Byte 5 – Using the SQ – Questions on SQ Questions
This is the fifth in a series of short "SQ Bytes" looking at the Selection Questionnaire (SQ) issued by the Crown Commercial Service (CCS).
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.
This 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 4 looked at what can and cannot be changed in the SQ, reporting permitted changes (deviations) and use of additional questions. In this SQ Byte 5 we consider the SQ questions in more detail, responding to some specific issues which have arisen in practice when using the SQ.
How to present the SQ
In most cases contracting authorities will need to prepare a "wrapper" document - to wrap around and complete the SQ to create a fully functioning supplier friendly explanatory document.
The standard format of the SQ and wording of the questions in Parts 1, 2 and 3 mean that additional explanation and instructions added by the contracting authority are critical to ensure that suppliers understand how to complete the SQ, what information is expected from them and what methodology will be used for assessment. This should ensure that the contracting authority receives the information it requires to properly assess the suitability of suppliers and provide transparency on how the process and evaluation will be carried out.
The wrapper document can be used to provide information on the procurement process and timetable as well as explaining the contracting authority's expectations in terms of information required, particularly in relation to selection stage questions.
The "wrapped" SQ is only one of the documents required as part of the package of procurement documents which should be available to interested supplies when an EU procurement is advertised.
Do we have to ask whether a supplier is proposing to use sub-contractors?
It appears that you have to ask this question as it is not permitted to amend or delete questions in Part 1 of the SQ.
This is not in line with Regulation 71(1) which makes it clear that contracting authorities have the option to ask suppliers for information about sub-contractors who it is not relying on to satisfy selection criteria.
The requirement to identify sub-contractors may create problems for suppliers who intend to sub-contract certain elements of the contract but have not identified sub-contractors at the date of completing the SQ. How are they supposed to respond? The CCS does not provide any guidance on this.
It seems reasonable for the contracting authority to provide further information on the approach it is taking in the wrapper document. Where the contracting authority identifies sub-contractor roles which are essential to the delivery of the contract then it could explain that it requires information about those "essential sub-contractors" only in response to questions 1.2. Where the contracting authority does not identify essential sub-contractor roles then it could, perhaps, explain that it does not require a response to question 1.2(b)(ii).
Why can we request evidence of self-cleaning measures where a discretionary ground for exclusion applies but not where a mandatory ground for exclusion applies – doesn't self-cleaning apply to mandatory grounds?
Self-cleaning does apply to mandatory grounds for exclusion. (This will be discussed further in SQ Byte 7).
SQ question 2.2 concerning mandatory grounds for exclusion merely requires suppliers to answer "yes" or "no" in response to the question whether they have taken self-cleaning measures where a mandatory ground for exclusion applies. It does not ask for any further explanation.
SQ question 3.2 concerning discretionary grounds for exclusion asks suppliers to explain what self-cleaning measures they have taken, where they have ticked "yes" in response to the question of whether a discretionary ground for exclusion applies.
This seems to be an anomaly in the drafting but it is not permitted to amend questions in Part 2 to request relevant information from suppliers.
We therefore suggest that you use the wrapper document to explain that suppliers are entitled to submit evidence of self-cleaning measures for the contracting authority to consider in relation to both mandatory and discretionary grounds for exclusion.
The health & safety and equalities questions which were included as additional questions in the standard PQQ have disappeared. Do questions 3.1(a)(b) & (c) on breach of environmental, social and labour law obligations cover this?
The health & safety and equalities questions in the standard PQQ issued in 2015 had "Additional PQQ modules" which included quite detailed questions on breaches of equality legislation and compliance with health and safety legislation. Use of the additional PQQ modules had to be considered on a case by case basis and they were only to be used where it was relevant and proportionate to the subject matter of the contract. The principle of self-certification applied.
Question 3.1 in the SQ requires self-certification of compliance with environmental, social and labour law obligations. These obligations cover a broad range of statutory requirements – for example self-certifying compliance with labour law obligations should cover statutory requirements in relation to equalities and health and safety policies.
Self-certification in this context does not, however, automatically lead to provision of information concerning, for example, complaints upheld as a result of investigations by the Equality and Human Rights Commission which were covered in the PQQ additional module.
There is an FAQ on this question in the FAQs 8 February 2017 document which asks “Why aren’t there questions on equality, health and safety and the environment in the SQ”. The answer to this FAQ notes that there are general questions on these issues in SQ Part 1 3.1 but also goes on to comment that you may ask project specific questions on these topics where relevant to the contract.
It also notes that PAS91 has modules on these topics for use in works contracts and says: "If you wish to include additional questions on these topics in all your procurements you will need to register a deviation". This appears to permit a one-off report to cover all procurements but it seems to be limited to use of the PAS91 modules for works contracts. See SQ Byte 4 for more information on reportable deviations.
