b) in accordance with this regulation.
(2) For the purposes of the Act and these Regulations, the value of a contract or component means the consideration (net of value added tax) which the contracting authority expects will be payable under the contract or component.
(3) The contracting authority must determine the value of a contract or component—
(a) in the case of a proposed contract under regulation ... 61 (assessing whether a contract would be a qualifying sub-contract), either—
(i) at the date of the assessment under regulation 61, or
(ii) at any later date on which it is proposed to enter into the contract,
whichever is the higher;
(b) in the case of a contract which is a qualifying defence contract by virtue of section 14(4) or (5), at the date of the amendment mentioned in section 14(4)(c) or (5)(b);
(c) in all other cases, the date the contract or component is entered into.
(4) In making that determination, a contracting authority must—
(a) where appropriate, take account of—
(i) any option contained in the contract and the likelihood that it will be exercised;
(ii) any effect which changes in the value of money are likely to have on the allowable costs it expects to be included in the contract price;
(b) exclude the value of any land, buildings, equipment, information, personnel or other resource that is provided by the contracting authority;
(c) convert any amounts payable under the contract in a foreign currency to sterling, using a rate consistent with the contracting authority's... policies or where no such policies exist, a rate of exchange derived on a just and reasonable basis.
(5) Subject to paragraph (6), where—
(a) the purpose of the contract is to fulfil a requirement for goods, works or services, and
(b) the contracting authority has also entered into, or proposes to enter into, one or more other contracts which are not the result of a competitive process with the same person (or persons associated with that person) for the purpose of fulfilling that requirement,
the value of the contract is the aggregate of the consideration which the contracting authority has paid or expects to be payable under the contract and all of those other contracts or proposed contracts.
(6) For the purposes of paragraph (5)(b)—
(a) the contracting authority may disregard a contract if conditions A and B are met in relation to it;
(b) the contracting authority may disregard a proposed contract if, were it entered into on the terms proposed, conditions A and B would be met in relation to it;
(c) the contracting authority must disregard a contract, or a proposed contract, which has a value of £250,000 or less where it is reasonably satisfied that the procurement has not been subdivided in order to avoid the requirements of the Act and these Regulations.
(7) Condition A is that the contract has a value of more than £250,000 but less than £1,000,000.
(8) Condition B is that the aggregate value of—
(a) that contract, and
(b) any other such contract within paragraph (5)(b), each of which has a value of more than £250,000 but less than £1,000,000,
is less than 20% of the aggregate of the consideration which the contracting authority has paid or expects to be payable under all contracts entered into, or to be entered into, for the purpose of fulfilling the requirement mentioned in paragraph (5)(a).
(8A) A contract which has a value of £1,000,000 or less shall not be treated as a qualifying defence contract by virtue of this regulation unless the contracting authority is reasonably satisfied that the procurement has been subdivided in order to avoid the requirements of the Act and these Regulations.
(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13) In this regulation, “the contracting authority” means the party to the contract which is, or would be, liable to pay the contract price.

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Source: https://www.legislation.gov.uk/uksi/2014/3337/regulation/5 (the official version)
Page: https://openlegislation.uk/single-source-contract-regulations-2014/regulation-5
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.