Deborah Ramshaw provides a comprehensive list of frequently asked questions for Contracting Authorities and Bidders.
What is the relevant law that applies to the award of contracts in the public sector?
Contracting authorities (comprising NHS bodies, local and central government) have to comply with the law in the Public Contracts Regulations 2015. For contracts over a certain threshold (see Glossary) the contracting authority must advertise the contract opportunity and follow one of the tendering procedures in the Regulations.
What is the “light touch regime”?
A regime which is set out in the Regulations at regulations 74 to 76. Essentially certain services (set out in Schedule 3), if over the relevant threshold (see Glossary), are subject to the regime in regulations 74 to 76 which essentially consists of: (a) advertising the opportunity; (b) run a competitive process which is transparent and treats all bidders equally (it need not be one of the procedures set out in detail in the Regulations); (c) publish a contract award notice.
Where can I find guidance on the Regulations?
The government publish guidance on the Regulations at https://www.gov.uk/guidance/transposing-eu-procurement-directives#guidance and useful articles and guidance can be found on the Hempsons’ website at https://www.hempsons.co.uk/services/public-procurement/.
What procedures are available to contracting authorities?
The Regulations contain five types of procedure but only two (open and restricted) can be used “as of right” by contracting authorities. The competitive dialogue, competitive with negotiation and innovation partnership procedures can only be used if the contracting authority can meet the grounds for doing so set out in the Regulations.
What is the open procedure most suitable for?
Generally, this is suitable for straight-forward procurements and/or procurements with a limited number of suppliers. As there is no filtering or “pre-selection” of bidders, anyone can submit a tender. No negotiations are permitted when bids are received, or the winner is selected.
What is the restricted procedure most suitable for?
If the contracting authority wants to pre-select bidders based on specified areas such as financial and economic capacity or technical or professional capability, this procedure should be used as it will reduce (restrict) the number of bidders who will be invited to submit tenders. No negotiations are permitted when bids are received, or the winner is selected.
What are the grounds for using the competitive dialogue and competitive with negotiation procedures?
The grounds are set out in the Regulations and are as follows:
- the needs of the contracting authority cannot be met without adaptation of readily available solutions; or
- the needs include design or innovative solutions; or
- the contract cannot be awarded without prior negotiation because of specific circumstances related to the nature, the complexity or the legal and financial make-up or because of risks attaching to them; or
- the technical specifications cannot be established with sufficient precision by the contracting authority with reference to a standard, European Technical Assessment, common technical specification or technical reference; or
- where, in response to an open or restricted procedure, only irregular or unacceptable tenders have been submitted. (Irregular and unacceptable tenders are defined in regulation 26(5) to 26(7).
If the grounds for use are the same should I use competitive dialogue or competitive negotiation?
This will be fact specific and will depend on whether the authority knows it is very likely to need to negotiate or is unsure about whether negotiation will be necessary.
The competitive negotiated procedure allows the contracting authority to simply reserve the right to negotiate in the OJEU advertisement but allows the authority to award the contract based on the initial tenders it receives if negotiation is not necessary. The competitive dialogue procedure assumes that dialogue/negotiation will be necessary but does have the additional flexibility of allowing negotiation with the winning bidder (subject to certain conditions) which the competitive negotiated procedure does not allow.
When should I use the innovation partnership process?
This procedure allows both the R&D and subsequent purchase of a product (without a further call for competition). The authority must have a need to procure an innovative service, supply or work and innovative is defined as “the implementation of a new or significantly improved product, service or process, including but not limited to production, building or construction processes, a new marketing method, or a new organisation method in business practices, workplace organisation or external relations”.
Are there mandatory timescales set out in each of the procedures?
For the open procedure: minimum 35 days for receipt of tenders from dispatch of the contract notice, this can be reduced by 5 days where tenders are submitted electronically.
For the restricted procedure: minimum 30 days for receipt of expressions of interest from dispatch of the contract notice and a minimum of 30 days for submission of tenders, this can be reduced by 5 days where tenders are submitted electronically.
For the competitive negotiated procedure, the minimum timescales are 30 days for receipt of initial expressions of interest from the dispatch of the contract and a minimum of 30 days for submission of initial tenders, this can be reduced by 5 days where tenders are submitted electronically.
For the competitive dialogue and innovation partnership procedures the minimum timescales are 30 days for receipt of initial expressions of interest from the dispatch of the contract notice – the authority otherwise sets reasonable timescales for the rest of the process.
