In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
What is the ESPD?
The ESPD is a new standard form for bidders to use when responding to prequalification questionnaires (PQQs) in public procurements. Bidders can choose to submit a completed ESPD as an alternative to filling in a PQQ.
The idea behind the ESPD is that bidders need to provide the same information in most procurements. This is particularly the case now that this is being standardised through the obligation to use the Crown Commercial Service’s standard PQQ questions (or PAS 91 for works contracts). Through the ESPD bidders will self-declare that they are not in a situation in which they must (or may) be excluded and that they meet the relevant selection criteria for the procurement.
Once filled out through the electronic ESPD service, the ESPD can be reused to respond to PQQs in multiple public procurement processes. Standardising this information in a single form should make it easier to bid. Only the winning bidder will then need to provide evidence to demonstrate that they meet the selection criteria for the contract.
What should bidders do now?
The electronic ESPD form can be found at Annex 2 of Regulation (EU) 2016/7, here.
Bidders should complete this now, so that they are in a position to decide whether to respond to future PQQs by submitting an ESPD. Bidders can still complete PQQs, but over time there will be a move to the ESPD as an alternative.
Bidders who rely on the resources of parent companies or who are proposing to use subcontractors will need to provide a separate ESPD form for each of them. Procuring authorities can ask bidders who are proposing to use subcontractors (but do not need to rely on their resources to meet the prequalification requirements) to submit an ESPD for each of those subcontractors.
Ultimately, the ESPD form will be able to be completed online for use through a free, web-based system, which is currently being developed. This will make it easier to reuse ESPDs for multiple procurements.
What do procurers need to know?
At the moment bidders complete their PQQ responses in a form provided by the procuring organisation. This is based either on the CCS Standard PQQ or PAS 91. When completing this, bidders self-declare that they meet the minimum selection requirements (pass/fail tests) for the particular procurement and usually answer (scored) questions so that all those meeting the minimum selection requirements can be “ranked”, with the top 3 or 5 (depending on the procedure) or more being invited to tender.
Under the new system, which applies from 26th January 2016, procuring organisations will need to accept an ESPD instead of their own PQQ filled in by the bidder. In the PQQ, procuring authorities will need to indicate the information bidders will need to include in the ESPD (which will be the same as the information needed to complete the PQQ).
Procurers should also include a statement setting out whether or not bidders should provide information relating to subcontractors on whose capacities they do not rely in their bid.
Should they choose to do so, a procuring organisation can choose just to ask a single question whether or not the bidder meets all of the selection criteria for the procurement. We would not recommend this for most procurements, since the process of requiring the bidders to answer each question means that they have to address them individually (making it easier to address situations where they may have failed to declare, for example, health and safety convictions).
“Selection” and “scored” questions
What is not clear under the new regime is how “scored” questions will be dealt with in an ESPD. The ESPD guidance simply repeats the wording in the Regulations on ESPDs, which refers to bidders “confirming” in the ESPD that they “fulfil the objective rules and criteria” that will be used to limit the number of tenderers. The template ESPD then asks bidders to declare that "they meet the objective and non-discriminatory criteria or rules to be applied in order to limit the number of candidates, ie tenderers, in the following way…”
The problem with this is that it is simply not possible to devise an objective pass/fail test that always limits the numbers passing to the exact number of bidders that contracting authority wants to invite to tender. It is therefore inevitable that some kind of ranking system will still need to be used.
We anticipate that, at least in the short term, contracting authorities will treat ESPDs in the same way as PQQs. Bidders will be asked to set out their “answers” to “scored” questions in the ESPD in response to the above question. This simple declaration at the end of the ESPD form will therefore need to be capable of accommodating the bidder’s answers to the variety of “scored” “selection” questions contracting authorities will want to ask. It remains to be seen whether this approach will be accepted by the European Court of Justice if it is ever challenged, or whether it will just continue unchallenged as “accepted practice”.
For more information
Please contact Andrew Millross
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