Government issues policy on taking past performance of bidders into account

The Cabinet Office has published the Government's policy on ensuring bidders’ past performance is taken into account in future procurements.

It admitted that "in the past, there has not always been a consistent approach to the consideration of the past performance of bidders to ascertain whether they can confidently be relied on to perform the obligations under the contract to be awarded."

The procurement policy note, Taking account of bidders’ past performance, advises departmental bodies, amongst other things, to ask for specified information – including certificates of performance – about past performance in the last three years.

The Cabinet Office said the note would apply to Whitehall departments, their executive agencies and non-departmental public bodies when procuring goods and/or services in respect of information and communications technology, facilities management or business process outsourcing where the total anticipated contract value is £20m or greater.

“This PPN applies in relation to framework agreements only where it is anticipated that there will be call-off agreements in respect of such goods and/or services with an individual anticipated value of £20 million or greater (excluding VAT),” it added.

The Cabinet Office said the application of the policy note beyond its initial scope would be kept under review.

It suggested that since the note set out the Government's view of procurement best practice on how departmental bodies are to apply minimum standards for reliability based on past performance, other contracting authorities might wish to apply its principles with suitable modifications.

The policy note warned: “Departmental bodies should note that, although the application of minimum standards for reliability is important, it is only one aspect of the overall assessment of the suitability of bidders in any procurement.

“Departmental bodies should, therefore, seek information as to all other aspects of bidders' technical or professional ability (for example, experience and resources) as well as their economic and financial standing and assess these against relevant standards.”

The Cabinet Office also issued a reminder for departmental bodies that, in setting and applying minimum standards for reliability based on past performance, and in assessing all other aspects of a bidder's suitability to be awarded a public contract, they needed to observe the fundamental principles of equal treatment and non-discrimination, transparency and proportionality.

The policy note, which can be viewed here, is supplementary to, “and should be implemented alongside”, existing guidance in relation to selection documentation.

The note applies from 8 November to the award of all in-scope public contracts and framework agreements for which an OJEU notice has not yet been published.

The standard Government pre-qualification questionnaire is to be updated to reflect the contents of the note and will be re-issued in due course, the Cabinet Office said.

The note summarised the Cabinet Office’s approach as follows:

  • “Under Directive 2004/18/EC and the Public Contracts Regulations 2006 ("Regulations"), contracting authorities are entitled to establish minimum standards of technical or professional ability (including minimum standards for reliability based on past performance) which must be met by potential bidders for public contracts.
  • To ensure consistently good delivery of public services and value for money, it is important that bidders with the requisite standards of technical and professional ability are selected. In the past, there has not always been a consistent approach to the consideration of the past performance of bidders to ascertain whether they can confidently be relied on to perform the obligations under the contract to be awarded.
  • Accordingly, to provide greater assurance about performance and greater protection for the taxpayer and recipients of the services they provide, Departmental Bodies should in future procurements include minimum standards for reliability based on past performance…. Departmental Bodies should ask for specified information (which will include certificates of performance) about past performance in the last 3 years. They should then satisfy themselves: a) that the principal contracts of those who would provide the goods and/or services have been satisfactorily performed in accordance with their terms; or b) where there is evidence that this has not occurred in any case, that the reasons for any such failure will not recur if that bidder were to be awarded the relevant contract.
  • If the Departmental Body remains unsatisfied that the principal contracts of those who would provide the goods and/or services have been satisfactorily performed, it should exclude that bidder on the grounds that it has failed to meet the minimum standards of reliability set.
  • The other aspects of technical and professional ability of all remaining bidders who have met the minimum standards of reliability should then be assessed by the Departmental Body as specified in its procurement documentation.”

The policy note also summarises the actions that procuring departmental bodies should take.

In relation to actions to take during in-scope procurement, the document covers: informing bidders of the policy; pre-procurement; the OJEU notice; evidence required; consortia, sub-contractors and successor entities; provision of certificates by departmental bodies; verification of information provided by bidders; transparency and the exclusion of bidders for failure to achieve minimum standards; re-assessment during subsequent stages in the procurement process (not relevant to procurements adopting the open procedure).

Philip Hoult