making sense of the new procurement rules - reading - 18 03 2015 - afternoon presentation

19/03/2015 1

The Procurement Workshop18 March 2015

Presenters

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Allan Wilson, Partner

[email protected]

029 2038 5482

Charlotte Kendrick, Senior Solicitor

[email protected]

029 2038 5304

mailto:[email protected]

mailto:[email protected]

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Workshop Agenda

Session 1: Becoming ‘tender ready’

Session 2: Conducting a successful procurement

Session 3: Standstill and contract award

Session 4: Issues arising post contract award

Session 5: Q&A

Session 1:

Becoming

Tender Ready

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The Procurement Workshop

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Becoming ‘Tender Ready’

Today’s Scenario

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• Do the PCR 2015 apply?

• What are “contracting authorities”?

• Works, Services or Goods?

• Do any exemptions apply?

• Light Touch regime?

• Contract or Framework?

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• Do the PCR 2015 apply?

• Thresholds?

• Timescales?

• Lots?

• Conflicts of Interest?

• Practical issues – standing orders, internal

procurement rules

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Plan, plan, plan (and then plan some more!)

• Set the scope:

• What are the needs of the Contracting Authority – what to buy,

how to buy it and how much will it cost?

• Market research/testing – assessing bidder interest; involvement

of SME’s; division into lots?

• Prepare a business case and secure funding

• Practical issues – staff the procurement; data rooms; evaluation

teams; timetabling

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Plan, plan, plan (and then plan some more!)

• Stakeholder buy-in (genuine competition)

• Engaging with experts (e.g. financial modelling)

• Evaluation criteria and weighting and methodology for applying

those criteria

• Carry out “dry run”

• Set the timescale & stick to it!

• Electronic Availability of procurement documents

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Timescales and

Thresholds

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Thresholds under the PCR 2015:

Supplies Services Light Touch regime

services

Works

Central

Government

Authorities (see

schedule 1)

£111,676 £111,676 £625,050* (healthcare

service contracts

continue to have a

threshold of £172,514

under PCR 2006 until

the end of 2015, and

such revised threshold

as may be specified

until the PCR 2015

become applicable to

them in April 2016

EUR 5,186,000

Other public sector

Contracting

Authorities

£172,514 £172,514 EUR 5,186,000

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Procedures

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Selecting the correct procedure:

• Open procedure (Reg 27)

• Restricted procedure (Reg 28)

• Competitive procedure with negotiation (Reg 29)

• Competitive dialogue (Reg 30)

• Innovation Partnership (Reg 31)

• Use of the Negotiated procedure without prior publication (Reg 32)

Is your procurement subject to the PCR 2015? If so,

which procedure would you select for our procurement?

Session 2:

Conducting a

Successful

Procurement

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19/03/2015 16

ADVERTISEMENT

PQQ & EVALUATION

INVITATION TO TENDER

BID SUBMISSION

EVALUATION

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Conducting a Successful Procurement

Advertisement

Conducting a successful procurement

Advertisement:

• Contract notice

• PINs

• Prescribed form

• Published in OJEU

• Remember – electronic availability

of documents

• Make sure it’s correct!Source: http://simap.europa.eu/docs/simap/pdf_jol/en/sf_002_en.pdf

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Pre-Qualification/Selection Stage

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The PQQ Stage:

• Essentially a short-listing exercise

• Pre-cursor to ITT stage

• Question to be asked is ‘can the bidder do this’?

Consider the headline points you would need to cover in

the PQQ to be issued in respect of today’s scenario

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The PQQ:

• Only used to evaluate (1) the economic/financial standing (2)

technical/professional ability of suppliers and (3) eligibility :

• Any minimum levels set by contracting authorities must be

related/proportionate to the subject matter of the contract.

