Out-Law News 4 min. read
05 Mar 2015, 1:49 pm
The guidance (12-page / 162KB PDF) gives more detail to public bodies on how certain elements of the the new Public Contracts Regulations which came into force last week apply. It focuses on the implementation of Part 4 of these Regulations.
The Public Contracts Regulations 2015 apply to England, Wales and Northern Ireland, but Part 4 does not apply to bodies in Wales or Northern Ireland whose functions are wholly or mainly devolved Welsh or Northern Irish functions. This is because Part 4 extends beyond the implementation of the EU Public Sector Directive 2014/24/EU and implements UK government policy, the so-called Lord Young reforms. Based on recent guidance issued by the Welsh government this means that most Welsh public sector bodies will not be subject to the Part 4 requirements, or this latest guidance associated with Part 4. Some bodies may still be subject to them, though, such as the Police or the DVLA.
The 2015 Regulations require public authorities to "have regard" to government guidance issued "in relation to the qualitative selection of economic operators" when running procurements for that are above the threshold.
The guidance provided for under the Regulations can refer to "the use of questionnaires for the purposes of qualitative selection, including the avoidance of burdensome, excessive or disproportionate questions".
In its guide, the government recommended that all public bodies adopt its standard PQQ for their own procurements and embed them within any electronic procurement (e-procurement) systems they use. However, it said that only the questions that are "relevant and proportionate to the contract" should be used by those authorities.
PQQs are documents that prospective suppliers are often required to fill out as part of the process of bidding for contracts. Details supplied in PQQs help bodies looking to award a contract to assess which businesses to invite to formally bid for those contracts. The use of PQQs in small value contracts below stipulated EU thresholds is prohibited under the new rules. However, public bodies can ask some questions of prospective suppliers at the pre-qualification stage for those small value contracts in certain cases, according to a recent policy note issued by the government.
Under the new Regulations and in accordance with the new guidance, public bodies that deviate from the standardised PQQs must explain their decision to do so where the difference in approach constitutes a 'reportable deviation'. This reporting obligation has effect from 1 September this year.
“The guidance notes that it will need updating in due course when the European Single Procurement Document – which is essentially a supplier’s pre-qualification passport applicable across the EU - is introduced," said Jennifer Robinson, a procurement expert at Pinsent Masons, the law firm behind Out-Law.com. "That will be an EU level 'core PQQ' and will replace the UK specific one. We understand that negotiations are ongoing among the member states to reach agreement on the form of that EU document and the timescale for its introduction is currently uncertain.”
The government said that it would be conducting "series of 'spot checks' … in the coming months to monitor and check" whether public bodies are sticking to the standardised wording.
The new guidance also said that public bodies should "allow potential providers to self certify that they are not subject to any of the mandatory/ discretionary grounds for exclusion" and that businesses should be allowed to "complete the invitation to tender/invitation to quote" stage of the procurement on the basis of their self-certification.
The new Regulations require public authorities to exclude prospective suppliers from winning their contracts in certain cases, and there are other circumstances where it is at public bodies' discretion to exclude businesses from the procurement process.
Reasons for mandatory exclusion include where businesses have been convicted of bribery or corruption offences or non-payment of taxes. Examples where public bodies can exercise discretionary exclusion powers include where prospective suppliers' integrity is in question because they have been "guilty of grave professional misconduct" or where there is a conflict of interest that "cannot be effectively remedied by other, less intrusive, measures".
The Regulations, however, allow contracting public authorities the discretion to overlook practices that constitute mandatory or discretionary grounds for exclusion if prospective suppliers have engaged in 'self-cleaning'.
'Self-cleaning' is where the business has "paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct; clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities; and taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offences or misconduct".
The government's new guidance explained more about how the 'self-cleaning' regime applies. It said public bodies cannot exclude businesses from the procurement process on the basis of a 'mandatory exclusion' conviction that happened more than five years prior to the procurement. Public bodies also cannot exercise their discretionary exclusion rights where more than three years have passed since the "cause for discretionary exclusion" occurred.
The guidance also explained that contracting public authorities should not exclude prospective suppliers that have failed to pay the tax they owe from the procurement process "when the supplier has paid or enters a binding agreement to pay". It is also open to authorities to let potential providers that have not paid their taxes tender for work "if the amounts are only 'minor' or the supplier hasn’t yet had a chance to finally pay or agree to pay" what they owe.
The 'self-cleaning' rules do not apply to "discretionary exclusion grounds which are procurement-specific and which do not arise from supplier misdeeds", the new guidance said.