New EU Procurement Directives – selecting suppliers

Back to the new EU Directives and some of the changes that will be converted into national legislation shortly. There are a number of changes that directly affect how suppliers are selected.

Wider exclusion criteria

An interesting move, supported strongly by the UK, is to allow past performance to be taken into account when assessing bidders. They can now be excluded from a process where the supplier “has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract … which led to early termination, damages or other comparable sanctions.” You can also kick them out if they are involved in child labour or human trafficking, collusion with other bidders or trying to influence the tender process.

We've commented previously on similar moves in the UK. Conceptually, it is hard to disagree with the principle. But practically, things are less clear cut. Again, this can’t just become a set of subjective biases or a lever for corruption, aiding the choice of favoured suppliers. So buyers will have to show a clear audit trail, and a fair approach, in order to exclude bidders. And even then, it will be very open to challenge.

Indeed, we suspect  it won’t prove to be  a major issue actually, simply because the fact that it would be a fairly easy point for suppliers to challenge will mean this provision just doesn’t get used much.  It will be fascinating to see in a couple of year’s time just how many cases there are of exclusion across the public sector per country.  Not many is my bet.

Award criteria

The politicians are excited about greater emphasis on the use of ‘most economically advantageous tender’ rather than lowest price to select suppliers. We don’t think lowest price is used much anyway, so we’re not as excited. And it does look like you can still use lowest price anyway if you really want to, so this seems like a lot of fuss about nothing.

Actually more interesting is the greater flexibility, in some cases at least, over selection criteria (used to shortlist bidders) and award criteria (used to select the winning supplier/s). This has been a source of confusion for years. The new regulations attempt to simplify this – buyers can take into account the relevant skills and experience of individuals at the award stage where relevant (e.g. consultants, lawyers etc.), which crazily was not supposed to happen under previous rules.  So this is a wholly positive step.

Changes to time limits

The statutory minimum time limits by which suppliers have to respond to advertised procurements and submit tender documents have been reduced by about a third. That will be welcomed where contracting authorities have genuine time pressures, but may be another move that actually restricts competition and allows the favourites or favoured to win, particularly if they get tipped off about upcoming procurements in advance.

More next week …

Voices (2)

  1. Dave Mischief:

    I think the whole “major change” to procurement has been a lot of fuss about nothing, mostly the changes just bring the Regs up to date with what is custom and practice – even it it wasn’t fully compliant with teh previous Regs.

    With regard to the exclusion criteria it will depend upon what is Transposed in the UK Regs however it will mean that contract management processes will need to be improved. Many times I’ve experienced occasions where the “client” has said, at retendering time, that the performance has been poor and they don’t want to use the supplier again but when asked for written details of where poor performance has been discussed with and communicated to the supplier this hasn’t been done. I’d recommend Contracting Authorities define what they consider to be poor performance and start putting that into tender/contract documents so that both sides know what may lead to exclusion.

  2. b+t:

    As a taxpayer, I wonder: which kind of procurement failiure costs me more?

    A). A good supplier wins the bid but somehow a brilliant supplier didn’t bid or didn’t win.

    B) A useless supplier wins a tender and screws it up.

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