The Regulations require an extension of time limits where information is supplied to bidders less than 6 days prior to the deadline for receipt of bids, and if there has been a significant change made to one or more of the procurement documents.
Is it possible to accelerate the minimum timescales?
Yes, but only for reasons of urgency duly “substantiated” by the authority which renders the minimum timescales “impracticable”:
- Open procedure – 35 days can be reduced to 15 days
- Restricted procedure – 30 days for expressions if interest can be reduced to 15 days; 30 days for receipt of tenders can be reduced to 10 days
- Competitive negotiation – as for restricted
- Competitive dialogue and innovation partnership – acceleration not possible.
The onus is on the authority to justify the grounds for urgency and it will usually be insufficient for the urgency to arise from delay by the purchaser.
Timescales can also be shortened when a compliant PIN has been published (see Advertisement section below) as follows:
- Open procedure – 35 days can be reduced to 15 days
- Restricted procedure – 30 days for receipt of tenders can be reduced to 10 days
- Competitive negotiation – as for restricted
Tender Documents and Specification
Yes, Regulation 53 requires that the “procurement documents” are made available electronically from the date that the advertisement is sent to the OJEU (see Glossary). “Procurement documents” includes the contract notice, the technical specification, the descriptive document, contract conditions and tender instructions.
How much detail do we need to include in a specification?
Specifications should set out the characteristics required of the works, services or supplies. Authorities should make clear reference to any mandatory requirement and specifications should afford equal access of suppliers to the process and shall not have the effect of “creating unjustified obstacles to the opening up of public procurement to competition”. Reference to technical standards must be in order of preference as follows:
- National standards transposing European standards;
- European Technical Assessments;
- Common technical specifications;
- International standards;
- Other technical reference systems established by the EU standardisation bodies;
- Where none of the above exist, authorities can use national standards, national technical approvals or national technical specifications but each reference shall be accompanied by the words “or equivalent”.
Can we name a specific product that suppliers must use?
Unless justified by the subject matter of the contract then specific makes or processes, trademarks or patents should not be used. Reference is permitted “on an exceptional basis” where it is not possible to otherwise provide a sufficiently precise and intelligible description of the subject matter of the contract, such reference must be accompanied by the words “or equivalent”.
Can we ask a private supplier to help draft our specification?
Yes, but you will need to ensure that the involvement of the supplier will not have the effect of distorting competition or violating the principles of non-discrimination and transparency. Regulation 41 provides that a contracting authority must take “appropriate measures to ensure competition is not distorted” where a candidate or tenderer has participated in advising on or preparing the procurement process. You may only exclude the bidder (who has advised the authority) if there is no other method of ensuring equal treatment.
What information must our OJEU advertisement include?
OJEU notices are in a standard form, so the information required is clear on the face of the notice except where it is not applicable. Standard notices are available here: https://enotices.ted.europa.eu/changeLanguage.do?language=en
The notice should include the internet link where the procurement documents are available electronically.
Do I need to publish the tender opportunity anywhere else?
If the contract is over the relevant value threshold, Regulation 106 requires an authority to publish the tender opportunity details on the Contracts Finder website (see: https://www.contractsfinder.service.gov.uk/Search) within 24 hours of the time it becomes entitled to publish at national level. Note that Regulation 106 does not apply to a procurement of clinical health services for the purposes of the NHS, nor where the contracting authority is a maintained school or Academy.
An under-threshold contract for the purposes of the Regulations will not need advertising in OJEU but will generally need to be advertised in Contracts Finder if the contract is above £10,000 for central government or above £25,000 for non-central government and NHS Trusts.
This requirement for under-threshold contracts does not apply to the procurement of clinical health services for the purposes of the NHS, nor where the contracting authority is a maintained school or Academy.
Can I amend an OJEU notice once it is published?
Yes, a “corrigendum” can be used (one of the standard form notices) to notify the EU publications office of any change but consideration should be given to extending any relevant timescales.
What is a PIN?
A Prior Information Notice is published in the OJEU which sets out a contracting authority’s future purchasing intentions to assist the market with knowledge of the procurement pipeline. The authority is not then obliged to necessarily undertake the procurements and publishing a PIN is not mandatory unless the authority wishes to use it to reduce timescales (see below).
A PIN can also be used by sub-central contracting authorities (i.e. those not expressly listed in Schedule 1 to the PCR), when using the restricted procedure or competitive with negotiation procedure, as a call for competition in itself instead of an OJEU notice, provided that certain conditions in the PCR are met.
How do I use a PIN to speed up timescales?
