Byte Size Procurement Updates – The Selection Questionnaire ("SQ") Byte 7 – Self-cleaning

Byte 7 – Self-cleaning

21/03/2017

This is the seventh and final Byte in a series of short "SQ Bytes" looking at the Selection Questionnaire (SQ) issued by the Crown Commercial Service (CCS).

SQ Byte 1 provides an overview of the structure and content of the SQ and statutory guidance.

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.

This SQ Byte 7 on self-cleaning, concludes the series.

 

Self-cleaning

In SQ Byte 5 we touched on the question of requesting evidence of self-cleaning measures where a supplier confirms that a ground for exclusion applies and that they have taken self-cleaning measure. This SQ Byte goes into a little more detail on self-cleaning. It runs through the concept of self-cleaning and the provisions on self-cleaning in the Regulations and explores some practical issues.

Exclusion from participation in a procurement procedure is a harsh measure with potentially significant implications for the supplier concerned. Self-cleaning softens the impact of exclusion by allowing suppliers to demonstrate that they are still suitable to participate in a procurement process despite the fact that grounds for exclusion exist.

During the drafting and negotiation process prior to the implementation of the 2014 Directives there was significant lobbying by industry seeking to counterbalance the perceived over-zealous use of grounds for exclusion in some Member States. The decision to exclude often appeared disproportionate and unfair to suppliers who had taken extensive compliance measures aimed at remedying the consequences of criminal offences or misconduct.

Specific self-cleaning provisions on public procurement were introduced for the first time in the 2014 Directives to counter these criticisms and with the aim of encouraging as wide competition as possible. However, the concept was well established in some Member States, such as Germany, and was commonly accepted practice in UK on the rare occasions that the possibility of exclusion has arisen.

The rules on self-cleaning are set out in Regulation 57(13) to (17).  The rules set out steps to be taken when the possibility of self-cleaning arises.

Supplier's right to demonstrate self-cleaning

  • Where any of the mandatory grounds for exclusion listed in Regulation 57(1) or discretionary grounds for exclusion listed in Regulation 57(8) apply, a supplier is entitled to provide evidence to the contracting authority of self-cleaning measures it has taken.

Contracting authority must consider the evidence

  • The contracting authority is required to consider the evidence provided by the supplier and decide whether such evidence is sufficient to demonstrate that the supplier is reliable, despite the existence of grounds for exclusion

The supplier's evidence must prove that it has:

  • Paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct;
  • Clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities; and
  • Taken concrete technical, organisational and personnel measures that are approporatie to prevent further criminal offences or misconduct. 

This should not be regarded as an exhaustive list.

PPN 08/16 includes an FAQ on self-cleaning. This states that the actions agreed on deferred prosecution agreements (DPAs) may be submitted as evidence of self-cleaning.

Contracting authority evaluates the evidence

  • The contracting authority must evaluate the supplier's self-cleaning measures, taking into account the gravity and particular circumstances of the criminal offence or misconduct.

Contracting authority decides whether the evidence is sufficient to demonstrate reliability

  • Supplier is reliable: Where the contracting authority considers that the evidence is sufficient to demonstrate that the supplier is reliable then the supplier is not excluded from participation in the procurement and so it can continue to participate.
    • The FAQ on self-cleaning states that that this decision of the contracting authority is final. 
  • Supplier is not reliable: Where the contracting authority decides, after considering the evidence, that the measures are insufficient to demonstrate that the supplier is reliable it must provide a statement of reasons for that decision to the supplier
    • The supplier is excluded from participation in the process.

 

There is no guidance on what constitutes sufficient self-cleaning measures to demonstrate reliability. The assessment and decision is left to the contracting authority. The decision will need to be taken on a case by case basis.

The contracting authority must evaluate the measures taken by the supplier taking into account the gravity and particular circumstances of the criminal offence or misconduct. The contracting authority should consider all of the evidence provided to it and request additional information or clarification where necessary.

There are no specific requirements in terms of timing or detailed process to be followed but all timescales will need to be reasonable and proportionate and the process should be conducted in a transparent manner. There will also need to be a clear audit trail of the decision and reasons for the decision. The decision and reasons for the decision must be included in the Regulation 84 report.

When a contracting authority informs a supplier that the evidence submitted is not sufficient to demonstrate that the supplier is reliable and so the supplier will be excluded, the contracting authority must also give the supplier a statement of its reasons for that decision.  Neither the Directive nor the PCR set out any further requirements relating to those reasons, so it is not clear the detail an authority would have to go into.  Under the general principle of transparency (contained in Regulation 18, TFEU principles and under public law principles) an authority would be expected to ensure that its statement of reasons is factually accurate and a fair representation of its decision making process.  Ultimately, those reasons (as with any decision governed by public law) could be open to challenge by way of judicial review if, for example, they were irrational, biased or otherwise flawed as a matter of public law.

 

If you would like to discuss the impact of the Selection Questionnaire on your organisation, please contact the author of this article Susie Smith or Head of Procurement, Emily Heard.

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