Legislation to Ban Low-Value PQQs – Bureaucratic and Waste of Government Time

As well as transposing the new EU procurement directives into UK legislation, the government is also planning to incorporate recommendations from Lord Young’s “Growing Your Business” report. But these changes aren’t going down well with many local authorities. The Local Government Chronicle reports:

Councils are being asked to prepare for three “major changes” which will affect the way they procure goods and services. Local government minister Kris Hopkins wrote to council leaders on 10th October telling them they would not be able to use pre-qualification questionnaires for “low-value contracts” which fall below the European Union threshold – currently £173,000.

He also said that councils would have to advertise all procurement opportunities worth £25,000 and above through procurement website Contracts Finder. Both announcements were made despite the fact that a Cabinet Office consultation on procurement was not due to close until 17 October."

Surely Hopkins can’t “tell” people this if the consultation period hasn’t even finished? Or is it one of those consultations where whatever is said, minds are firmly made up already? The LGA, which represents local authorities are not very happy in any case; they express their doubts about the PQQ issue very well in their consultation response.

“Councils sometimes need to use pre-qualification questionnaires ( PQQs) in lower value procurements to deselect suppliers, particularly where a large supply chain exists (for example in construction or ICT sectors) or where they may be issues of safeguarding and tendering a smaller number of suppliers reduces the potential risks for vulnerable people. (eg building or facilities management contracts relating to women’s refuges).

If councils are not able to use a two stage process to deselect, they will then be required to evaluate full tenders from all bidders. This will increase the cost and resource burden of evaluation for councils but more importantly will increase the burden on suppliers to bid”.

I’ve always disagreed with the “banning” of PQQs (even for low-value contracts). By all means educate people about when not to use them, but it should be left to the discretion of the procurement officer and organisation – in some cases, using a PQQ is the most effective way of running the procurement. All that will happen, and it is happening already, is that tenders will have a “section 1” that is, in effect, the PQQ. So bidders have to complete the entire tender, knowing that the major part of their response will not even be looked at if they fail section 1. How is that better than a two-stage process?

Despite the many achievements of the Minister, this is indicative of the less positive side of Francis Maude’s regime – an occasional reversion to a patrician approach that he and CCS simply know best, without any real objective justification. You might think hundreds of local councils and procurement practitioners are better placed to judge how they should run the detail of their own procurement process. It’s not exactly playing to the “localism” theme either, and legislating to ban PQQs seems like taking the proverbial legal sledgehammer to crack a fairly small good practice nut.

Interestingly, at the CIPFA procurement conference last week, Ed Green from Cabinet Office was asked about this, and a couple of delegates from industry bodies said they were opposed to it – as were most of the practitioners in the room, as far as I could tell.

I have more mixed feeling about Contracts Finder issue - I can see the pros and cons in that debate. Local government feels central advertising will undermine local efforts, and certainly the cost element needs consideration. Again though, is this something that really deserves legislation? And the final part of the Young trio of changes is the requirement that 30 day payment terms are passed down through the supply chain, which is fine in principle but VERY difficult to enforce.

Anyway, I hope any local authority that feels a PQQ is the best solution just goes ahead and uses that process. Then let’s see if the Crown Commercial Service will launch a prosecution – that would be fun!

Voices (2)

  1. Gordon Murray:

    Thanks Pete, I had missed this pending act of daftness.and wonder how many contracts below the Threshold have been awarded, and, perhaps more appropriately, managed by those advising on it. Dan is spot on that value is not an indicator of risk and that low value does not mean low risk. What also puzzles me is the exit strategy – if you legislate for something it will also needs legislation to scrap it once ‘the lights go on’. Of course we could be approaching an act of procurement disobedience and non-adhereance may just become the norm. Anyway, I had a related blog a few years ago which may be of interest: http://drgordy.blogspot.co.uk/2012/01/flaws-in-bbc-news-story-knowing-your.html

  2. Dan:

    PQQs aren’t just for tenderer selection, they’re a risk assessment tool as well. Financial standing, criminal convictions, health and safety compliance record etc. The use of PQQs, and the contents, must be determined by the level of risk, not purely the contract value.

    I’ll admit, there is some education needed on the use of PQQs – I’ve seen some shocking examples – but this is too heavy handed. It smacks of listening to suppliers too much at the expense of procurers. Suppliers hate anything that gets in the way of them winning work, and rightly so. However, its not just about what the suppliers want, its also about what the procuring organisations need.

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