Regulation 111 – Assessing suitability etc

Commentary

A contracting authority shall not include a pre-qualification stage in a procurement.

Regulation 111 bars contracting authorities from using pre-qualification stages in the procurement of some contracts covered by Chapter 8. This constitutes a remarkable change in practice as many contracting authorities routinely use detailed pre-qualification questionnaires (and stages) to weed out candidates before tenders are submitted. It is no coincidence the UK is the Member State where the restricted procedure is used more often in Europe in relative, if not absolute terms. Paragraph 4 defines pre-qualification stage as (i) the assessment of candidates suitability to perform the contract or (ii) process of reducing the number of candidates in the procedure.

This radical approach can be understood by a desire on reducing the transaction costs involved with procurement on lower value contracts but comes at the expense of contracting authorities effectively asking similar questions during the single tender instead. This can be done as long as there is not a purpose to reduce the number of candidates who are to proceed to a later stage in the procedure (paragraph 4) and the suitability questions are relevant to the subject-matter of the contract and proportionate (paragraphs 5 and 6).

Although these caveats are welcome and provide with some balance it is important to note that the case law from the Court of Justice on the separation of qualification and tendering such as Lianakis or Ambisig does not apply here. On the latter see our comments here and here.

As with some of the previous regulations of this Part, the Minister for the Cabinet Office is provided with legal basis to issue guidance on this topic, as well as an obligation for contracting authorities to self-report any deviation without once more any indication of consequences for the lack of compliance with either the ban on pre-qualification or the reporting.

As for the guidance on this Regulation, it is yet to materialise as of December 2016.

Last modified: December 8, 2016 by Pedro Telles

111.—(1) A contracting authority shall not include a pre-qualification stage in a procurement.

(2) Where the relevant threshold for the purposes of regulation 109(1) is that mentioned in regulation (5)(1)(a) or (d), paragraph (1) of this regulation applies only if the estimated value of the procurement is less than the lower threshold mentioned in paragraph (3).

(3) The lower threshold is the threshold mentioned in—

(a)regulation 5(1)(b) where the contracting authority is a central government authority;

(b)regulation 5(1)(c) where the contracting authority is a sub-central contracting authority.

(4) In paragraph (1), “pre-qualification stage” means a stage in the procurement process during which the contracting authority assesses the suitability of candidates to perform a public contract for the purpose of reducing the number of candidates to a smaller number who are to proceed to a later stage of the process.

(5) In any event, contracting authorities may ask candidates to answer suitability assessment questions only if each such question is—

(a)relevant to the subject-matter of the procurement; and

(b)proportionate.

(6) In paragraph (5), “suitability assessment question” means a question which relates to information or evidence which the contracting authority requires for the purpose of assessing whether candidates meet requirements or minimum standards of suitability, capability, legal status or financial standing.

(7) In complying with this regulation, contracting authorities shall have regard to any guidance issued by the Minister for the Cabinet Office, which may include guidance on how to establish and assess, without infringing paragraph (5), whether candidates meet requirements or minimum standards relating to suitability, capability, legal status and financial standing.

(8) Where a contracting authority conducts a procurement in a way which represents a reportable deviation from the guidance issued under paragraph (7), the contracting authority shall send to the Cabinet Office a report explaining the deviation.

(9) For that purpose, something is a reportable deviation only if it falls within criteria laid down for that purpose in guidance issued under paragraph (7).

(10) In this regulation, “candidate” means an economic operator that wishes to be considered for the award of a public contract.