Given high profile failures to perform public contracts, it is not surprising that the Cabinet Office has issued a new Procurement Policy Note on taking account of bidder’s past performance.

The PPN applies to new contract procurements (i.e. where an OJEU is issued after 8 November 2012) by Government Departments, their Executive Agencies and Non Government Public Bodies (“the Government Bodies”)  of goods and/or services and framework agreements where the anticipated value of the contract or at least one individual call-off is over £20 million in respect of:

  • Information and communications technology.
  • Facilities management.
  • Business processing outsourcing.

It is open to other contracting authorities to follow the PPN with appropriate modifications and the PPN reinforces the need for pre-procurement market engagement to ensure a wide pool of quality bidders are attracted to the procurement.  This position was advocated in the earlier PPN "Presumption against competitive dialogue".

The PPN is clear that the underlying Treaty principles of equal treatment, non-discrimination and transparency must be complied with and addresses key issues such as:

  • Minimum standards that bidders must meet and information needed to evidence this to be stated in the OJEU notice.  
  • OJEU notices and tender documentation to require bidders to provide a list of principal relevant sales in the last 3 years with certificates (confirming satisfactory performance) from the relevant customers or self certification. Bidders must explain why any failures in performance will not recur in performing the contract now being procured.
  • Assessing reliability of consortium members and sub-contractors as well as lead providers.  
  • Government Bodies can verify bidder information but must state how this will be done and do so following Treaty principles. Bidders have an opportunity to make representations or to provide further information before any decision against the bidder’s interest is taken.
  • Re-assessing bidder suitability throughout the procurement process should be expressly included. Framework agreements should contain contractual terms to ensure that this check of suitability is carried out in relation to any relevant call-off.

Two other implications apply to Government Bodies as a result of the PPN:

  • They will need to issue performance certificates on request and Cabinet Office will maintain a central register that can be referred to by Government Bodies for verification.  
  • They should have an appropriately qualified panel to determine bidders’ abilities to meet minimum standards for professional and technical ability, seeking legal advice where appropriate. The PPN envisages that minimum standards of reliability are assessed first followed by other assessments of technical and professional ability.

For other contracting authorities you will need to be prepared to consider providing certificates on request from bidders as they seek to satisfy the requirements in the PPN.

The reinforcement in the PPN for the need for equal treatment and transparency is very welcomed and a key area for all contracting authorities in following this process will be the verification and decisions taken to disqualify if the authority is not convinced of the reliability of the bidder. Given the high value of the contracts that the PPN applies to we can reasonably expect challenges will flow from this if the principles are not applied.