Provided that the PIN meets the requirements of the PCR and has been published at least 35 days and not more than 12 months in advance of a contract notice, the contracting authority may shorten the timescales under the open, restricted and competitive with negotiation procedures as indicated in the “Procedures” section above.
Is there a standard form Selection Questionnaire (SQ) that must be used?
Yes, the PCR requires contracting authorities to have regard to statutory guidance in relation to over-threshold procurements (except for procurements of clinical health services for the purposes of the NHS). The guidance published has a standard form SQ included and if an authority wishes to deviate from the standard form it must self-report this to the Mystery Shopper service. The guidance and template is available here: https://www.gov.uk/government/publications/procurement-policy-note-816-standard-selection-questionnaire-sq-template
Note the standard SQ does not include a standard form evaluation methodology (see below).
Can we add our own questions to the standard SQ?
You cannot add your own questions to Part 1 or Part 2 of the standard SQ. These sections gather information about the supplier and include the exclusion questions and are aligned with the PCR. However, Part 3 of the standard SQ has a section where contracting authorities can add project specific questions.
Do we have to provide our SQ evaluation methodology to bidders?
Yes, in order to comply with basic principles of transparency the evaluation methodology should be disclosed and the guidance (link above) states that the scoring, weightings and minimum thresholds should be disclosed in the SQ. No standard methodology is provided so contracting authorities need to ensure that they disclose the evaluation methodology when the SQ is published/made available.
What evaluation criteria can we use at the SQ stage?
The criteria must be in accordance with the requirements of the PCR. The standard SQ includes the mandatory and discretionary exclusion questions set out in the PCR and the criteria for exclusion should therefore be set out. As no standard evaluation methodology is provided the contracting authority must ensure that the criteria for economic and financial standing and technical and professional ability are set out, including criteria for any project specific questions which the authority has included in the SQ. Criteria must be as per the PCR so authorities should refer to regulations 58 to 62 when drafting the criteria and evaluation methodology. Authorities should bear in mind that “pass/fail” questions should clearly set out what constitutes a pass or fail in each case.
What about joint bidding / consortia / sub-contracting?
The standard SQ does have provision to allow the contracting authority to ask questions about joint bidding / consortium bids and the proposed supply chain. The authority needs to ensure it includes relevant evaluation criteria if the questions are to be assessed, in particular taking care over how finance is to be assessed. Authorities are referred to regulation 63 of the PCR which sets out the provisions enabling economic operators to rely on the capacity of other entities.
The Tender Period
Responding to clarification questions during the tender period
In responding to clarification questions during the tender period the authority must ensure transparency and equality of treatment. For all non-commercially confidential questions the authority should respond (on an anonymous basis) to the question and circulate to all bidders (and/or make available on any portal). The process for asking (for example, where the authority is evaluating a bid and a response is ambiguous) and responding to clarifications should be set out in the tender documents, including any deadline for asking questions ahead of the tender closing date.
Can we make changes to the specification/tender requirements/evaluation criteria during the tender period?
It will depend on whether the changes are material to the extent that different bidders may have expressed an interest in the opportunity. If the changes are material then the authority should consider recommencing the competition otherwise it may be vulnerable to challenge. If the changes are not material then the authority can make the relevant changes but should allow extra time in the process for bidders to take account of them.
What should we do if we receive a bid after the closing date and time?
If the deadline is clear, then generally the bid should be excluded as the deadline is normally considered to be a fundamental bidding condition. However, if the bidder can provide evidence that the late bid was due to, for example, an error on the authority’s portal, then the authority should investigate this and may decide to exercise discretion to accept the bid. The principles of transparency and equality of treatment will be key in this type of situation.
One of the prices received seems abnormally low, are we obliged to investigate this?
The authority should consider if the price is indeed “abnormally low” as compared to, for example, a new market entrant deliberately putting in a low price to gain entry to the market. If the authority considers that the price is abnormally low then it is required, under the PCR, to ask the bidder to explain the price submitted. The authority should then consider the explanation and the PCR sets out a number of non-exhaustive matters the authority can have regard to.
The authority should only reject the bid if it considers that the explanation provided by the bidder does not satisfactorily account for the low level of price/costs. The authority must reject the bid If the reason the price/cost is abnormally low is because it does not comply with EU environment/social or labour laws.
What if the specification has a mandatory requirement that a bidder cannot meet?
If the authority’s specification clearly states that a particular requirement is mandatory, and the bidder cannot meet it then the bid should be rejected. The tender documents should clearly set out the requirement and that failure to meet such a requirement will result in disqualification from the procurement.
