Estimated Value
The estimated value (hankinnan ennakoitu arvo) of a procurement determines which rules and procedures apply. It is the total value of the contract over its entire duration, including options and extensions. Correct calculation of the estimated value is crucial for determining the applicable threshold and procedure.
Definition
The estimated value is the total estimated remuneration payable under the contract, excluding VAT, calculated at the time the contract notice is sent or the procurement procedure is initiated. It includes the value of option periods, extensions, bonuses, and any fees payable by users. For framework agreements and dynamic purchasing systems, it is the total estimated value of all contracts to be awarded during the entire duration. The contracting authority must not split a procurement artificially to avoid threshold requirements. Calculation methods are defined in Sections 27-31 of the Public Procurement Act (1397/2016).
Practical Example
A contracting authority plans a service contract for 3 years with two 1-year options at EUR 100,000 per year. The estimated value is EUR 500,000 (5 x EUR 100,000), which includes the option years. This means the procurement exceeds the EU threshold and must follow EU procedures.
Common Mistake
Contracting authorities sometimes forget to include option years and extensions when calculating the estimated value. This can lead to using incorrect procurement procedures, which may be grounds for a Market Court appeal.
Frequently Asked Questions
Should VAT be included in the estimated value?
No. The estimated value is always calculated excluding VAT. This is consistent across all EU member states and ensures comparability across different national tax systems.
How is the estimated value calculated for lots?
When a procurement is divided into lots, the estimated value is the combined total value of all lots. Individual lots cannot be treated separately to avoid exceeding thresholds. However, lots below EUR 80,000 (services/supplies) or EUR 1,000,000 (works) may be exempted from EU procedures if they total no more than 20% of the combined value.
Related Terms
Contract Notice
Learn about contract notices in Finnish public procurement. The official announcement published on Hilma and TED to invite tenders from suppliers.
Contract Period
Learn about contract periods in Finnish public procurement. How sopimuskausi duration, options, and extensions work under procurement law.
EU Threshold
Learn about EU procurement thresholds in Finnish public procurement. The value limits above which EU-wide tendering rules apply under hankintalaki.
National Threshold
Learn about national procurement thresholds in Finnish public procurement. The minimum values above which hankintalaki applies to public contracts.
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