supply contract

A supply contract is a public contract for the purchase, hire-purchase, leasing, or rental of goods. Under EU Directive 2014/24/EU, supply contracts form one of the three main categories of public procurement alongside service contracts and works contracts. They cover everything from office equipment to medical devices, and may include incidental installation work.

How does a supply contract work?

The classification of a contract as a supply contract rather than a service or works contract has important practical implications. Different threshold values apply to each category, determining the publication and procedural requirements.

For supply contracts, the EU thresholds are €143,000 for central government authorities and €221,000 for sub-central authorities. Works contracts have a much higher threshold of €5,538,000, meaning supply contracts trigger formal procurement obligations at considerably lower values.

Mixed contracts and classification

When a contract combines goods and other elements — for example, purchasing equipment that must also be installed — the classification depends on the main subject matter. This principle is established in the EU procurement directives and confirmed through case law.

In Norway, KOFA (the Public Procurement Complaints Board) has addressed this in several rulings:

• A contract for a control system was classified as a supply contract despite including installation work, because the goods purchase was the main purpose (case 2020/672)
• A used portable cabin was deemed a pure supply contract because the supplier performed no work beyond delivery (case 2019/741)

Incorrect classification can have serious consequences. If a contracting authority treats a supply contract as a works contract, the higher works threshold may lead them to skip the required contract notice on TED, potentially constituting an illegal direct award. Tools like Cobrief help suppliers discover relevant supply contracts published by public buyers and stay on top of deadlines.

Correct classification is fundamental to a lawful procurement process. For suppliers, understanding which contract type applies helps anticipate the rules and submit competitive bids.