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This is the next briefing in our series of ebriefings on the Government’s Green Paper: Transforming public procurement, looking at the Chapter 4 proposals in relation to the selection (prequalification) of tenderers.
New exclusion grounds
New exclusion grounds are being proposed. These include failing to disclose beneficial ownerships, fraud against the UK’s financial interests, tax evasion, deferred prosecution agreements and non-payment of taxes (the last of these illustrating the central government focus of many of the Green Paper proposals). None of these will make much difference to most procurements, especially as tenderers can already be excluded for 'grave professional misconduct'.
We did question though whether the time limits for exclusions were long enough. We suggested longer exclusion periods (for both mandatory and discretionary ineligibility). We also suggested that contracting authorities should have absolute discretion to decide whether to accept self-cleansing (rather than risk a challenge if they considered it was “not sufficient”).
The proposals include more central management of the selection process. This has not really taken off in England and Wales, other than in relation to Constructionline.
A central record of eligibility, latest accounts and relevant certificates and accreditations makes sense. This should be free for suppliers to join; otherwise smaller contractors may be excluded. We also welcomed the proposal for a centrally managed debarment list but made the point that contracting authorities should also be free to set such additional selection criteria as they consider appropriate.
There are two aspects of these proposals for selection that we particularly welcomed. The first is to able to take more account of the past performance of tenderers. However, this should go much further than was being proposed. Rather than just treating this as a 'pass/fail' test, contracting authorities should be able to use past performance:
- as a 'scored' question when deciding which of the tenderers meet the minimum selection standards to invite to tender; and
- as part of the award criteria, where greater marks can be given to tenderers who have delighted their existing customers sufficiently for those customers to give them excellent references.
To enable this, contracting authorities will need to be able to give fair and honest (and potentially anonymous) references for their existing contractors without fear of reprisals from those contractors.
The second element of these proposals that we particularly welcomed was to remove the limits on the information that could be asked for at selection stage.
Currently, the information contracting authorities can ask for in order to evaluate the financial strength of tenderers is very limited. Contracting authorities should have access to all information that may be relevant, both financial and non-financial. In particular, contracting authorities should be able to undertake credit reference agency checks and to take references from other clients as to the quality of a tenderer’s performance.
What happens next
The consultation has now closed. We included these comments in our response to the consultation paper, which we submitted on 10 March 2021. We are now awaiting with interest the Government’s detailed proposals following the consultation.
For more information
For further information in relation to any of the above, please contact your relevant ACS contact or Andrew Millross.
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