On 11 July 2014, the Crown Commercial Service (“CCS”) published a Procurement Policy Note (PPN 08/14) with an updated standard form of Pre-Qualification Questionnaire(PQQ) to replace the existing standard PQQ contained inPPN 01/12: Use of Pre-Qualification Questionnaires.
The PPN applies to all Central Government Departments, Executive Agencies and Non-Departmental Public Bodies (together Departmental Bodies). However, all other contracting authorities (e.g. in local government and the wider public sector) are strongly encouraged to apply the measures set out in PPN 08/14. The PPN does not apply to construction procurements, for which PAS 91 should continue to be used.
The revised standard PQQ reflects government policy changes in the areas of tax compliance for procurements over £5 million and bidders’ past performance for certain services procurements over £20 million. A summary of the main changes is set out below.
The revised standard PQQ includes new questions on tax compliance for all procurements which have or are likely to have a value of £5million or over in accordance withPPN 03/14: Promoting Tax Compliance. Potential suppliers will now be required to self-certify their tax compliance history as part of the procurement history by declaring:
- a criminal conviction for tax related offences or a penalty for civil fraud or evasion; and/or
- tax returns found to be incorrect as a result of:
- HMRC successfully challenging them under the General Anti-Abuse Rule (“GAAR”) or the “Halifax” abuse principle; or
- a tax authority in any jurisdiction in which the supplier is established successfully challenging them under any tax rules or legalisation that have an effect equivalent or similar to the GAAR or the “Halifax” abuse principle; or
- the failure of an avoidance scheme which the supplier was involved in and which was, or should have been, notified under the Disclosure of Tax Avoidance Scheme or any equivalent or similar regime in a jurisdiction in which the supplier is established.
If a supplier answers “yes” to any of the above questions, the supplier may provide details of any mitigating factors (for example, corrective action or changes in financial, accounting, audit or management procedures) including information on the non-compliant activity that may be relevant. Departmental Bodies will evaluate the information provided before making a decision on whether to exclude a supplier from the process.
A Bidder’s Past Performance
The revised PQQ builds upon government policy to ensure that a bidder’s past performance is taken into account in certain future procurements in accordance with PPN 09/12: Taking Account of Bidders' Past Performance.
The revised PQQ core question on a bidder’s past performance applies to Departmental Bodies procuring goods and/or services in respect of information and communications technology, facilities management or business processing outsourcing procurements 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).
In those cases where the measure applies, Departmental Bodies are required to ask for specified information (which includes certificates of performance) about a bidder’s past performance in the last 3 years.
Impact of the Changes
The PPN applies from 3 July 2014. As a result, in certain procurements, suppliers will now be required to give more detailed information and should expect that such information will be carefully checked within government. The onus will be on suppliers to ensure consistently good delivery of services and tax compliance.
The CCS intends to introduce a new approach to assessing a bidder’s suitability upon transposition of the new EU procurement directives into UK law. This is intended to reflect the Lord Young reforms on improving access to public contracts for SMEs.