On 8 November 2012, the Cabinet Office published a Procurement Policy Note (“PPN”) setting out the government’s policy to ensure that a bidder’s past performance is taken into account in certain future public procurements.  There has been no consistent approach to considering previous performance in assessing a bidder’s ability to perform a contract.  The government has now published the PPN to ensure that, in certain cases, public bodies will now be required to include minimum standards for reliability based on past performance.  As a result, suppliers will now be required to give more detailed information and should expect that such information will be carefully checked within government.

The PPN applies to Departments, Executive Agencies and Non Departmental Public Bodies (together, “Departmental Bodies”) procuring goods and/or services in respect of information and communications technology, facilities management or business processing outsourcing with a total anticipated value of £20 million or more (excluding VAT).  It also applies to framework agreements where it is anticipated that there will be call-off agreements in respect of such goods and/or services with an individual anticipated value of £20 million or more (excluding VAT). 

A summary of the PPN guidance is set out below.

Minimum standards for reliability based on past performance

In order to assess a bidder’s past performance, Departmental Bodies should:

  • include wording in all relevant procurement documentation, such as PQQs and ITTs, to ensure that bidders are aware of the government’s approach to managing supplier performance and of the conditions of entry to the procurement.  Template wording is provided in the PPN;
  • ensure that sufficient early market engagement takes place before publication of the OJEU notice to attract a broad range of suppliers;
  • specify the minimum standards relating to past performance and information required in relation to those standards in the OJEU notice.  Template wording and related guidance are provided in the PPN;
  • incorporate the same minimum standards and request for evidence from bidders in other documentation relating to the selection stage;
  • verify information provided by any bidder in relation to past performance by checking with any reasonably available source of information and giving the bidder an opportunity to make representations on any further information obtained (see Cabinet Office new central repository of certificates below);
  • apply the minimum standards for reliability based on past performance to exclude bidders which fail to meet them;
  • assess whether a bidder continues to meet the minimum standards for reliability at specified subsequent stages in the procurement process, particularly in complex or lengthy procurement processes, by including appropriate wording in the OJEU notice and asking bidders to update the evidence provided at an earlier selection stage; and
  • include provision in new framework agreements and related OJEU notices to allow the framework agreement owner to re-assess a supplier’s compliance with the minimum standards upon request from any framework agreement user prior to the proposed award of the call-off agreement with a value of £20 million or greater (excluding VAT).  New framework agreements should also include contract conditions to ensure that a supplier will not be eligible for a call-off agreement under a framework agreement if it does not comply with the specified minimum standards for reliability at the time of the proposed award of the call-off agreement.  Template framework agreement wording is provided in the PPN. 

In relation to existing framework agreements, where supplier performance issues become apparent, framework agreement owners and users are advised to work together to ascertain the scope of action possible under the terms of the framework agreement.

Information necessary for evaluating requirements

The Cabinet Office will be establishing a central repository of certificates and other information to enable Departmental Bodies to show that bidders meet the minimum standards for reliability.  Departmental Bodies (in their capacities as customers) will be required to provide certificates to their suppliers upon request and to send a copy of the certificate to the Cabinet Office.  A template certificate is provided in the PPN.

To demonstrate compliance with the minimum standards for reliability based on past performance, bidders are required to provide:

  • a list comprising a statement of the principal goods sold and/or services provided by the bidder in the previous three years.  Bidders (including consortia or group entities) are entitled to satisfy the minimum standards for reliability by reference to the past performance of members of a consortium or other group entities; and
  • certificates from those to whom the goods and/or services on the list were provided.  If the certificate does not state that the goods and/or services provided satisfactorily, bidders are required to provide information to show that the reason for such failure will not recur in the performance of the contract being procured.  In the event that a certificate cannot be obtained, the supplier may provide a self-certification. 

Conclusion

The PPN applies from 8 November 2012 to the award of all stand alone public contracts and framework agreements covered by its scope for which an OJEU notice has not yet been published.  It should be noted, however, that although the application of minimum standards for reliability is important, it is only one aspect of the overall assessment of the suitability of bidders in any procurement.  The other requirements of technical or professional ability and economic and financial standing should continue to be assessed for all bidders who have met the minimum standards of reliability. 

Please click for the text of the PPN