How should we structure the evaluation process?
The PCR do not provide any requirements on how an evaluation process is conducted or structured save that it should be in accordance with the Treaty Principles, i.e. transparent, non-discriminatory and ensures equal treatment. The key is to ensure a transparent process and keep a robust audit trail. So, if an authority uses a moderation stage in its process it should keep clear written records of the process, including, for example, why scores were changed (if that is the case).
Can we ask bidders to make a presentation / attend an interview after bids are received?
This is permitted but (a) this will need to have been clearly set out in the tender documents, and (b) the authority will need to be very clear whether such presentations/interviews are formally evaluated or aid clarification of the written submission. If the interview/presentation is to be evaluated, then the criteria and scoring methodology must be set out in the tender documents. Such criteria must be objectively justifiable, ensure equal treatment and relevant and proportionate to the contract being tendered.
The Standstill Stage
What information should be included in award letters/letters to unsuccessful bidders?
Regulation 86 sets out the requirements for the award letters. The letters must include (1) the award criteria, (2) the reasons for the decision, including the characteristics and relative advantages of the successful tender, (3) the name of the successful bidder(s), (4) the score of the recipient of the letter, (5) the score of the successful bidder(s), and (6) a precise statement of the date before which the contracting authority will not enter into the contract or framework agreement (i.e. the date after the end of the standstill period).
Is there guidance on what we need to include as part of the “characteristics and relative advantages”?
There is nothing in the Regulations but guidance from CCS suggests that in order to comply with this obligation contracting authorities should release the full breakdown of scores against each criterion and sub-criterion, and support this with a narrative explanation of why the winner scored more heavily in the relevant areas. We would advise authorities to go further than simply concentrating on where the winner scored higher as there will still be “characteristics” of the winning bid when the winning bidder has scored the same or less than the recipient of the letter.
Do you have to follow a standstill period for a contract let under the Light Touch Regime?
The CCS guidance notes that the “position is not wholly clear” but recommends that authorities comply with the standstill provisions for LTR procurements. We would offer the same advice.
Following receipt of an award letter an unsuccessful bidder has requested a meeting – do we have to meet the bidder and if so, how should we structure the meeting?
There is no obligation to meet the bidder as all the relevant information should be in the standstill letter. There are often good commercial reasons why a meeting may be useful, but we would advise these to be held only once the relevant contract has been entered into and ensure that only the information given in the standstill letter is referred to in any meeting.
On day 8 of the standstill period we have received a letter from an unsuccessful bidder requesting a large amount of information about the procurement and requesting the standstill is extended, do we have to comply?
The authority should carefully consider the request and in accordance with the TCC Guidance should engage with the complaint and provide reasonable information. In the first instance the authority should consider extending the standstill period unless there are reasons of urgency why this is not possible, if this is the case the bidder should be informed as soon as possible. We advise authorities to seek advice on the level of disclosure that should be made.
What are the obligations to publish an award notice?
Regulation 50 sets out the requirements for an award notice. These must be published once a contract has been signed as a result of a process under the PCR. Award notices are also requited in respect of contracts awarded under the Light Touch Regime. Award notices should be published no later than 30 days after the award of a contract or framework agreement. Award notices are not required where call-offs have been made under a framework agreement (but note that there may be a requirement to publish the information in Contracts Finder under Part 4 of the PCR.
When should I consider setting up a framework?
Frameworks are extremely efficient purchasing tools as once procured any call-offs made under the framework need not be the subject of a separate OJEU notice, even if the value of the contract exceeds the threshold. They are useful for non-complex, and/or high volume and/or recurring purchasing. Regulation 33 sets out the relevant requirements for frameworks.
Where another authority has set up a framework can I use it for my purchasing and still comply with the PCR?
We would advise you to do some due diligence before using the framework as if the use of the framework is not a compliant call-off then it will be you that is subject to challenge and not the framework operator. One of the key aspects is to determine whether your authority is covered by the original OJEU notice for the framework. As a minimum, your type of organisation should be clearly identified in the notice as being eligible to use the framework. You should also determine whether your requirements are covered under the framework.
Can we set up a framework agreement for a term of eight years?
It will depend on the circumstances. The PCR state that the maximum permitted duration of a framework agreement is four years, other than in exceptional cases duly justified by the subject-matter of the contract. For example, if suppliers are required to make investments which can only be recouped over a period of more than four years.
Can I set up the option in my framework agreement to either make a direct award or run a mini competition?
