Splitting (κατάτμηση)

Definition

Splitting (κατάτμηση) is the artificial division of a single supply, service or work into several smaller contracts, with the purpose or effect that each falls below a threshold: the direct award threshold, the threshold for mandatory use of ΕΣΗΔΗΣ or the EU thresholds. Article 6 of Law 4412/2016 prohibits choosing a method of calculating the estimated value with the aim of avoiding the application of the law, and this prohibition is among the most frequently invoked in appeals and audits.

How the estimated value is calculated

• The total amount payable excluding VAT is taken, including options and renewals.
• For contracts divided into lots, the value of all lots is added up. If the total exceeds the threshold, each lot follows the rules of the total, with narrow exceptions for lots below 80,000 euros not exceeding 20% in aggregate.
• For recurring supplies or services the total value of the contracts of the previous twelve months or financial year is taken.
• For contracts of indefinite duration or longer than 48 months the monthly value times 48 is taken.
• The value is calculated at the time the notice is dispatched or the procedure starts.

The rule is functional, not formal: similar needs of the same body for the same period count as one contract, even if served by different departments of it.

Splitting and division into lots

Division into lots is lawful, indeed the law encourages it to help small businesses, and an authority that does not divide a contract into lots must explain why. The difference is that in division into lots the value is calculated on the whole and the procedure is one, with separate award per lot. In splitting the value is calculated separately and the procedures are many and simpler. The first opens the market, the second closes it.

What it means for the supplier

If you see a body awarding directly, every few months, the same subject matter to the same or a few suppliers, at values just below 30,000 euros, you are probably looking at splitting. The consequences for the authority are serious: nullity of the contracts, surcharge by the Court of Audit, disciplinary liability. The interested supplier can raise it with the authority, report it to ΕΑΔΗΣΥ or challenge the relevant award. The twelve-month rule in direct award was introduced precisely to curb the practice.