In Procurement Byte 15 we let you know that the Public Contracts Regulations 2015 were published on 5 February 2015, with most of the provisions coming into force on 26 February 2015.

We also mentioned that the main difference between the draft Regulations issued in September 2014 and the final published Regulations concern the “national” rules. These rules, in Regulations 105 to 114, implement reforms proposed by Lord Young, primarily aimed at encouraging SME participation in public procurement processes.

It is important to understand that the new national rules apply to both EU contracts and contracts below the EU thresholds. In particular there are new national rules on:

  • Advertising on Contracts Finder; and
  • The pre-qualification/selection stage of the procurement process.

We have divided this Byte 18 into two Parts which we are issuing at the same time, as two separate documents:

  • Part 1: covers regulation of qualitative selection for EU contracts - including a summary of the PQQ Guidance
  • Part 2: covers abolition of the pre-qualification stage for some low value contracts


  • Regulation 107 gives the Minister for the Cabinet Office powers to issue guidance in relation to the qualitative selection of economic operators.
  • Regulation 107 applies to:
    • Procurements for over threshold public contracts for works, supplies,services and light regime contracts; and
    • Procurements commencing on or after 26 February 2015; but
    • Does not apply to the procurement of healthcare services within the scope of the NHS (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013.

Under Regulation 107 contracting authorities are required to have regard to any guidance issued by the Minister for the Cabinet Office in relation to qualitative selection of economic operators. This is in addition to complying with the EU rules on selection in Regulation 57 to 65.

Qualitative selection in this context means processes by which contracting authorities:

  • select economic operators to participate in procurement procedures; and
  • decide whether to exclude economic operators from such participation.

Contracting authorities conducting procurements in a way which represents a 'reportable deviation' from the statutory guidance issued under Regulation 107 will need to report to the Cabinet Office to explain any such a deviation (see further below).

The PQQ Statutory Guidance

On 27 February 2015 the Cabinet Office and the Crown Commercial Service published the PQQ Statutory Guidance under Regulation 107.  The PQQ Guidance applies to procurements starting on or after 26 February 2015.  

The PQQ Guidance covers:

  • the requirement to use the standardised PQQ, reportable deviations, general principles, disclosure of scoring methodologies and consortium issues;
  • guidance on the use of each section in the standardised PQQ; and
  • the form of standardised PQQ.

Statutory Guidance summary

Works contracts

  • The industry standard PAS91 can be used when assessing suitability for works contracts

Supplies and services contracts

Use of standard selection questions in the standardised PQQ

  • All contracting authorities recommended to adopt the standardised selection questions (bank of core and additional module questions) when assessing suitability for goods and services contracts
  • Any questions selected from the standardised PQQ should be relevant and proportionate to the complexity and risk of the particular requirements
  • Contracting authorities should not deviate from the wording of the questions in the standardised PQQ

Additional project specific questions

  • Any additional, project specific, questions must be relevant and proportionate and fall within the scope of the standardised questions

Deviations from standard wording

  • Where contracting authorities deviate from the standard wording they must be able to justify the reason for doing so, if asked
  • CCS will undertake spot checks for compliance over the next few months, using the Mystery Shopper Scheme
  • From 1 September 2015 contracting authorities must report to the Cabinet Office any deviations from the standard wording and provide a rationale for the deviation. They must report within 30 days of the PQQ being made available to candidates on Contracts Finder

Self Certification

  • Contracting authorities should allow economic operators to self certify that they are not subject to mandatory/discretionary grounds for exclusion

Evidence of compliance

  • Evidence that the economic operators meet specified requirements relating to insurance, equality, environmental management and health and safety, should normally only be requested from the winning tenderer

Scoring methodology

  • Full details including scoring for each question, weightings, and any pass mark or minimum threshold for selection to be made known to economic operators at the same time that the PQQ/selection questions are issued
  • pass/fail questions to be made clear to economic operators


  • The PQQ Guidance also sets out requirements about information to be obtained from consortia and the manner of obtaining that information

The second part of the statutory guidance at Annex 1 is guidance on using each section of the standardised PQQ, together with a copy of the standardised PQQ.

This covers:

  • Supplier (economic operator) information
  • Mandatory grounds for exclusion
  • Discretionary grounds for exclusion - Part 1
  • Discretionary grounds for exclusion - Part 2 Tax compliance
    • This applies to central government only
  • Self cleaning (covering both mandatory and discretionary exclusions) i.e. suppliers evidencing remedial action taken in respect of misdeeds / offences.
  • Economic and financial standing
  • Technical and professional ability Part 1
    • Past experience / references
  • Technical and professional ability Part 2
    • Project specific questions
  • Additional modules - only to be used if they are relevant and proportionate to the subject matter of the contract
    • Insurance
    • Compliance with equality legislation
    • Environmental management
    • Health and Safety

Comment on consequences of failure to comply with statutory guidance:

It is very important to read all of the PQQ Guidance carefully, to ensure compliance. Contracting authorities must have regard to the statutory guidance. If a contracting authority decides not to follow the statutory guidance then it must have a clearly documented and appropriate reason for doing so and from September will need to report this. Failure to have regard to statutory guidance could open up the possibility of legal challenge by way of judicial review.

Comment on the practical impact of the statutory guidance:

In issuing the statutory guidance the government is putting significant pressure on all contracting authorities (save for the procurement of healthcare services as above) to use the standardised PQQ for all EU procurement processes for supplies and services contracts where a selection stage is applied.

This will require all authorities to review their standard selection stage procurement documents for EU procurements, including any documents or questions used in e-procurement, to ensure compliance and avoid the "reportable deviations" process as well as potential judicial review.

It may also require changes to internal rules. For example, if it is currently obligatory under an authority's internal rules to include equality or health and safety questions in a PQQ then the automatic use of those questions will no longer be permitted. Those questions must be considered for inclusion on a case by case basis and the decision and reason for inclusion will need to be documented demonstrating that they are reasonable and proportionate.

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