Correctly classifying a contract as works, supplies or services seems straightforward, but in practice a wrong classification leads to problems: the wrong procedure, incorrect thresholds, missing contractor qualifications, or an invalid procurement. Especially with mixed contracts — software with implementation, design-build, supply with installation — the boundary is not always clear.
In this article we explain how the three categories are defined, how to determine the main subject in mixed contracts, and what consequences the classification has for your bid.
The three categories
Directive 2014/24/EU and the Belgian Act of 17 June 2016 distinguish three types of public contracts.
Works contracts
A works contract relates to the execution, or the design and execution, of construction activities. The law refers to Annex I of the Directive, which describes activities such as earthworks, building, installation, finishing and maintenance of structures.
Characteristics: physical realisation of a construction work, contractor qualification often required (in Belgium), higher European thresholds (€5,404,000 for 2026-2027).
Supply contracts
A supply contract concerns the purchase, leasing, rental or hire purchase of products. This covers all forms of acquisition of goods, including their incidental siting and installation.
Characteristics: transfer of a product, no contractor qualification required, lower thresholds than works.
Service contracts
All contracts that are neither works nor supplies fall under services. This is a residual category. Consultancy, ICT development, maintenance services, cleaning, transport, training — they are all services.
Characteristics: performance of an activity without a physical product or structure as the result. The law makes an additional distinction for social and other specific services (Annex III of the Directive), for which a lighter regime applies with a higher threshold of €750,000.
Mixed contracts: determining the main subject
Many contracts combine elements from two or even three categories. A software project may include licence delivery (supplies), custom development (services) and installation in a server room (works). How do you classify that?
The main rule: the main subject decides
Article 20 of the Belgian Act prescribes that a mixed contract is classified on the basis of the main subject. The main subject is determined by the component with the highest estimated value.
In concrete terms: if licences cost €200,000 and implementation services €350,000, the main subject is services and the contract is procured as a service contract.
Exception: works as a component
If a mixed contract contains a works component, special rules apply. As soon as the works element constitutes the main subject — has the highest value — it is a works contract, with everything that entails: qualification requirements, higher thresholds, specific procedures.
But even if the works element is not the main subject, the authority may choose to classify the contract as a works contract if the works component is inseparably linked to the rest.
Design-build contracts
In design-build, the authority starts from a functional description and transfers both design and execution to the contractor. This is by definition a works contract, even if the design component is substantial in value. The Directive explicitly includes “the design and execution” of a work as a works contract.
Why does the classification matter?
The classification has direct consequences on several levels.
Thresholds. The European threshold for works is significantly higher (€5,404,000) than for supplies and services (€140,000 or €216,000). A wrong classification can result in a contract being incorrectly kept outside the European regime.
Qualification. In Belgium, contractor qualification (erkenning) is required for works contracts above certain amounts. The class and category of the qualification depend on the amount and nature of the works. For a service contract, qualification plays no role.
Procedures. Some simplified procedures are only available for certain categories. The negotiated procedure without prior publication has different thresholds for works than for supplies and services.
CPV code. The classification co-determines which CPV code applies. A wrong CPV code leads to poor discoverability of the contract and potentially to complaints from market parties that were not reached.
Common mistakes
Classifying software + implementation as a supply. In SaaS projects or custom software, the services (configuration, integration, training) are often the largest part of the contract. The licence or subscription alone does not make it a supply contract.
Classifying building maintenance as works. Regular maintenance (cleaning, green maintenance, lift maintenance) is a service, even if it takes place in a building. Only when there are physical construction activities — renovation, conversion, new build — is it a works contract.
Misclassifying framework agreements. A framework agreement for office supplies is a supply contract. But a framework agreement for ICT consultancy is a service contract. The classification follows the subject of the framework agreement, not the contract form.
Practical tips
Analyse the cost structure. List all components with their estimated value. The component with the highest value determines the classification. Document this to justify the choice.
Choose the correct CPV code. The CPV code must be consistent with the classification. A service contract for software development should not fall under a CPV code for supply of IT equipment.
Check qualification requirements. If the contract contains works aspects, verify whether contractor qualification is required. Check the correct class and category before you submit.
Pay attention with design-build. If the authority uses a functional description and asks for both design and execution, it expects a works contract. Draft your tender as a contractor, not as a consultant.