Regulation 59 – European Single Procurement Document

Commentary

Regulation 59 PCR2015 transposes Article 59 of Directive 2014/24 concerning the European Single Procurement Document (ESPD), which attempts to reduce the red tape involved in the participation of public procurement processes and brings us one of the big changes introduced by Directive 2014/24/EU and the new Regulations: the possibility of using a self-declaration by economic operators instead of having all participants providing all the documentation at the selection stage. It is worth noting that the European Commission has adopted implementing rules in Commission Implementing Regulation (EU) 2016/7 establishing the standard form for the European Single Procurement Document, and that the ESPD service is already available here.

Article 59 of Directive 2014/24/EU introduces a significant attempt to flexibilise documentary requirements and to reduce red tape in public procurement by means of the ESPD (ie a collection of self-declarations) and other facilitating measures (for discussion, including the abandoned proposal for a European Procurement Passport, see A Sanchez Graells, “Are the Procurement Rules a Barrier for Cross-Border Trade within the European Market? — A View on Proposals to Lower that Barrier and Spur Growth” in C Tvarnø, GS Ølykke & C Risvig Hansen (eds), EU Public Procurement: Modernisation, Growth and Innovation (Copenhagen, DJØF, 2012) 107, 121-126).

Under this new system, economic operators will be able to submit an ESPD ‘consisting of an updated self-declaration as preliminary evidence in replacement of certificates issued by public authorities or third parties confirming’ that they are not affected by exclusion grounds, that they meet selection and short-listing criteria (as applicable) and that they will be able to produce hard documentary evidence of such circumstances without delay, upon request of the contracting authority (Article 59(1)). 

Indeed, the ESPD ‘shall consist of a formal statement by the economic operator that the relevant ground for exclusion does not apply and/or that the relevant selection criterion is fulfilled and shall provide the relevant information as required by the contracting authority. The ESPD shall further identify the public authority or third party responsible for establishing the supporting documents and contain a formal statement to the effect that the economic operator will be able, upon request and without delay, to provide those supporting documents’. 

Moreover, where the contracting authority can obtain the supporting documents directly by accessing a database pursuant to Article 59(5) of Directive 2014/24/EU, the self-declaration shall also contain the information required for this purpose, such as the internet address of the database, any identification data and, where applicable, the necessary declaration of consent. In order to try to increase the advantages of the ESPD, it is conceived as a ‘reusable’ instrument, so that ‘[e]conomic operators may reuse an ESPD which has already been used in a previous procurement procedure, provided that they confirm that the information contained therein continues to be correct’. 

The contracting authority will then be free to request submission of such documents at any point of the process where this appears necessary to ensure the proper conduct of the procedure and, in any case, shall require them from the chosen contractor prior to awarding the contract, unless it already possesses these documents or can obtain these documents or the relevant information by accessing a national database (Article 59(4)). Although this is a self-declaration, economic operators should inform in it where the documents that provide evidence can be obtained and its commitment to do so “upon request and without delay” (paragraph 4 and 8). It remains to be seen what it means “upon request” – ie, can it be a general condition of participation set from the start? – or “without delay” – how many days will economic operators have to provide the documents? When Pedro ran the simplified open procedure pilots in Wales, they had a similar system in place that established a 10 calendar day window for the contract winner to provide the documentation and never had any problems. In fact, most replied within 24 or 48 hours with the documents.

As a complementary facilitating measure, Article 59(5) of Directive 2014/24/EU foresees that: ‘economic operators shall not be required to submit supporting documents or other documentary evidence where and in so far as the contracting authority has the possibility of obtaining the certificates or the relevant information directly by accessing a national database in any Member State that is available free of charge, such as a national procurement register, a virtual company dossier, an electronic document storage system or a pre-qualification system.  For [that]purpose … Member States shall ensure that databases which contain relevant information on economic operators and which may be consulted by their contracting authorities may also be consulted, under the same conditions, by contracting authorities of other Member States’. This reverses the onus of who needs to provide/find the documents from the operator to the authority. This is compounded by the fact that if the contracting authority already has a valid and actual EPSD from the economic operator then it should regularly not need to re-confirm the information contained on it.

