Guidance to be read in conjunction with the Public Contracts Regulations, 2015 (PCR'15) is being issued thick and fast. We reported the new requirements for advertising below threshold contracts on Contracts Finder in the last edition of Procurement Pulse. In this edition we look at guidance which has been published by the Crown Commercial Service in the interim. We also look at an interesting case on conflict of interest - an area in relation to which guidance is anticipated, but not yet published. Further areas in which guidance is expected include e-procurement solutions (regulation 22), procedures for applying lotting requirements (regulation 46), and model contract clauses to provide for any termination on procurement breach (regulation 73). We will keep you up to speed with the new guidance in future issues of the Pulse.

C-538/13 - eVigilo Limited .v. Priesgaisrines apsaugos ir gelbejimo departamentas

Technical experts from the University of Kaunas drew up tender documents, and evaluated returned tenders for the procurement of a public warning system. The successful tenderer also used University of Kaunas experts to assist in putting together its bid. eVigilo challenged on the basis that the letting authority had not taken steps to avoid a conflict of interest. The court stated - "A conflict of interest entails the risk that the contracting authority may choose to be guided by considerations unrelated to the contract in question, and that on account of that fact alone preference may be given to a tenderer." On the basis that contracting authorities must take an "active role" in applying the EU Treaty obligations of transparency and equal treatment - "it follows that the contracting authority is …required to determine whether any conflicts of interest exist and to take appropriate measures to detect and prevent conflicts of interest. It would be incompatible with that active role for the applicant to bear the burden of proving … that the experts appointed by the contracting authority were in fact biased."

The court found that, if a contracting authority cannot prove that it has taken measures to detect and mitigate a conflict of interest, then an evaluation process might be unlawful, solely on the ground that a tenderer also had significant connections with experts appointed by the contracting authority to evaluate tenders.

PCR '15 regulation 24 requires contracting authorities to "take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures". The February 2015 brief guide to PCR '15 - see below - advocates authority staff signing declarations that they have no outside interests with bidders, as one approach to detecting potential conflicts. We would also advocate the practice of providing instruction to tenderers in the ITT on "ethical walls" - where one organisation is involved both in submitting a bid to the Authority, and also providing other services to the Authority.

A brief guide to the EU Public Contracts Directive (2014) - February 2015

This document is part of the Crown Commercial Service training package on the new EU directives. An e-learning package will be available shortly. It is useful for those who need to get up to speed on the new rules quickly. For defence-related procurements, the guide includes two useful flowcharts to assist with determining whether the Defence and Security Public Contracts Regulations, 2011 or PCR '15 apply.

Guidance on the new light touch regime (LTR) - 5 March 2015

LTR applies to contracts for services considered unlikely to have cross-border interest, and which have a value in excess of 750,000 Euro. The relevant ser vices are listed in schedule 3 to PCR '15. Apart from formal rules to advertise such contracts in the Official Journal and publish a contract award notice, contracting authorities can (subject to the EU Treaty principles of transparency and equal treatment) structure their procurement procedure as they please. The guidance gives useful examples of how the EU Treaty principles might apply in practice:

  • Clear rules for the procedure must be set out in the procurement documents, and properly adhered to.
  • Time limits imposed on tenderers must be reasonable and proportionate to the size and complexity of the contract. 
  • Award criteria, sub-criteria and weightings must be clearly specified. 
  • The mandatory rules for exclusion of bidders do not apply by law to the LTR, but should be applied as a matter of sensible business practice - the same applies to PCR '15 selection criteria. 
  • Part 4 of PCR '15, which promotes SME involvement in procurement processes (eg advertising on Contracts Finder and avoiding unnecessarily burdensome pre-qualification processes) apply to LTR procurements. 
  • As a matter of good practice, a standstill period should be provided for after contract award. Further guidance will be issued on standstill and remedies. 
  • PCR '15 specifically allows the needs of different categories of user, and the involvement and empowerment of users, to be used as award criteria in LTR procurements. The guidance raises the issue of whether user choice can be incorporated into the evaluation process. Provided end users are given the same rights to influence the choice of final provider and this is made clear to all bidders in the procurement documents, the guidance considers this to be an acceptable practice.

LTR replaces the previous part B services regime. Part B services (as listed in PCR '06) are now either fully regulated, excluded from the ambit of PCR '15 altogether, or subject to the LTR.

Statutory guidance for paying undisputed invoices within 30 days - March 2015

Government is committed to creating a "supportive environment in which ambitious businesses can flourish". PCR '15 regulation 113 requires contracting authorities to ensure that all contracts they enter into include at least 30 day payment terms, and that sub-contracts to those contracts include equivalent terms. Model payment drafting is included in the guidance. To the extent that suitable clauses are not included in contracts and related sub-contracts, 30 day payment terms will be implied by law into those contracts (regulation 113(6)).

New requirements relating to pre-qualification questionnaires - 9 March 2015 : In the spirit of cutting back on bureaucracy and creating efficiencies for SMEs, regulation 111 of PCR '15 precludes contracting authorities from including PQQs in below threshold procurements. Instead contracting authorities can ask "suitability assessment questions". A standard PQQ is provided for above threshold procurements. Contracting Authorities can choose questions within the PQQ which are relevant to their procurement, and spot checks (through the Mystery Shopper Scheme) will be carried out to ensure that contracting authorities do not deviate from the standard wording. From 1 September 2015, the rationale for any deviations from standard wording must be reported to the Crown Commercial Service (for information only) within 30 days of issue of the PQQ. There is useful guidance on the new "self cleaning" process for mandatory and discretionary exclusion offences, and the approach to bidder self-certification.

Guidance on forms to use during transition period before EU standards are revised - 27 February 2015

This document includes a summary of the forms that are required in order to undertake one of the procurement procedures set out in PCR '15, and a link to the specific guidance for completing the form and notice for that procedure.

PPN 04/15 Taking account of suppliers past performance - 25 March 2015

This PPN replaces PPN 09/12, and will apply to contracts with a value of £20 million or more for IT, facilities management or business process outsourcing - which are advertised in the Official Journal on or after 1 April 2015. It applies to framework agreements where the anticipated value of call-offs is £20 million or more. The PPN relies on PCR '15 regulation 58(18) which provides that criteria for selecting bidders can have regard to their "skills, efficiency, experience and reliability". Regulation 58(16) allows compliance with selection criteria to be assessed by reference to "suitable references from contracts performed in the past." Positive references are generally easy to come by. The standard form reference which contracting authorities are required to submit to a central Crown Commercial Service database (and which tenderers have requested from previous "employers" in connection with past contracts) excludes liability for any damage caused by providing information on poor performance, but referees may still think twice about providing a poor reference. The type of information that a contracting authority (or private sector body, if a contractor asks for a reference in connection with a private sector contract) is required to provide include delay, failure to comply with performance standards and any other failure to comply with contractual obligations. References will only be requested in connection with a tenderer's principal relevant contracts carried out in the three years prior to the procurement, and the PPN encourages contracting authorities to verify whether any list of contracts provided by a tenderer is comprehensive. The PPN provides the opportunity for tenderers to "self-clean"; so a poor reference will not be taken into account in the evaluation process if there is evidence that the reasons for the poor reference will not recur if the tenderer were to be awarded the contract. Extensive standard wording is included in the PPN for inclusion in the OJEU notice, PQQ and other procurement documentation, as well as guidance on how to evaluate references submitted. Ultimately it is up to the contracting authority to take a view on whether or not past performance will impact the contract in procurement, notwithstanding that the same issues might, at that time, be subject to court or arbitration proceedings.