• Equal treatment and non-discrimination – ensure transparency

• The ‘must’ excludes and the ‘may’ excludes and ‘self-cleansing’

• Selection criteria are applied only at PQQ stage in order to short-list bidders

to be invited to tender and are not permitted to be re-assessed during award

stage.

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Developing the PQQ document: one size does not fit all!

• What are you seeking from the contract? What is each question asking for?

• Ensure the PQQ is structured to allow you to select suitable providers

• PQQ scoring model, weightings of evaluation criteria and PQQ itself should be drawn

up in tandem to ensure that they correspond. If possible/appropriate, keep it simple!

• Information requested in the PQQ should be relevant to the requirement, including

requests for policy documents (e.g. health and safety, HR etc).

• Complexity/structure should equate to the value/risk of the contract. Setting

unnecessarily high requirements should be avoided.

• Ensure that your evaluators understand how to assess the information provided and to

carry out the evaluation – put the right people in place

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Developing the PQQ document: one size does not fit all!

• European Single Procurement Document (“ESPD”) and eCertis

• Ensuring the financial robustness of supplier:

• Beware outdated credit checks

• Tangible net worth

• Management accounts

• PCGs, bonds, financial guarantees to mitigate risks

• Consider engaging external auditors for high value/high risk projects

• Cannot evaluate financial standing of bidder at award stage

• Build in provision for refresh of PQQ prior to award

• Key message - don’t set arbitrary limits/requirements unnecessarily

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Invitation to Tender

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The ITT Stage:

• Sets out the contracting authority’s requirements and the

contracting authority marks responses received to this.

• Question being asked at this stage is: ‘how will the bidder

do this?’

Consider the headline issues you would need to cover in the

ITT documentation to be issued in respect of today’s scenario

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The ITT Documents:

• Must set out the full details of:

• the contracting authority’s requirements/specification

• the applicable contract terms (note there is limited scope to change

these after ITT!)

• the full evaluation and scoring methodology - you must test these

methodologies to the fullest extent possible before issuing an ITT

• Basis for the award of the contract – now only Most Economically

Advantageous Tender (MEAT)

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Developing the ITT documents: one size does not fit all!

• The evaluation criteria and methodology (including the relative weightings) setting out

the basis on which the contract will be awarded must be disclosed.

• The evaluation criteria should (not exhaustive!):

• link to the subject matter of the contract and not free-standing

• be verifiable and capable of measurement

• be transparent, objective and clear

• be non-discriminatory

• be proportionate

• Limitations of using pass/fail hurdles

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Developing the ITT documents: one size does not fit all!

• Potential tenderers should be made aware of all the elements taken into

account by the contracting authority, including the full scoring methodology, so

that this is available when they prepare their tenders.

• Key messages:

• transparency! This is the overarching consideration when drawing up

documents/processes.

• disclose everything at the start (all criteria, sub-weightings,

methodology etc)

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Evaluation/Award Stage

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Evaluation of the ITT responses:

• Application of overarching ‘Treaty Principles’: Transparency, fairness and equal treatment.

• Clarifications – no post-tender negotiation permitted (only clarification, specification and fine-

tuning)

• Scoring:

• Do not confuse award criteria (ITT) and selection criteria (PQQ)!

• Only use criteria, weightings and scoring methodology that’s been disclosed

• Tender reports: keep an audit trail of the scoring awarded – brief, objective reasons for

scores

• Think about the merits of including a moderation/second review element in evaluation.

• Ensure evaluation panel has sufficient expertise and resource

Session 3:

Standstill and

Contract Award

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Standstill and Contract Award

– Alcatel letters

• Content

• Purpose

– Standstill period

• What you can/cannot do in the 10 days

• Threat of ineffectiveness

– Debriefs

• Good or bad idea?