As a complement, and according to Article 59(6) of Directive 2014/24/EU, ‘Member States shall make available and up-to-date in e-Certis a complete list of databases containing relevant information on economic operators which can be consulted by contracting authorities from other Member States. Upon request, Member States shall communicate to other Member States any information related to the databases referred to in this Article’. Moreover, according to Article 61(1) of Directive 2014/24/EU, ‘With a view to facilitating cross-border tendering, Member States shall ensure that the information concerning certificates and other forms of documentary evidence introduced in e-Certis established by the Commission is constantly kept up-to-date’. 

It should be recalled that failure to provide the required documentation in support of the self-declarations submitted by the economic operator will constitute a discretionary ground for exclusion (Article 57(4)(h)), which the contracting authority can apply any time (Article 57(5)). In that regard, the system seems too lenient towards the failure to support any of the prior declarations. Under the initial 2011 proposal for a new Directive, it would generate an impediment to award under Article 68, now suppressed. Indeed, it is hard to understand why contracting authorities would be free to award the contract to an economic operator that cannot support its own self-declarations and how that would not infringe the principles of transparency, equal treatment and non-distortion of competition. In our view, this should constitute a case of mandatory exclusion of the economic operator concerned, unless there were good reasons beyond its control that prevented it from submitting the required documentation. 

As it stands, the ESPD raises an enormous risk particularly in countries where participation or performance bonds are not used extensively (ie UK) or where pre-contractual liability is not well established (ie England and Wales). It leaves open the door for collusion between economic operators who partake in a procedure and then decide not to provide the necessary documentation to sign the contract (assuming it is not available on a database). The contracting authority will be tempted to go straight to the second best offer on the table which, in turn, in a collusion scenario, can do exactly the same. The solution for this problem is simply to either include a bond (which has the downside of affecting SMEs) or to include the possibility of abandoning the procedure going back to the start.

More generally, this rather revolutionary proposal (revolutionary at least for countries with ‘traditional’ administrative procedure regulations) for the acceptance of the ESPD (rectius, ‘mere’ self-declarations) clearly has the potential to reduce the costs of participating in the tender for unsuccessful bidders (increasing the incentive to participate), but generates a relatively small advantage for successful bidders (only a time gain, and of an uncertain length at that), while increasing the length of the procedure (there is no regulation concerning the time that the authority must give the successful tenderer to produce the requested documents prior to award) and generating a risk of potential award to non-compliant bidders that would require second or ulterior awards (with the corresponding difficulties regarding the need to ensure that other bidders keep their offers open, new award notices, etc). These risks are identified in the Commission’s Impact Assessment of the Proposal for a Directive of the European Parliament and of the Council on Public Procurement (page 70), but simply dismissed on the hope that self-declarations would bring a significant reduction of time and costs and a potential automatisation of selection and award procedures. 

There has been some criticism of the ESPD in Wales as it renders (almost?) obsolete the Supplier Qualification Information Database (SquID), a solution created in Wales to solve the PQQ problem. The SQuID is composed by a bank of questions that contracting authorities can set for a selection stage and the accompanying answers provided by the economic operators, foreclosing the need for answers to be re-entered. The difference between the ESPD and SQuID is that the first is pan-European and cross-border, solving the whole problem for most countries, although it looks alien in a country where the selection stage is composed by very detailed questions instead of an enunciation of selection criteria. The second solves the symptoms caused by a “best practice” arising from asking way too many questions at the selection stage, but not the cause, that is using the transaction costs of the selection stage to filter out economic operators before the tender stage. The first solution makes sense in many countries and looks alien in the UK, whereas the second is the other way around.

In any case, in order to complete the regulation of the ESPD, it would be necessary to set speedy but reasonable time limits to produce the requested documents and to strengthen the consequences of failing to produce supporting evidence for the self-declarations, which should not only be an impediment to award, but also be clearly identified as a ground for mandatory exclusion.

