How to determine the estimated value for public contracts of a regular nature?

Determining the correct estimated value of a public contract is one of the key stages of the public procurement process, especially for contracts of a regular nature. This value is essential to determine the appropriate procurement procedure and to ensure transparency, efficiency and a level playing field for all tenderers. This article aims to provide a basic overview of the determination of the estimated value for public contracts of a regular nature.

The essence of the provisions of Section 19 of Act No. 134/2016 Coll., on public procurement (hereinafter referred to as "ZZVZ")
Section 19 of the ZZVZ lays special emphasis on the methodology for calculating this value, which requires contracting authorities not only to know the relevant legal regulations but also to be able to apply them in practice. The main purpose of this provision is to establish criteria for the selection of an appropriate tendering procedure based on the financial value of the contract.
The aim is to ensure transparency, competitiveness, equal access for all suppliers and at the same time to ensure efficient use of public funds. The correct determination of this value also allows contracting authorities to benefit from a competitive environment and to avoid legal and financial risks associated with illegal or inappropriate procurement.
Public contracts of a regular nature, such as supplies or services purchased on a regular or ongoing basis, require special attention from contracting authorities when calculating their estimated value. The law offers a methodology to help contracting authorities estimate the total value of contracts based on past experience or expected needs over a period of time.
Methodology for determining the estimated value
Determining the estimated value of a public contract is a key step that precedes the actual procurement procedure. For contracts of a regular nature where recurring supplies or services are expected, a number of factors need to be taken into account in order to estimate the value as accurately as possible.
The calculation methodology includes an analysis of historical data, the expected quantity and frequency of supplies or services and inflation trends. The procuring entity should base the total value on the total value of similar contracts performed in the past, adjusting the estimate according to expected price trends and the needs of the organisation. It is also important to take into account any possible change in the scope or quality of the supplies or services.
Common mistakes in determining the estimated value most often include failing to take inflation into account, ignoring historical data or underestimating the scope of services needed. Such errors may lead to the award of a contract in an inappropriate manner, which may lead to a breach of legislation.
Risks associated with the determination of the estimated value
Incorrect determination of the estimated value can have serious consequences, including competitive tendering, legal challenges and loss of public confidence in the ability of the public sector to manage public funds efficiently and transparently. In extreme cases, it may even lead to the cancellation of the procurement procedure or sanctions for the contracting authority.
Recommendations for contracting authorities
It is crucial for contracting authorities to approach the process of determining the expected value systematically and with attention to detail. The following recommendations can help avoid mistakes and simplify the process. These include thorough preparation, including gathering all available information on previous contracts, market trends and expected needs. Keeping documentation containing all supporting documents including calculations is important to ensure transparency. The determination of the estimated value should be approached with caution, taking into account all possible factors and avoiding subjective judgements without firm justification. In the event of difficulties in determining the estimated value of a public contract, contracting authorities should seek an objective opinion or analysis from experts in law, finance or the specific sector concerned.
Adherence to these principles will ensure that the process of determining the estimated value is correct, transparent and compliant with the law, thus contributing to efficient public procurement.
Conclusion
The determination of the estimated value of public contracts is a fundamental element that influences the entire public procurement process. By calculating this value correctly, contracting authorities not only comply with their legal obligations but also contribute to ensuring a fair and open market environment. Despite all the challenges inherent in this process, it is possible to avoid common mistakes and improve public procurement practice, especially through thorough preparation, consultation with experts and careful documentation. These principles help to build a public procurement system that is efficient, transparent and open to all.