Procurement Act 2023

Utilities contracts

6 (1) A utilities contract awarded for the supply of goods, services or works—

(a) by a utility to a person affiliated with the utility, or

(b) where the utility in question is a relevant joint venture, by the utility to a person affiliated with any member of the joint venture,

but only if the turnover test is met by the affiliated person in relation to goods, services or (as the case may be) works.

(2) A person is “affiliated” with another if the person is in the position of a group undertaking of the other person, within the meaning given in section 1161(5) of the Companies Act 2006, whether or not either of them is an undertaking within the meaning given in section 1161(1) of that Act.

(3) The “turnover test” is met in relation to goods, services or works if the affiliated person’s turnover deriving from the supply of goods, services or (as the case may be) works to the utility and other persons affiliated with the utility (their “affiliated turnover amount”) exceeds 80 per cent of their total turnover amount deriving from the supply of goods, services or works.

(4) An appropriate authority may by regulations make provision about how to calculate a person’s affiliated turnover amount and total turnover amount for the purposes of sub-paragraph (3).

(5) The regulations may, in particular, make provision—

(a) for those amounts to be calculated by reference to—

(i) an average amount for a period specified in the regulations;

(ii) another reasonable method so specified;

(b) to secure that, in calculating those amounts in relation to a person (“A”), turnover of a person who is an affiliated person in relation to A is to be treated as part of A’s turnover.