Yes, but the basis for using either direct award or a mini competition must be clearly set out. The framework documents must set out the objective criteria which will be used to determine whether a specific contract will be placed following a mini-competition or directly on the terms set out in the framework agreement. This is to ensure that the basis of award is clear and transparent for all users and suppliers. Simply reserving a discretion to use either direct award or mini competition would not comply with the PCR and would be susceptible to challenge.
Can we add a new market entrant to our framework?
No, framework agreements are “fixed” at the point of establishment and new suppliers cannot be added. Where new market entrants are regular in a particular sector an authority could consider setting up a dynamic purchasing system rather than a framework to allow new entrants to be “added”.
Do we have to use the same criteria for mini competitions as used to award the framework originally?
No. The call-off contract should be awarded to the supplier submitting the best tender on the basis of the award criteria set out in the framework documents. Therefore, the criteria to be applied for selecting the winning bid under a mini competition should be set out clearly in the framework documents: there is no requirement that the criteria be the same as those used to select suppliers for the framework itself.
What is the automatic suspension?
Under Regulation 95, if a claim is issued in respect of a contract award decision and the contract has not yet been entered into the contracting authority must not enter into the contract (i.e. the authority is suspended from signing the contract) until:
- The Court determines to lift the suspension; or
- The substantive matter is heard by the Court and determined.
What are the time limits for bringing a claim?
The time limit for damages and interim relief claims (such as ordering the authority to re-run a process), is a limit of 30 days from the day on which the economic operator first knew or ought to have known that grounds for starting the proceedings had arisen (“the date of knowledge”). The Court has a discretion to extend this time limit where there is “good reason” to do so but only up to a maximum of 3 months from the date of knowledge. The Court has, to date, strictly interpreted the time limit.
The time limit for bringing a claim for a declaration of ineffectiveness needs to be brought within the earlier of 30 days from either the issue of an award letter to the unsuccessful bidder or publication of an award notice, or six months from the date of contract award.
What are the grounds for making a declaration of ineffectiveness?
There are three grounds on which a challenger can bring a claim for a declaration of ineffectiveness:
- Where the contracting authority has made a direct award, i.e. has awarded a contract without placing an OJEU advertisement in any case where an OJEU advertisement is required by the PCR;
- Where there has been a breach of the rules relating to the standstill period (or in breach of automatic suspension) and that breach has denied the supplier an opportunity to challenge the contract award in relation to a separate, earlier breach, and that earlier breach has affected the chances of the economic operator obtaining the contract;
- Where a call-off contract under a framework agreement with a value over the threshold has been entered into without following the relevant call-off procedures under that framework.
What are the consequences of a declaration of ineffectiveness?
The contract is effectively cancelled (on a prospective basis) and the Court must order the contracting authority to pay a civil financial penalty which is “effective, proportionate and dissuasive”. Costs and damages may also be ordered at the discretion of the Court.
Can we abandon a procurement, even after reviewing bids?
Yes, provided that the decision does not breach the basis Treaty Principles and you comply with Regulation 55(1)(b) which provides that a contracting authority shall, as soon as possible after the decision has been made, inform any bidder that submitted an offer of its decision to abandon or to recommence a contract award procedure in respect of which a contract notice has been published.
Do I need to run a process if I know there is only one provider that can meet my specification?
Regulation 32(2)(b) provides that a contract can be awarded under the negotiated without a notice (in effect, a direct award) where:
- The requirements can only be met by a particular economic operator where competition is absent for technical reasons,
- But only where no reasonable alternative or substitute exists and the absence of competition is not the result of an artificial narrowing down of the parameters of the procurement.
The Court will interpret this provision strictly so the authority should carefully document its reasons and rationale, including how it has established that no other providers can meet the requirements.
Are there any record keeping requirements we need to be aware of ?
Yes. Regulation 84 requires you to draw up a report contain the information it specifies at Regulation 84(1). [hyper link checklist?] Have a look at Regulation 84 Report Checklist for details of content requirements. In addition, Regulation 84(7) to (9) states you must document the progress of all procurement procedures, keeping sufficient documentation to justify decisions taken in all stages of the procurement, including communications with bidders, drafting of the procurement documentation, negotiations with bidders, selection and award of the contract. This documentation must be kept for at least 3 years from the date the contract is awarded.
Which rules apply after exit day on 31 January 2020?
The PCR will continue to apply until the end of the transition period (31 December 2020) – the future regime is likely to depend on the trade deal negotiated with the EU during this period.