SQ Byte 2 – Scope and coverage
This is the second in a series of short "SQ Bytes" looking at the Selection Questionnaire (SQ) issued by the Crown Commercial Service (CCS).
This SQ Byte 2 looks at the scope and coverage of the SQ, including commentary on works contracts and the light touch regime.
SQ Byte 3 moves on to issues arising when using the SQ. It provides more detail on the content of the SQ, and a short explanation of the concept of reliance on capacities of third parties to satisfy selection criteria.
SQ Byte 4 covers when and how you can amend the SQ.
SQ Byte 5 looks in more detail at the standard questions in Parts 1, 2 and 3 of the SQ.
SQ Byte 6 considers the interaction between the SQ and the ESPD.
SQ Byte 7 on self-cleaning, concludes the series
All contracting authorities in England are required to use the SQ and have regard to the statutory guidance.
In Wales and Northern Ireland, only contracting authorities exercising wholly or mainly reserved (non-devolved) functions are required to use the SQ. Contracting authorities in Scotland are subject to a different statutory regime and must use the Scottish ESPD.
Contracts below the EU financial thresholds (£106,047/£164,176)
A separate exclusion/selection stage is not permitted in any procurement for supplies and services contracts below the relevant EU financial thresholds - £106,047 for central government and £164,176 for sub-central contracting authorities. Contracting authorities are required to use a one-stage process. This provision is set out in PCRs Regulation 111.
Paragraph 27 of the Statutory Guidance explains that in the context of a one-stage process the SQ exclusion and selection questions may be used as a guide to developing appropriate and proportionate questions used to assess suitability, capability, legal status and financial standing of a potential supplier
Contracts above the EU financial thresholds (£106,047/£164,176)
The SQ must be used for all supplies contracts and fully regulated services contracts of a value equal to or greater than the relevant EU financial thresholds - £106,047 for central government and £164,176 for sub-central contracting authorities.
Note on the national "low value" contracts thresholds
The PCRs create national "low value" contracts thresholds (our terminology) for works contracts and light touch regime (LTR) service contracts.
There are two national "low value" contracts thresholds, one applying to central government bodies and one applying to sub-central contracting authorities
The national "low value" contracts thresholds for works contracts and light touch regime service contracts are:
These are the same as the thresholds applying to supplies and fully regulated service contracts, which causes some confusion.
In the context of the SQ, the national "low value" contracts thresholds are relevant to whether or not a two stage process may be used and when or how the SQ may be used.
In our view PPN 08/16 is not always sufficiently clear about whether references to "EU thresholds" are to the thresholds set in EU legislation or whether they also apply to the national "low value" contracts thresholds based on the EU thresholds.
"Low value" works contracts (below £106,047/£164,176)
A separate exclusion/selection stage is not permitted for works contracts below the national "low value" contracts thresholds.
Contracting authorities are required to use a one-stage process for these low value works contracts. This provision is set out in PCRs Regulation 111.
Works contracts above £106,047/£164,176
SQ Parts 1 and 2: The Statutory Guidance on Part 1 and Part 2 states at paragraph 21 that it is mandatory for a potential supplier to complete Part 1 and Part 2 of the SQ (or the ESPD template) "for all procurements above EU thresholds".
What has not been entirely clear until recently is how this ties in with the requirement to use PAS 91 for works contracts. Concerns have been expressed that PAS 91 is out of date and are not aligned with the PCRs.
The CCS has clarified the position. On page 5 of the FAQs 8 February 2017 there is a question "When should I use PAS 91?" The answer given by CCS is that PQQs should be used in works contracts above the relevant goods and services thresholds (£106,047/£164,176) BUT that until the new version of PAS 91 is published, contracting authorities should use SQ Parts 1 and 2 for works contracts above those thresholds.
SQ Part 3: The Statutory Guidance on Part 3 explains at paragraph 27 that for works contracts valued between the national "low value" contracts thresholds and the EU works threshold "you may use a two stage process and make use of the PAS91 PQQ." Paragraph 25 of the Statutory Guidance is more emphatic, saying that contracting authorities "should use the PAS91 PQQ for works contracts" (our emphasis). The FAQs 8 February 2017 question "When should I use PAS91?" states that "contracting authorities should use….supplier selection questions from PAS91."
This lack of clarity is not very helpful. Does "should" mean "must", does "may" mean that contracting authorities have a choice? We would argue that in this context the CCS provides a steer but it is not obligatory to use PAS91 for selection stage (Part 3) questions.
"Low value" LTR service contracts (below £106,047/£164,176)
A separate exclusion/selection stage is not permitted for LTR contracts below the national "low value" contracts thresholds.
Contracting authorities are required to use a one-stage process for these low value LTR service contracts. This provision is set out in PCRs Regulation 111.
There is nothing to stop contracting authorities using the SQ exclusion and selection questions as a guide to developing appropriate questions in a one stage process national "low value" contract, to assess the suitability, capability, legal status and financial standing of a potential service provider, where the questions are relevant and proportionate.
LTR contracts above £106,047/£164,176
There is no categorical statement obliging contracting authorities to use the SQ, or a version of the SQ, for contracts above the national "low value" contracts thresholds, including those above the EU LTR regime threshold. A close reading of the statutory guidance and FAQs points to the SQ not being obligatory. Contracting authorities are, however, steered towards using the SQ as a starting point and CCS provides some extra guidance on this.
Grounds for exclusion: The grounds for mandatory and discretionary exclusion covered by Part 2 of the SQ do not apply to LTR procurements. CCS confirms that this is correct "as a matter of law". Whilst it is not a statutory requirement, the CCS comments that contracting authorities "would still normally exclude" suppliers guilty of mandatory exclusion grounds and "should also consider the circumstances surrounding breach of discretionary grounds for exclusion". The CCS recommends, but does not oblige, contracting authorities to use Part 1 and Part 2 of the SQ for these purposes.
Selection stage questions: The CCS position is less clear on selection stage questions in Part 3 of the SQ. The FAQ at page 7 of FAQs 8 February 2017 asks "What do I ask the suppliers for in a Light Touch Regime (LTR) procurement?" The answer given is "Use a selection of questions from Part 3 standard Selection Questionnaire for above-threshold LTR contracts". What does this mean?
Our view is that there should be flexibility for LTR contracts. Contracting authorities should be able to use some, all or none of the Part 3 questions as appropriate for the particular contract in question. They should also be able to add selection stage questions or even create an alternative document with selection stage questions that are relevant and proportionate to the contract being procured. Amendments or additions made on a case-by-case basis will not be reportable deviations.
In the next SQ Byte 3 we will look at the content of the SQ and explain the important concept of reliance on the capacities of third parties to satisfy selection criteria and the impact that has on completion of the SQ.