– Challenges and automatic suspension

32


Regulation 86:

– Each tenderer to be sent notice of decision (save

where contract can be concluded without prior

publication, where there is only one tenderer, or

where the award is under a Framework

Agreement or a dynamic purchasing system)

– Contracting Authority cannot enter into the

contract without sending an “Alcatel” letter

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Notice must include:

– Criteria for award

– Reasons for decision including characteristics and relative advantages

of successful tender

– Tenderer’s and winner’s scores

– Name of winner

– Precise statement of end of standstill period or date before which

contracting authority will not enter into contract (complying with

Regulation 87)

– Reason for technical rejection

Can exclude certain information which:

– is contrary to public interest

– prejudices legitimate commercial interests

– prejudices fair competition

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Objective of Alcatel letters

– Meet statutory duty to give notice of award

– Provide required feedback about the

decision and the reasons for it

– Start time running for limitation

35


Content of Alcatel letters

– How much detail?

• Headline scores?

• Scores for all questions/sections?

• Explanation behind differential scores?

• Statutory content: technical specification

– UAB Guamina -v- European Institute for Gender

Equality

• Challenger needs to be able to understand what

was required of him and the elements of the

successful bid that justified higher scores.

36


Regulation 87

– Standstill period duration depends on method

of notification to bidders used

– Fax or electronic: period ends at midnight at

end of 10th day after relevent sending date

(i.e. date on which Alcatel notice sent or last

of dates if several sent)

– Other means: midnight at end of 15th day

after relevant sending date

– Extend period if expiry falls on non-working

day

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– Mandatory 10 days does not mean cannot

do anything

– Can progress contract preparation but do

not let contract

– Can correspond with bidders and provide

additional feedback/deal with challenges

– Can provide debrief if you choose

38


Regulation 98

– Breach standstill at your peril

– If ground for ineffectiveness exists Court must

• Make declaration to that effect (limited

exceptions in Regulation 100)

• Impose financial penalties (Regulation

102)

• Award damages to innocent bidder

39


Regulation 99

3 grounds for ineffectiveness:

– First - direct award without prior publication of contract notice

(save 3 exceptions where thought permitted, or published

voluntary notice, or waited at least 10 days after voluntary

notice)

– Second - breach of Regulation 87 (standstill period),

Regulation 95 (suspension ignored) or Regulation 96(1)(b)

(breach of interim order) and is another breach of Regulations

and economic operator deprived of change to start

proceedings and breach has affected chances of winning

– Third - applies to Framework Agreements/dynamic purchasing

(subject to exceptions)

40


To debrief or not to debrief?

For debrief:

– Preserve or enhance reputation in market/commercial relationships

– Improve quality of future bids

– Show confidence in evaluation process and outcome

Against Debrief:

– Goes beyond what contracting authorities obliged to do

– May disclose material bidders would otherwise not see, which may

bolster speculative challenges

– May disclose inconsistencies between participants in process and

marking from different evaluators

– May show weaknesses in evaluation

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• Any debrief:

– Should be prepared carefully and scripted

– Should be capable of explaining how result

was arrived at

– Should be minuted

– Should note involve admissions of errors

– Should occur after the 10 day standstill if

possible

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Common grounds of challenge:

– Unclear criteria

– Use of undisclosed sub-criteria/weightings

– Inadequate methodology or deviation from it

– Manifest error

– Discrimination/unfair treatment / lack of transparency

– Successful bidder unable to meet specification

– Inadequate or unfair evaluation process

– Where scores are very close – whatever bidder can

think of!

43


Suspension of contract process

– Automatic if Claim Form issued and notified to

Contracting Authority

– Serious issue to be tried

– Adequacy of damages

– Balance of convenience

– Cross undertaking in damages

– Conduct relevant to Court’s decision

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Session 4:

Issues arising

post-award

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Issues arising post-award

Common issues that arise:

• Change of control of suppliers

• Issues with financial modelling in practice

• Renewal/extension & material change – codification

of Pressetext Nachrichtenagentur

Session 5:

Q&A

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making sense of the new procurement rules - reading - 18 03 2015 - afternoon presentation

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