Review by PLC Public Sector in July 2011
This quick guide sets out the stages of a public procurement that are regulated by the Public Contracts Regulations (SI 2006/5).
Please note that references in this quick guide to the Regulations are references to the Public Contracts Regulations 2006 (SI 2006/5).
All but the most routine procurements need to be carefully planned. The level of planning will depend on what goods or services are being procured. For complex procurements this stage is likely to be lengthy requiring a full business case to be established for the proposed solution that the contracting authority intends to procure. Where necessary, the private sector should be involved in this process through market testing.
Contracting authorities must not assume that they can push ahead with a procurement and that the detail will be resolved during the course of a dialogue under the competitive dialogue procedure (www.practicallaw.com/0-385-1375). For a dialogue to be successful an authority must be well prepared.
Procurements regulated by the Regulations must use one of four procurement procedures:
The negotiated procedure should only be used in very rare circumstances and the remainder of this quick guide assumes that one of the other three procedures is used.
For more information on the differences between the four procurement procedures, see Practice note, Public procurement procedures (www.practicallaw.com/7-422-4818).
Contracts regulated by the Regulations must be advertised by publishing an OJEU Notice (www.practicallaw.com/9-385-1432). The OJEU Notice must be in a standard form, which is available on the EU's SIMAP website (www.practicallaw.com/3-384-2129).
Contracts that are not subject to the full procurement regime may also need to be advertised in order to comply with the EC Treaty (www.practicallaw.com/2-107-6192) principle of transparency. For more information on all of the applicable advertising requirements, see Practice note, Part B, below threshold and other procurements outside the regulations (www.practicallaw.com/6-384-1798).
This is a shortlisting stage and is not available when using the open procedure when all providers expressing an interest in an opportunity must be allowed to submit a tender. Interested parties must complete a pre-qualification questionnaire (www.practicallaw.com/2-385-1379) (PQQ) setting out information about them (but not about its proposed solution).
There are two main aspects to this stage in the procurement:
Deciding on a pool of qualified candidates, that is those who have scored the necessary score on the PQQ.
Then reducing the number of qualified candidates to a manageable number using an objective scoring methodology, the selection criteria (www.practicallaw.com/1-385-1370). For more information on what factors can taken into account when selecting bidders, see Practice note, Pre-qualification questionnaire (www.practicallaw.com/6-383-4825).
Contracting authorities will circulate to providers who pass the pre-qualification stage (or in the case of the open procedure express an interest):
An invitation to tender (for the open and restricted procedure).
An invitation to dialogue (www.practicallaw.com/0-385-1380) (for the competitive dialogue procedure).
An invitation to tender should set out full details of the contracting authority's requirements, as following tender submission there will only be minimal opportunity to revise tenders. An invitation to tender may however allow the submission of variant bids (www.practicallaw.com/7-385-1367) to allow for supplier innovation.
An invitation to dialogue should set out:
An overview of the authority and its needs.
A starting position from which the dialogue can commence.
How the dialogue will be structured together with any rules that will apply to the dialogue phase (for example, governing access to officers at the contracting authority or how information is disclosed by bidders during the course of meetings).
Much of this information will be disclosed in a descriptive document (see Standard document, Descriptive document (www.practicallaw.com/4-384-2044)). For more information on the dialogue phase, see below.
There is no set definition of what a dialogue is. It will usually consist of a series of meetings between the contracting authority and each individual bidder on the various aspects of the procurement (for example, technical, financial and legal).
The contracting authority will usually request bidders to submit outline solutions after a specified period of dialogue setting out how the bidder proposes to meet the authority's needs. While it will not be possible to hold bidders to commitments proposed in outline solutions, they may be evaluated. Based on the evaluation of the outline solutions, the authority will usually then decide to take a limited number of bidders forward into the final round(s) of dialogue.
The dialogue phase concludes when an authority is satisfied that it has thoroughly defined and refined its requirements and explored with the bidders all the possibilities for meeting those requirements (including the contractual provisions that will apply). At this point, an authority must inform bidders that the dialogue is concluded and issue a request for final tenders.
Whether in response to an invitation to tender under the open or restricted procedure or a request for final tenders following the conclusion of the dialogue phase of a procurement, the contracting authority should require from bidders:
The bidder's final, technical proposal in terms of technical solution, delivery timescales, service levels, resilience and so on, which complies in full with all of the authority's requirements.
Acceptance of the proposed contract terms, subject to final clarification and fine tuning (extensive further contract negotiation is not allowed once this phase has been entered into).
Contracting authorities can award a contract on the basis of either:
Lowest price (this is not permitted, however, if using the competitive dialogue procedure).
The most economically advantageous tender (MEAT) (taking into account other elements of the tender as well as the price).
The chosen basis for the award must be stated in the OJEU Notice. The factors that will be evaluated to establish the MEAT (if the contract is being awarded on this basis) must be set out in either the OJEU Notice or the tender documents provided to bidders. The relative weightings of these award criteria must also be disclosed to the bidders
For more information on evaluation, see Practice note, Evaluation of tenders (www.practicallaw.com/2-386-8761).
In order to ensure that suppliers are able to seek an effective remedy if a contracting authority does not act properly, a formal debrief requirement has been incorporated into the Regulations.
This requires at least a ten-day standstill period (www.practicallaw.com/9-385-1366) and the disclosure of certain information to bidders that request a debrief. The specific requirements will depend on whether the procurement was started before or after 20 December 2009.
For more information on the requirements, see Practice note, Remedies Directive: the new regime: The standstill period (www.practicallaw.com/0-500-9991).
Once a contract has been entered into, the process is not complete. It is important that:
Contracting authorities monitor contractor performance to ensure that they get value for money. Action should be taken where necessary to ensure contract compliance.
Suppliers are required to record and provide any information that will be necessary for the contracting authority to re-tender the contract at the end of the term. This will be of greatest relevance in service contracts where workforce data may be required for the purposes of determining whether TUPE (www.practicallaw.com/8-107-7424) may apply.