Pre-qualification and selection
Ruth Connorton and Alison Walton consider the issue of pre-qualification in the light of the new procurement regulations. They also assess what can and cannot be considered as selection criteria.
As markets become tighter and less public spending occurs the bidder market will continue to look closely at the reasons why they are not making the cut at shortlisting stage. Using appropriate and defendable criteria is key as is following the mantra with any selection or award: say what you are going to do, do it and then say that you have done it.
Is this a total re-write?
The good news is – no. Much of the established rules set out in the 2006 Regulations continue to apply. We have highlighted the main differences including the ability of contracting authorities to take into account past performance of public contracts (a topic on which we frequently receive queries) and a new limit on requirements for candidates' turnover.
As with the current regime, the new Regulations set out a number of types of selection criteria which authorities can apply to select and limit the number of candidates to be invited to participate in a procurement process on the basis of their suitability to perform the contract:
- Mandatory exclusion criteria (for convictions in the last 5 years);
- Discretionary exclusion criteria (for circumstances arising in the last 3 years);
- Economic and Financial Standing;
- Technical and Professional Ability.
Discretionary criteria
The grounds on which an authority is permitted to exclude a candidate now include two notable additions:
- Conflict of Interest - if there is a conflict of interest which causes a distortion of competition and inequality of treatment between tenderers and it cannot be remedied by other less intrusive measures. It is important to ensure that pre-market engagement itself does not cause conflicts. In practice our experience is that there are seldom conflicts that cannot be practically overcome with measures.
- Past contract performance - where there have been "significant or persistent deficiencies" in the performance of a prior public contract. This is not just an ability to take a view based on things you have heard in the market or grumbles from others about service. Termination, damages or other comparable sanctions have to actually have been imposed - poor performance which went unsanctioned cannot be taken into account. Our view is that this is likely to be a very contentious area as to what is significant or persistent.
Economic and financial standing
Authorities can require a minimum annual turnover for candidates including a minimum turnover in the area covered by the contract but this cannot exceed twice the contract value unless there are special risks in the contract.
Where a procurement is divided into lots, authorities can impose annual turnover requirements for each of the lots, or groups of lots where there is a possibility that a tenderer could win more than one lot to be performed at the same time.
Technical and professional ability
Back to the subject of conflicts again here with a provision that where the authority has established that there are conflicting interests which might negatively affect the performance of the contract, it can assume that the candidate does not have the required professional ability to perform the contract and it can be excluded from the process.
European single procurement document (ESPD)
The European Single Procurement Document is a new concept from the Directive and the Commission are currently drawing up a standard electronic format. The ESPD is a formal self-declaration statement by bidders confirming that exclusions do not apply and that any selection criteria are fulfilled and will identify where and how the necessary supporting information to prove the statements can be accessed by the authority.
The intention is that whilst authorities can check the data for all bidders if they choose only have to do so for the winning bidder at the end of the procurement thus reducing the administrative burden. That said, in practice if you are using a restricted, negotiated or competitive dialogue procedure you may well have scored sections of PQQ data to enable you to reduce participant numbers (this ability continues as per the current regulations provided that the rules for reduction are published and objective) and therefore the use of the ESPD may have the best practical effect in an open procedure procurement.
If an authority has checked a supporting document of a bidder previously and it remains unchanged then the bidder does not need to resubmit it, the onus is on the authority to satisfy itself. Authorities should be thinking about means to track and follow this data for regular bidders.
Ruth Connorton is Partner and Head of Procurement Law and Alison Walton is an Associate at DAC Beachcroft. Ruth can be reached on 0191 404 4130 or This email address is being protected from spambots. You need JavaScript enabled to view it., while Alison can be contacted on 0191 404 4129 or This email address is being protected from spambots. You need JavaScript enabled to view it..
