SQ Byte 3 – Using the SQ
This is the third in a series of short "SQ Bytes" looking at the Selection Questionnaire (SQ) issued by the Crown Commercial Service (CCS).
This 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
SQ Byte 2 looked at the scope and coverage of the SQ including which contracting authorities and which contracts are caught. This SQ Byte 3 provides an overview of the content of the SQ and explains the important concept of reliance on the capacities of third parties to satisfy selection criteria.
The SQ starts with notes addressed to suppliers completing the SQ. The notes are in draft format and include instructions to contracting authorities using the SQ which will need to be deleted before the contract specific SQ is published.
The notes to suppliers explain the concept of self-declaration. They also refer to requirements for completion of Parts 1 and 2 of the SQ by organisations the supplier will rely on to meet the selection criteria (see explanation at the end of this Byte).
The SQ then moves on to "Notes for completion", again addressed to suppliers. These include definitions of the "authority" and "potential supplier" as well as instructions to suppliers on how to complete the SQ.
In Part 1: Potential supplier information the supplier is required to insert basic background information which will not be scored. This includes information such as the supplier's name, registration and trading details and, where relevant, parent company details. It also covers information about the "bidding model" which is aimed at establishing whether the supplier is bidding as part of a group and exploring group bidding structures in more detail.
Where a supplier is relying on another organisation (third party) to satisfy selection criteria then the third party concerned must complete a separate Part 1 (and Part 2 – see below).
Contracting authorities have the option to require sub-contractors whom a supplier is not relying on to satisfy selection criteria to submit a self-declaration covering both Parts 1 and 2 and to explain this in paragraph 6 of the notes for completion.
In Part 2: Exclusion grounds the supplier is required to confirm by way of a self-declaration that the mandatory and discretionary grounds for exclusion do not apply. There are also questions relating to evidence of self-cleaning measures taken by the supplier.
Where a supplier is relying on another organisation (third party) to satisfy selection criteria then the third party concerned must complete a separate Part 2 (and Part 1 – see above).
Contracting authorities have the option to require sub-contractors whom a supplier is not relying on to satisfy selection criteria to submit a self-declaration covering Parts 1 and 2 and to explain this in paragraph 6 of the notes for completion.
In Part 3: Selection questions the supplier is required to provide information relating to selection criteria covering economic and financial standing, technical and professional ability, compliance with Modern Slavery Act requirements and "additional questions". The additional questions concern insurance, skills and apprentices*, steel* and suppliers past performance* - the starred questions* are only obligatory for central government contracting authorities ("In-scope organisations") as explained in the relevant PPNs covering those topics.
It is important to understand the concept of reliance by a supplier on the capacities of other organisations (third parties) to satisfy selection stage criteria, as distinct from the use of sub-contractors to deliver the contract. In practice the two concepts can, and do, overlap.
The SQ refers at various points to by whom and how Parts 1, 2 and 3 must be completed. This varies depending on whether or not the supplier is relying on the capacities of other organisations (third parties) to satisfy selection stage criteria
The concept is most easily explained using a couple of practical examples:
Example 1 - no reliance on a third party to satisfy the selection criteria: A contracting authority plans to run a procurement process for the award of a contract above the EU threshold for the supply and maintenance of photocopiers and printers.
The contracting authority is aware that some equipment suppliers subcontract the maintenance. The contracting authority is not concerned about who the equipment supplier uses for the maintenance. The contracting authority is happy to leave it to the supplier to decide which maintenance service provider to use as a subcontractor. It just wants to be satisfied that the combined supply and maintenance service will be delivered by the equipment supplier to the required standards.
In order to assess whether the selection criteria relating to experience is met, the contracting authority will ask about the experience of the equipment supplier in running contracts which cover both supply and maintenance. It will not ask about the maintenance service provider or its experience.
In this case only the equipment supplier needs to complete the SQ. There is no need for the maintenance service provider to complete the SQ as the equipment supplier is not relying on the experience of the maintenance service provider to satisfy the selection criteria relating to experience. The equipment supplier may not even have identified a maintenance service provider at this stage.
Example 2 - reliance on a third party to satisfy the selection criteria: A contracting authority in the health sector plans to run a procurement process for the award of a contract above the EU threshold for the supply and maintenance of a complex and critical item of medical equipment. The medical equipment requires specialised maintenance from highly qualified maintenance engineers who need to work closely together with the authority's own staff. Some equipment suppliers in this field provide an in-house maintenance service but others use sub-contractors.
Due to the specialised nature of the maintenance service and the criticality of the equipment the contracting authority wants to be satisfied that both the equipment supplier and the provider delivering the maintenance service have relevant experience.
In this case, where the equipment supplier does not have direct relevant experience of delivering the maintenance service elements of the contract, it will need to rely on a "third party" – the maintenance service provider - to satisfy the relevant selection criteria for experience of delivering the service.
Both the equipment supplier and the maintenance service provider will need to provide a completed declaration of Part 1 and Part 2 of the SQ. The supplier must also complete Part 3, providing a composite response in Part 3 section 6, covering information relating to experience of both the supplier and the service provider.
In this case the contracting authority can require the supplier to provide proof that it genuinely does have access to the resources of the third party necessary for the delivery of the contract – for example a formal letter of commitment between the supplier and the maintenance provider.
Regulation 71 – Exclusion of subcontractors
Regulation 71 permits, but does not oblige, contracting authorities to ask a supplier to indicate in its tender any share of the contract that it may intend to subcontract and who the subcontractors are.
Contracting authorities may also verify whether grounds for exclusion apply to subcontractors. Again, this is not obligatory.
When a contracting authority opts to verify whether grounds for exclusion apply to subcontractors the subcontractor must complete Part 1 and Part 2 of the SQ.
Where a ground for exclusion applies to a subcontractor the contracting authority:
This is also explained in the FAQs 8 February 2017 document under the heading “Do sub-contractors have to complete the SQ?”
In the next SQ Byte we move on to look at when you can amend or add to the SQ and the requirements for reporting deviations.