In the Autumn edition of Building Blocks I wrote about European procurement basics, legal terms and current financial thresholds. Those definitions will tell you whether your procurement exercise is caught by the Regulations. So if you are caught by the Regulations, what next?
Prior Information Notices, the procedures and the contract notice
If you know what you want far enough in advance, issue a Prior Information Notice (PIN). This gives potential suppliers more time to prepare and allows the contracting authority to take advantage of improved time scales for the procurement exercise. Failing a PIN, something that is often used is the accelerated restricted procedure which can shorten the restricted procedure (see below) down to as little as 30 days (however citing the recession as justification for its use is not likely to be a sufficient reason).
There are four procedures that a contracting authority may follow in awarding a public contract. They are open, restricted, negotiated and competitive dialogue. Which procedure a contracting authority uses depends on the nature, complexity, timescales and spend proposed for the goods, services or works in question. The most common procedure for construction projects is the restricted procedure. The open procedure can be unwieldy which is why it is most often used where there will only be a small number of bidders. The negotiated procedure is not often used. The competitive dialogue procedure is most commonly used on public/private partnership projects which are vast and complex.
Contract notices are placed in the procurement supplement to the Official Journal of the European Union (OJEU). This can be done via the EU’s official online portal, SIMAP.
Technical specifications should be set out in the ITT (see below). In the case of a works contract, technical specifications should include all technical conditions which the contracting authority is in a position to prescribe in relation to the finished works.
Pre qualification questionnaire (PQQ) and the Invitation to tender (ITT)
When using the restricted procedure, the PQQ should elicit whether an economic operator is in a position to fulfil the contract using certain “selection” criteria. This is used to narrow down the number of economic operators who will be invited to tender. A contracting authority can disqualify economic operators from tendering based on minimum standards of economic/financial standing and technical or professional ability. The ITT should then be issued to the reduced number of economic operators. It must set out the “award” criteria (and sub criteria and sub sub criteria), marking scheme and the weightings given to each question.
The award criteria should either be based on the lowest price tender or the most economically advantageous tender (also known as MEAT). It is important to think about what you are looking for. Contracting authorities sometimes chose MEAT but then look to award a contract based on the lowest price. If you have chosen to award a contract on the MEAT basis, the quality elements must also be taken into account, which may mean awarding the contract to a tenderer who is not the cheapest.
Variant and abnormal bids
Variant bids are simply bids which offer alternatives to the requirements specified in the contract documents and may only be accepted if the contracting authority has stated in the OJEU notice that it will accept variant bids. Failure to follow this rule may result in a challenge. If you have one bidder whose price is substantially lower than all the others and there is no apparent reason for it you should investigate thoroughly. You should only accept such a bid if you have satisfied yourself that there is a good reason for it or you may find yourself either defending a procurement challenge, facing substantially creeping costs as the project progresses or untangling the mess left by an insolvent contractor.
The Mills & Reeve Procurement Portal contains up to date information on public procurement as well as a template document toolkit, frequently asked questions and decision tools. You can also sign up to receive updates to our procurement blog. See www.procurementportal.com