July 5th, 2023 by James Goudie KC

What constitutes a concession? When does a contract come within the Concession Contracts Regulations 2016 rather than the Public Contracts Regulations 2015? Why may it matter? These were issues covered in OCEAN OUTDOOR v HAMMERSMITH & FULHAM LONDON BOROUGH COUNCIL (2019) EWCA Civ 1642 and DUKES BAILIFFS v BRECKLAND COUNCIL (2023) EWHC 1569 (TCC). There are different financial thresholds. There are different procurement procedures. There are different permissible selection criteria.

In the context of a services contract, there are 5 main elements of a concession contract within the 2016 Regulations.

FIRST: the contract concluded in writing must be identified; and not excluded by the land exemption.

SECOND: this contract must be one where a contracting authority entrust to an economic operator for “pecuniary interest” the legally enforceable obligation to provide and manage services to or for the public which the authority would otherwise provide itself for its residents (or someone else).

THIRD: the consideration for the contract must consist either solely in the right to exploit the services or in that right together with payment.

FOURTH: a transfer of “operating risk” must be involved.

FIFTHLY: a real risk of potential loss must be involved.

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