Direct award below threshold

Article 50 of the code sets out the bands in which direct award is permitted. The thresholds distinguish works from services and supplies.

Subject	Direct award threshold
Works	Value below 150,000 euros, even without consulting more than one operator
Services and supplies, including engineering and architecture services	Value below 140,000 euros

The wording relating to works deserves attention. The phrase even without consulting more than one operator means consultation is an option and not an obligation: the authority may identify an operator directly.

Above these thresholds direct award is no longer available and the negotiated procedure bands begin. The move brings with it the consultation of a minimum number of operators.

A direct award requires no competition but it does require a reasoned choice, and this is where litigation concentrates. The reasons must address both the choice of operator and the adequacy of the price.

The reasons typically concern the consistency between the experience of the operator identified and the subject matter of the service. The authority must be able to explain why that operator, and the explanation must rest on verifiable elements.

A practical consequence follows for the economic operator that is not intuitive. The quality of the material an operator makes available to authorities, curriculum, references and documented comparable work, serves not only to become known: it supplies the authority with the material from which to reason its choice. A well reasoned direct award is a more robust award, and robustness is in both parties' interest.

In practice many authorities ask for several quotations even where direct award would be permitted without consultation. The practice is lawful and case law has clarified its nature.

Comparing quotations does not turn a direct award into a competition. The procedure remains a direct award, and the authority retains a margin of choice it would not have in a competition: it is not bound to award to the lowest quotation, provided the choice is reasoned.

The consequence for an operator is that taking part in a comparison of quotations does not attract the protections of a tender procedure. It is useful information for calibrating the effort invested in preparing an offer.

The rotation principle is the corrective preventing direct award from settling on the same operator. The prohibition concerns the incumbent and the same subject matter.

The principle applies to direct award, with one express exception: for awards below five thousand euros the principle may be departed from. The departure must still be reasoned in the procedural record.

One aspect discussed in practice concerns direct award through electronic marketplaces and the relationship with the prohibition on re awarding to the incumbent. Administrative case law has intervened repeatedly on the exceptions to the principle and on their limits, and the area remains in flux.

For an operator the consequence is concrete: having performed an award for an authority reduces, for a period, the probability of receiving another of the same kind. The commercial strategy towards a public body is therefore not one of intensification but of continuity over time with alternation.

A direct award also leaves a public trace, and that trace can be used. Outcome notices are available on the institutional websites.

For below threshold awards publicity takes place at national level, by publication on the authority's institutional website under the code's provisions, without transmission of notices to the EU publications office. National publication remains an obligation rather than an option.

At the conclusion of the procedure the authority publishes a notice of the outcome of the award. The notice states the operator awarded and the value of the award.

For an operator seeking to build a presence in an area, this material is the primary source of information: it allows one to reconstruct which authorities award what, how often and to which operators, and therefore to identify the bodies where a commercial presence makes sense. Few commercial sources are as reliable and as free of charge.

One limit underpins the mechanism and concerns the receiving operator directly. It is the prohibition on artificially splitting the contract.

Division into lots relating to the same categories or product sectors in order to circumvent the thresholds is not permitted. Two consecutive direct awards covering a unitary service constitute artificial splitting.

The risk does not fall on the authority alone. An award obtained in breach of the prohibition is exposed to challenge, and the consequences also affect the party that performed it. Checking that the subject matter of the award is consistent with the band applied is therefore a check to make before accepting.

Even the simplest award now runs through the digital ecosystem the code established, and this has operational consequences for the operator. The steps are three and none of them is optional.

Every award requires a tender identification code to be obtained, which accompanies the contract throughout its life and feeds the national public contracts database. The database is searchable and returns the award history.

Procedures are conducted through certified digital procurement platforms, and participation therefore requires the operator to be enabled on the platform the authority uses. Enablement takes days and must be obtained before the invitation.

Verification of requirements draws on public databases through the economic operator's virtual file, reducing the documentation to be produced but shifting the burden onto keeping one's positions with those databases up to date. An out of date position with those databases produces an objection during the procedure.

Two preliminary tasks follow for an operator, neither of them a formality. Being enabled on the platforms used by the authorities in its catchment, which should be checked in advance rather than at the moment of invitation when time is short. And periodically checking one's own positions with the public databases, because an out of date position produces a negative outcome discovered at verification stage.

Treating direct award as an award without rules is the first, and ignores the duty to give reasons that accompanies it. The reasons are a condition of legality and not a formality.

Reading a comparison of quotations as a competition is the second, and creates an expectation of automatic award to the lowest price that the procedure does not guarantee. The comparison informs the choice but does not predetermine it.

Accepting an award without checking its consistency with the value band is the third, and exposes the operator to the consequences of any artificial splitting. The check is done against the total value of the service.

Intensifying one's presence with a single authority is the fourth, and runs against the rotation principle rather than exploiting it. Breadth of catchment produces better results than concentration.

Three actions have a measurable effect on the probability of receiving direct awards. None demands significant investment, but all demand continuity.

Registration with the lists of operators and the registers authorities establish, which the code expressly recognises as a means of identifying operators to consult. Registration must be renewed and the declared requirements kept current.

Presence on the public administration's electronic marketplaces, which for many categories of service is the ordinary channel for direct award. Absence from the marketplace is in practice exclusion from those categories.

Building a file of documented and verifiable references, organised by type of service and by value, which is the material from which an authority reasons its choice. An orderly file reduces the time an authority spends reasoning its choice.