In 2013, following a consultation process, Lord Young made a number of recommendations primarily aimed at encouraging SME participation in public procurement processes.
Regulations 105 to 113, in Parts 4 and 5 of the draft Public Contracts Regulations 2015, put those recommendations on a statutory footing. These new regulations are specific to England, Wales and Northern Ireland and are not based on the new Public Sector Directive 2014/24/EC. The draft Regulations were subject to a consultation process which ended on 17 October. The final adopted Regulations may therefore differ.
Regulations 105 to 109 (Part 4) abolish the use of a pre-qualification stage for most contracts below specified thresholds and impose requirements to advertise on Contracts Finder for certain contract opportunities.
This Byte Size Procurement Update looks at the provisions covering abolition of the pre-qualification stage. The requirements for publication on Contracts Finder and other Young reforms will be covered in future Bytes.
Regulation 107 – Abolition of the pre-qualification stage for low value contracts
Which contracts does this apply to? Regulation 107(2)
The starting point is that contracting authorities are no longer permitted to use a
pre-qualification stage for low value contracts. These are contracts awarded by central government authorities which are below the value of £111,676* and contracts awarded by sub-central authorities which are below the value of £172, 514*.
These values are the current EU financial thresholds for supplies and services contracts. The value of contracts is calculated in accordance with the usual rules on thresholds and aggregation and excludes VAT.
Regulation 107(2) defines the relevant values by cross referencing to other parts of the draft Regulations which refer, in turn, to articles in the Public Sector Directive 2014. We have summarised what these provisions mean in the table below.
What is and is not permitted?
Pre-qualification stage is not permitted: Regulation 107(1) states that “A contracting authority shall not include a pre-qualification stage in any procurement”.
Regulation 107(3) explains that a "pre-qualification stage" means a stage in the procurement process during which the contracting authority assesses “the suitability [,or unsuitability], of candidates to perform a contract for the purposes of reducing the number of candidates to a smaller number who are to proceed to a later stage in the process.”
Suitability assessment questions may be permitted: Contracting authorities are permitted to ask “suitability assessment” questions, but only where a number of conditions are met:
- must be relevant to the subject matter of the procurement
- must be proportionate
- can only be used to assess whether minimum standards are met
Contracting authorities may only use the information and evidence requested in suitability questions to establish whether candidates meet minimum standards of suitability, capability, legal status or financial standing.
All candidates which meet the minimum standards must be invited to tender. This means that it is not possible to draw up a shortlist of the best qualified candidates from amongst those who meet the minimum standards.
Other issues of Procurement Byte:
Bevan Brittan byte size procurement update 16: Advertising on Contracts Finder - EU contracts
Bevan Brittan byte size procurement update 15: Public Contracts Regulations 2015 published
Bevan Brittan byte size procurement update 14: to be replaced with Byte 18
Bevan Brittan byte size procurement update 13: Revised Bytes
Bevan Brittan byte size procurement update 12: The new “light touch regime” – Articles 74 to 76/Regulations 74 to 76
Bevan Brittan byte size procurement update 11: The Draft Public Contract Regulations 2015 - implementing optional provisions
Bevan Brittan byte size procurement update 10: Public-public cooperation or “in-house” exceptions
Bevan Brittan byte size procurement update 9: Permitted Changes to existing contracts and framework agreements
Bevan Brittan byte size procurement update 8: Award criteria and life-cycle costing
Bevan Brittan byte size procurement update 7: Framework agreements, Dynamic Purchasing Systems and e-catalogues
Bevan Brittan byte size procurement update 6: Selection stage - Grounds for exclusion, selection criteria and the ESPD
Bevan Brittan byte size procurement update 5: Innovation partnership – a new EU concept and a new procedure
Bevan Brittan byte size procurement update 4: Competitive procedures where negotiation is permitted
Bevan Brittan byte size procurement update 3: Statutory time limits under the Public Sector Directive 2014/24/EU part 2 - Competitive Dialogue Procedure and Competitive Procedure with Negotiation.
Bevan Brittan byte size procurement update 2: Statutory time limits under the Public Sector Directive 2014/24/EU part 1 - Open and Restricted Procedures
Bevan Brittan byte size procurement update 1: Pre-procurement issues