The New Public Contracts Paperchase – it’s complicated!

The SME-supporting legislation in Part 4 of the Public Contracts Regulations 2015 incorporates the recommendations of Lord Young in his three reports for Government on improving SME success on winning public contracts.  Significant changes affecting contracting authorities in England relate to advertising contract opportunities.

Under the new regime:

• contracts valued above the applicable tendering threshold must be advertised both on OJEU and the Government’s Contracts Finder website;
• awards of “above-threshold” contracts must be advertised on both OJEU and Contracts Finder;
• call-offs of both “above-threshold” and “below-threshold” contracts from a framework agreement, which was itself tendered via OJEU, must be advertised on Contracts Finder;
• awards of contracts valued between £25,000 and the relevant tendering threshold must be advertised on Contracts Finder; and
• contracts with a value between £25,000 and the relevant tendering threshold must also be advertised on Contracts Finder, where they are advertised elsewhere.

These Contracts Finder, contract-award advertisements can be grouped on a quarterly basis.

Eventually, the aim is to have an automatic link from OJEU to Contracts Finder –some portal providers do already do this.  Until this automatic link is established, those using other portals will need to input in both places.

The order in which contracts have to be advertised on the various websites is complex.  Below-threshold contracts must be advertised on Contracts Finder within 24 hours of an advertisement being placed elsewhere.  The EU rules say that above- threshold contracts have to be advertised on OJEU first, or at least 48 hours must have elapsed from when the notice was submitted before an advertisement can be placed elsewhere, including on Contracts Finder. Consequently, adverts on Contracts Finder for above-threshold contracts must be submitted within 24 hours of the publication of the OJEU notice or (if earlier) between 48 and 72 hours of the notice having been submitted to OJEU.

The advertising of a contract on OJEU or Contracts Finder triggers the obligation to make the procurement and contract documents freely available online.  For above-threshold contracts, the “procurement documents” must be made available. These comprise both the contract documents (the specification, payment mechanism, KPIs, contract conditions etc) and all documents relevant to the procurement process (other than where genuinely confidential, such as TUPE information) including at least the PQQ, ITT and tender submission documents.  For below-threshold contracts the term used is the “contract documents” that must be made available.  These are ‘those documents intended by contracting authorities to be taken into account by bidders when tendering’.  In practice, these are likely to be the same as the procurement documents for an above-threshold contract.

Other changes intended to benefit SMEs include the standardisation of PQQ questions and the prohibition of a PQQ stage for below-threshold contracts. Template PQQ questions have been issued by the Cabinet Office, which must be used for all above-threshold tenders (and any deviations from them reported to the Cabinet Office).  This “one size fits all” PQQ still allows for bespoke “project specific” questions though.  It is clear from other Cabinet Office guidance, such as that on “Taking Account of Suppliers’ Past Performance”, that “project specific” questions do not need to relate specifically to the contract being procured but can be more generic.  On this basis, the use of “project-specific” questions and individually-considered answers sounds very much like PQQ “business as usual” to us, falling short of the desire to simplify PQQs that both the European Commission and Lord Young were hoping for.

A PQQ stage is now prohibited for contracts valued below the EU services and supplies tendering threshold, although “suitability assessment questions” can be asked.  This means that SMEs will need to submit fully priced tenders when they are competing against significantly more bidders at tender stage than when a PQQ process was used and they knew they were one of only three or four tenderers.  This just makes it harder for SMEs to decide which contracts it is worth tendering for.

Only time will tell if these reforms achieve their intended objectives and whether benefits to SMEs are worth the additional burden on contracting authorities.  In the meantime the Small Business, Enterprise and Employment Act 2015, enables the Government to place even more duties on contracting authorities relating to procurement timescales, document availability, payment mechanisms and reporting. Even before these duties come into force, procurers will be experiencing a significant increase to their workload as a result of PCR 2015.  If they are not, the chances are that they are not following the new rules.

Contact Andrew Millross or Beulah Allaway – beulah.allaway@anthonycollins.com.

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