What steps/issues should a contracting authority consider when engaging a consultant to help develop a public contract specification? LexisPSL Public Law, in partnership with Peter Ware of Browne Jacobson LLP, explain.
Research for this question - submitted to LexisPSL Public Law - is limited to covering public contracts regulated under the Public Contracts Regulations 2015, SI 2015/102 (PCR 2015).
The PCR 2015 include provisions which require contracting authorities to ‘take appropriate measures’ to deal with conflicts of interest and avoid the distortion of competition. The rules are found in PCR 2015, SI 2015/102, reg 24 (Conflicts of interest) which provides that:
‘(1) Contracting authorities shall take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures so as to avoid any distortion of competition and to ensure equal treatment of all economic operators.
(2) For the purposes of paragraph (1), the concept of conflicts of interest shall at least cover any situation where relevant staff members have, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the procurement procedure.
(3) In paragraph (2)—
“relevant staff members” means staff members of the contracting authority, or of a procurement service provider acting on behalf of the contracting authority, who are involved in the conduct of the procurement procedure or may influence the outcome of that procedure;
“procurement service provider” means a public or private body which offers ancillary purchasing activities on the market.’
As the definition of staff members in PCR 2015, SI 2015/102, reg 24(3) includes members ‘of a procurement service provider acting on behalf of the contracting authority’, this covers consultants who have helped to develop a public contract specification. If the use of a consultant would create a conflict of interest (or have the potential or perception of having created one), the contracting authority must take steps to demonstrate that any conflict of interest has been addressed, or does not exist. For instance, a conflict of interest could occur if it was considered the consultant could influence the procurement process or has information which would give his employing organisation an advantage in the procurement itself.
For contracting authorities to comply with PCR 2015, SI 2015/102, reg 24, they may include questions in the Selection Questionnaire and ongoing disclosure requirements throughout the procurement process which address conflicts of interest. Furthermore, the contracting authority may for example, require information barriers to be put in place, to ensure that those individuals who have provided advice to the contracting authority and/or who have commercially sensitive information are prevented from passing that information on to a bid team within their employer. If a consultant who had assisted with developing a public contract specification then submitted a bid for the contract, such methods must be used by the contracting authority to ensure all bidders are treated fairly.
PCR 2015, SI 2015/102, reg 41 (prior involvement of candidates or tenderers) deals with the prior involvement of tenderers in the procurement process, providing that:
‘(1) Where a candidate or tenderer…—
(a) has advised the contracting authority…, or
(b) has otherwise been involved in the preparation of the procurement procedure,
the contracting authority shall take appropriate measures to ensure that competition is not distorted by the participation of that candidate or tenderer.
(2) Such measures shall include—
(a) the communication to the other candidates and tenderers of relevant information exchanged in the context of or resulting from the involvement of the candidate or tenderer in the preparation of the procurement procedure; and
(b) the fixing of adequate time limits for the receipt of tenders.
(3) The candidate or tenderer concerned shall only be excluded from the procedure where there are no other means to ensure compliance with the duty to treat economic operators equally in accordance with regulation 18(1).
(4) Prior to any such exclusion, candidates or tenderers shall be given the opportunity to prove that their involvement in preparing the procurement procedure is not capable of distorting competition.’
Therefore, where a consultant has been used during the procurement process, the steps in PCR 2015, SI 2015/102, reg 41(2) should be followed to limit any distortion of competition. The consultant may look to include measures such as information barriers as discussed above.
Exclusion from bidding
There is no express requirement in the PCR 2015 that a consultant who assisted with the public contract specification must be excluded from bidding. However, if there is a risk of a conflict of interest occurring which could not be remedied, the contracting authority has the discretion to exclude them from bidding (see PCR 2015, SI 2015/102, reg 57(8)(e)). The contracting authority also has this discretion to exclude such a bidder where they have been involved in the preparation of the procurement procedure as detailed in PCR 2015, SI 2015/102, reg 41, and any distortion of competition cannot be remedied by other means (see PCR 2015, SI 2015/102, reg 57(8)(f)).
This potential exclusion means consultants who assist with the procurement process have an interest in ensuring conflicts of interest are effectively managed.
This article was originally published in LexisPSL Public Law. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor. If you would like to read more quality content like this, then register for a free 1 week trial of LexisPSL.