Where the particular nature of the contract means that it is relevant and proportionate to ask for additional specified information in relation to environmental, social or labour law issues, then this should be picked up in Part 3 by the inclusion of project specific questions with the requirement and the reasons explained in the wrapper document.
We just use a credit rating report to assess financial and economic standing, so do we have to include all of the questions on economic and financial standing?
The statutory guidance makes it clear that contracting authorities should not deselect potential suppliers for above EU threshold contracts on the basis of a credit check alone. You need to assess financial and economic standing for above EU threshold contracts using a broader approach.
This is not new. In 2013 the CCS issued Procurement Policy Note 02/13 - Supplier Financial Risk Issues, which all contracting authorities were strongly encouraged to apply. This explained that credit rating reports are "useful for obtaining a snapshot view of potential providers' standing and as part of a broader appraisal" but they are "not a substitute for examination of accounts and other documentation provided by potential providers to confirm financial capacity".
You do not have to use all of the questions in Part 3 on economic and financial standing. You could delete those questions. However, if you are assessing economic and financial standing you will need to use more than just a credit rating check and so in practice you will need to ask about the availability of information concerning economic and financial standing. It therefore makes sense to first consider which of the questions on economic and financial standing in Part 3 are relevant to the procurement and use those questions and/or additional relevant questions.
We want to check that suppliers meet minimum financial requirements before we shortlist them. Is it OK to ask for documents, such as audited accounts, from suppliers before shortlisting or do we have to rely on their self-certification?
The Statutory Guidance and the Regulations make it clear that where necessary for the proper conduct of the procurement process it is permitted to ask for documents, such as audited accounts, from suppliers at any time in the process. You need to have a good reason why you require this information at an earlier stage than normal. It may well be appropriate to ask for information at an earlier stage in more complex multi-stage procurements given the potential impact of finding out later in the process that a supplier does not satisfy the selection requirements. The Statutory Guidance states at paragraph 40 that the "approach should be set out clearly in the procurement documents".
You will need to have an audit trail with the reasons why you require documents at an earlier stage in the process. In order to comply with the general transparency principle it is advisable to flag up this requirement to suppliers in advance in the SQ wrapper document and/or the OJEU notice.
Note: Paragraph 46 of the Statutory Guidance provides alternative wording for question 4.1 in the event that evidence is required at an earlier stage of the procurement process. The alternative wording reads "Please indicate which of the following you have provided to demonstrate your economic/financial standing." In practice it is difficult to see how this wording fits without further amendment to question 4.1 so you may need to report changes as a deviation.
We want further information on relevant experience and contract examples. Are we limited to asking about 3 contracts only and can we ask for more information than that listed in the table in question 6.1?
The Regulations do not limit the number of contracts which contracting authorities can ask about when seeking evidence to demonstrate sufficient appropriate experience. There is flexibility in terms of the questions in Part 3 and so, where it is relevant and proportionate to the particular contract then it is permitted to ask for more than three examples.
There are statutory limits on the time periods you can assess – you can generally only ask about contracts over the past 5 years in the case of works and 3 years in the case of supplies and services. There are also some statutory constraints in relation to the information which contracting authorities can request as evidence of professional and technical ability. The information which contracting authorities can request is limited to the information listed in Regulation 60(9), references (permitted under Regulation 58(16)) and information on quality assurance standards and environmental standards.
The FAQs 8 February 2017 document now includes a question about the list of possible topics covering technical and professional ability, which includes examples of contracts performed. The answer to the FAQ merely quotes Regulation 60(9).
It is important to think very carefully about how you describe the type of experience you require in response to question 6.1. For example if you require specialist experience in the design of particular types of facility, such as secure mental health facilities, then you should make this clear in the wrapper document so that suppliers know what sort of experience they need to demonstrate in response to this question.
How do we evaluate whether the supplier has previously maintained a "healthy supply chain"?
Question 6.2 requires suppliers intending to sub-contract a proportion of the contract to demonstrate how the supplier has previously maintained a healthy supply chain. Question 6.2 goes on to refer to evidence which could include details of management tracking systems to ensure contract performance. It also refers to prompt payment, which is also picked up in the statutory guidance which refers to prompt payment of sub-contractors as an example of capability to maintain a "healthy supply chain".
What does or does not constitute a healthy supply chain will depend on the particular market and the nature of the supply chain. The SQ's reference to prompt payment of suppliers in only one aspect of a wider assessment of the financial health of a supply chain which may include, for example, guarantees and bonds where necessary. Other factors contributing to a healthy supply chain may include, for example, evidence of regular review and audit of supply chain members, the overall resilience of the supply chain in the face of identified risks or disruption as well as supply chain knowledge of and compliance with key policies and legal requirements on matters such as health and safety, corruption, sustainability, environmental, social and labour issues.
As with all of the SQ questions, the wrapper document will need to explain how the information provided in response to this question about a healthy supply chain will be evaluated and scored.