Association of Colleges - Further Education Library of Procurement

• If the contract is for a 'one-off' purchase, estimate the total value including all component parts, transport costs, installation and commissioning.
   
• The value of a series of contracts, or repeat orders, for the same or similar 'products' should be estimated over 12 months (either based historically or in the future).  Note, however, requirements cannot be disaggregated in order to avoid the legislation.
   
• Fixed term contracts for the lease, rental or hire purchase, should be estimated for the duration of the contract.  
   
• Where the contract is part of a series, the whole series should be estimated over a 12-month period or longer, if appropriate. 
   
• If a contract is for a fixed period, say one year, but has an option(s) to extend, for example, for a further period of one or two years. Then, regardless of whether or not there is uncertainty about exercising the extension options, the maximum duration, ie 3 years, is used when estimating its value.
   
• If the contract, or series of contracts, is for an indefinite or uncertain period, then its total value should be calculated by multiplying the estimated monthly value by 48.
   
• Where there is a single requirement for goods and a number of supplies contracts for similar requirements have been, or are to be, entered into, then the total value of all individual contracts must be calculated.
   

Note: Where the proposed contract includes more than one of the above elements, the value must be determined by calculating its highest possible value. In addition, the contracting authority shall not enter into separate contracts with the intention of avoiding the application of the rules, nor use a valuation method that gives the lowest estimated value.

 

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