Moreover, failure to back a self-declaration / ESPD submission should be expressly set as a head of damage that allows contracting authorities to recover any additional expenses derived from the need to proceed to a second-best, delayed award of the contract (without excluding the eventual enforcement of criminal law provisions regarding deceit or other types of fraud under applicable national laws). 

Also, rules on annulment of the awarded contract and other sanctions are needed for those instances where the discovery of the falsity of the documents occurs after contract award—since this case is not fully covered by the provision of Article 73(b) of Directive 2014/24/EU, which only requires that contracting authorities have the possibility to terminate a public contract during its term, where it turns out that ‘the contractor has, at the time of contract award, been in one of the situations referred to in Article 57(1) and should therefore have been excluded from the procurement procedure’. Hence, if the self-declaration that the economic contractor has been unable to support is not concerned with Article 57(1), there is not even an indirect way to challenge (at least clearly) the award of the contract despite the infringement of Article 59(4) of Directive 2014/24/EU. Challenges under domestic contract rules governing misrepresentations or falsity in private documents should be available in this case, but it would have been desirable that the new rules included a specific termination clause in this case in Article 73.

Proposed citation: Albert Sanchez-Graells & Pedro Telles, (2016) Commentary to the Public Contracts Regulations 2015, available at: www.pcr2015.uk.

Last modified: September 5, 2016 by Pedro Telles

Use, content and form of the ESPD

59.—(1) At the time of submission of requests to participate or of tenders, contracting authorities shall accept the European Single Procurement Document, consisting of an updated self-declaration as preliminary evidence instead of certificates issued by public authorities or third parties confirming that the relevant economic operator fulfils the following conditions:—

(a) it is not in one of the situations referred to in regulation 57 in which economic operators shall or may be excluded;

(b) it meets the relevant selection criteria that have been set out under regulation 58;

(c) where applicable, it fulfils the objective rules and criteria that have been set out under regulation 65.

(2) Where the economic operator relies on the capacities of other entities under regulation 63, the ESPD shall also contain the information referred to in paragraph (1) in respect of such entities.

(3) The ESPD shall consist of a formal statement by the economic operator that the relevant ground for exclusion does not apply and, or alternatively, that the relevant selection criterion is fulfilled and shall provide the relevant information as required by the contracting authority.

(4) The ESPD shall further identify the public authority or third party responsible for establishing the supporting documents and contain a formal statement to the effect that the economic operator will be able, upon request and without delay, to provide those supporting documents.

(5) Where the contracting authority can obtain the supporting documents directly by accessing a database as mentioned in paragraph (11), the ESPD shall also contain the information required for this purpose, such as the internet address of the database, any identification data and, where applicable, the necessary declaration of consent.

(6) Economic operators may reuse an ESPD which has already been used in a previous procurement procedure, provided that they confirm that the information contained in it continues to be correct.

(7) The ESPD shall be provided exclusively in electronic form.

Supporting documentation

(8) A contracting authority may require candidates and tenderers at any moment during the procedure to submit all or any of the supporting documents where this is necessary to ensure the proper conduct of the procedure.

(9) Before awarding the contract, the contracting authority shall, except in respect of contracts based on framework agreements where such contracts are concluded in accordance with regulation 33(7) or (8)(a), require the tenderer to which it has decided to award the contract to submit up-to-date supporting documents in accordance with regulation 60 and, where appropriate, regulation 62.

(10) The contracting authority may invite economic operators to supplement or clarify the certificates received under regulations 60 and 62.

(11) Despite paragraphs (8) and (9), economic operators shall not be required to submit—

(a) supporting documents or other documentary evidence where and in so far as the contracting authority has the possibility of obtaining the certificates or the relevant information directly by accessing a national database in any member State that is available free of charge, such as a national procurement register, a virtual company dossier, an electronic document storage system or a prequalification system; or

(b) a supporting document which the contracting authority already possesses.