Juli Lau and Beth Edwards examine some of the most common procurement pitfalls and provide a checklist of points for local authorities to bear in mind in order to avoid costly errors.
The Public Procurement Review Service (“PPRS”), a body set up by the Cabinet Office to investigate concerns from suppliers in relation to procurement practices, recently published its 2020/2021 Progress Report. The report provides insights into the cases investigated by the PPRS in the 2020-2021 financial year and outlines the main trends and issues raised by suppliers.
The top five areas for complaints were as follows:
- Payment – 30 of the cases referred to the PPRS concerned non-payment of valid and undisputed invoices. Regulation 113 of the Public Contracts Regulations 2015 (“PCR 2015”) implies into all contracts the requirement to pay valid and undisputed invoices within 30 days. The PPRS upheld all of these complaints, leading to the payment of £602.9k to suppliers.
- Evaluation – 12 cases related to the evaluation process of the procurement, with specific concerns including the criteria used and conflicts of interest within the evaluation panel.
- Use of Frameworks – Concerns raised included the use of the direct award procedure, as well as the rationale of suppliers in choosing the most appropriate agreement in the circumstances. The majority of the ten cases related to Crown Commercial Service Frameworks, in particular the Digital Marketplace.
- Feedback – Seven cases concerned a lack of detailed feedback or no feedback at all being provided to bidders when their submissions had been rejected. This meant that suppliers were not able to understand why their bids had failed. The PPRS argues that detailed feedback allows suppliers learn for future bids, and can help to improve the quality of bids in general.
- Advertisement – The majority of the six cases concerned timeframes, the process contracting authorities used to advertise, and a perception that advertisements were written in favour of the incumbent.
- While some of the cases referenced above were dismissed by the PPRS, they are helpful in understanding the main concerns of suppliers and issues for contracting authorities to be aware of.
To avoid the pitfalls highlighted by the PPRS report, the following is a checklist of points for contracting authorities to remember, at each stage of the lifecycle of a procurement:
If intending to use a framework agreement, contracting authorities should carefully consider the following factors:
- Class – Is the contracting authority sufficiently identified as being entitled to use the framework?
- Scope – Does the project satisfy the required technical and essential specific standards to use the framework? Does the framework scope meet the project needs?
- Term – Does the framework permit call-off contracts of the length needed to complete the project?
- Value – Will the total value permitted by the framework be exceeded?
- Process – Have the rules laid down by the framework been followed?
In particular, if making a direct award, have the criteria for doing so been met?
Contracting authorities must be aware of their responsibilities under the procurement law regime to advertise contract opportunities. These responsibilities include complying with relevant time limits and opportunities on particular platforms (including the Find a Tender Service or Contracts Finder, as appropriate). Procurement Policy Note 07/21 outlines these transparency requirements, and we have explained this in further detail in an article on our website.
The advertisement must contain sufficient detail to ensure a fair competition.
The evaluation criteria must determine the most economically advantageous tender (Regulation 67 PCR 2015), and it must actually form the basis of the decision.
Published evaluation criteria must be transparent; clear guidance should be provided to bidders as to how their answers will be evaluated.
For each project, relevant parties should complete conflict of interest checks. A record of any actual, potential and perceived conflicts should be kept and regularly updated if circumstances change. Assistance on managing conflicts of interest can be found in PPN 04/21, and its accompanying guidance, which includes conflict of interest declaration templates which are provided and updated by the Cabinet Office.
The PPRS suggests that feedback should be provided to successful and unsuccessful bidders by contracting authorities after both shortlisting and evaluation.
It is recommended by the PPRS that detailed feedback should be provided to all suppliers, not just those who request it, and that feedback should be comprehensive and allow bidders to understand why their bid was accepted or rejected.
In any case, contracting authorities should be mindful of their duties to give feedback and notification of decisions, as set out in Regulations 55 and 86 PCR 2015.
Contracting authorities should bear in mind the requirements implied into contracts under Regulation 113 PCR 2015 that all valid and undisputed invoices must be paid to contractors within 30 days of the invoice becoming due, and that sub-contracts and sub-sub-contracts must contain similar prompt payment provisions.
It is worth noting that the “Transforming Public Procurement” Green Paper published last year proposes the replacement of the PPRS with a new oversight body which is to carry out an increased level of monitoring.
Furthermore, unlike the PPRS, this new unit would have the ability to issue enforcement notices to individual contracting authorities, with further possible action including spending controls. With these proposals pending, it is even more important that contracting authorities take heed of the types of complaints which are being brought to the PPRS’ attention, and ensure that they have sufficient processes in place to avoid the common pitfalls.
Juli Lau is a Legal Director and Beth Edwards is a Paralegal at Sharpe Pritchard LLP.
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