03 August 2006 | Paul Snell

Purchasers have hit out at European Commission (EC) advice on the award of low-value contracts.

The guidance, published in July, was intended to help purchasers avoid breaching the EU treaty over the award of contracts below the EU procurement rule threshold, which for services and supplies is ?211,000 (£143,704).

With contracts below this value, the EC said buyers must retain the treaty principles of transparency, fairness and non-discrimination. This means they may have to advertise some contracts, but the new guidance does not specify circumstances and buyers told SM it was open to misinterpretation.

The guidance follows a European Court of Justice judgment in 2000 that ruled Telaustria had breached the treaty principles by failing to advertise a contract (***News, 8 June**). The EC can challenge the award of contracts if they feel competition for the contract was insufficient. If the European Court of Justice agrees, contracts could be challenged or cancelled.

The EC said there should be a "degree of advertising sufficient to enable the services market to be opened up to competition". It added that it was the contractor's responsibility to judge how interested EU suppliers would be.

Peter Howarth, chief executive of the Society of Procurement Officers in Local Government, said: "I am a little disappointed they have not given greater clarity that compliance with an organisation's own contract and financial regulations would be deemed sufficient, provided they paid due respect to the EU treaty."

Martin Blake, head of the corporate procurement unit at London Probation, added: "The paper provides no further advice than existed before. What purchasers think is defensible may not be agreed by the EC."

Charlie McCreevy, European commissioner for internal market and services, whose department is responsible for the rules, said in a statement: "Restricting low-value contracts to local bidders means companies across the EU are missing out on opportunities."

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