Regulation 65 – Reduction of the number of otherwise qualified candidates to be invited to participate

Commentary

Regulation 65 PCR2015 transposes Article 65 of Directive 2014/24 on the rules applicable to the reduction of the number of otherwise qualified candidates to be invited to participate. The content of Article 44(3) Directive 2004/18/EC has been moved to Art 65 of Dir 2014/24, without significant changes, other than some minor drafting corrections and an update of the cross-references to other parts of the Directive.

As in the past, the minimum number of qualified candidates a contracting authority may take forward in case of a restricted procedure is five and the competitive dialogue three. In the new competitive procedure with negotiation is also three and in the innovation partnership, theoretically three, but as argued in the commentary to Regulation 31 the partnership can be designed with only one in mind. It means that the contracting authority may exclude all other qualified candidates other than the number it said it would take forward.

Contracting entities must ‘indicate, in the contract notice or in the invitation to confirm interest, the objective and non-discriminatory criteria or rules they intend to apply’ to short-list candidates (Regulation (2) PCR2015 and Article 65(2) of Directive 2014/24/EU. Once the short-listing is completed, they must invite a number of candidates at least equal to the minimum number and where the number of candidates meeting the selection criteria and the minimum levels of ability is below that minimum, they may continue the procedure by inviting the candidates with the required capabilities but ‘the contracting authority shall not include economic operators that did not request to participate, or candidates that do not have the required capabilities’ (Regulation 65(8) PCR2015 and Article 65(2) in fine of Directive 2014/24/EU.

As the reduction should occur based in “objective and non-discriminatory criteria or rules” which by definition will be focused on the qualities of the candidate and not its future bid, this puts SMEs at a big disadvantage position. If only the X best candidates are to be selected and the criteria will reflect financial requirements (including insurance…), experience and more importantly capacity, smaller suppliers will always be at a disadvantage.

The above does not preclude the contracting authority advancing with a smaller number in case only say 2 candidates are good enough to be qualified (paragraph 7). It is interesting to note that there is no competition protection exception to this rule. Stating the procedure should not go ahead with only one qualified supplier would be the same as making an undertaking’s ability for a contract dependent on other people with the right set of qualifications. “Enough participants” would be an added “selection criteria” and one that each economic operator has zero control on. For all the competition risks, contracting authorities can still pull the plug if they so wish but they are not under the obligation of do so.

For further discussion, see A Sanchez-Graells, Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 312-315 and based on the Directive 2004/18/EC, see P Telles, Competitive Dialogue in Portugal and Spain (2010), Chapter 3 available at http://ssrn.com/abstract=2308502.

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

Reduction of the number of otherwise qualified candidates to be invited to participate

65.—(1) In restricted procedures, competitive procedures with negotiation, competitive dialogue procedures and innovation partnerships, contracting authorities may limit the number of candidates meeting the selection criteria that they will invite to tender or to conduct a dialogue, provided that the minimum number of qualified candidates is available, in accordance with the following paragraphs of this regulation.

(2) Contracting authorities shall indicate, in the contract notice or in the invitation to confirm interest, the objective and non-discriminatory criteria or rules they intend to apply, the minimum number of candidates they intend to invite and, where applicable the maximum number.

(3) In the restricted procedure, the minimum number of candidates shall be 5.

(4) In the competitive procedure with negotiation, the competitive dialogue procedure and the innovation partnership procedure, the minimum number of candidates shall be 3.

(5) In any event the number of candidates invited shall be sufficient to ensure genuine competition.

(6) Contracting authorities shall invite a number of candidates at least equal to the minimum number indicated in accordance with paragraph (2).

(7) But where the number of candidates meeting the selection criteria and the minimum levels of ability as referred to in regulation 58(19) is below that minimum number, the contracting authority may continue the procedure by inviting the candidates with the required capabilities.

(8) In the context of the same procedure, the contracting authority shall not include economic operators that did not request to participate, or candidates that do not have the required capabilities.