In the third article in a series on dynamic purchasing systems, Susie Smith looks at the process for award of contracts under a DPS, the issue of reviewing suppliers' suitability for continued membership, and remedies.
Award of contracts using a DPS
When a contracting authority wishes to award a contract using a DPS it must follow the restricted procedure rules, adapted in line with the DPS provisions in Regulation 34 of the Public Contracts Regulations 2015 (PCRs).
Invitation to tender
The contracting authority must invite all economic operators admitted to the DPS (DPS suppliers) to submit a tender. The invitation to tender (ITT) must be sent to all DPS suppliers simultaneously, in writing, using an electronic system. Where the DPS has been set up using categories then the contracting authority can send the ITT to DPS suppliers admitted to the relevant category to which the contract relates. The use of categories is discussed in my first article.
The content of the ITT must comply with the requirements for an ITT in a restricted procedure. The ITT must include:
- the electronic address where the procurement documents are available
- a reference to the published call for competition
- deadline for receipt of tenders
- language of tenders and references to supporting documents
The criteria for award of contracts under the DPS will have been set out in the OJEU contract notice or invitation to confirm interest where a PIN as a call for competition is used. The award criteria can be formulated more precisely in the invitation to tender. This does not permit the introduction of new award criteria at the ITT stage.
The PCR provisions on contract award criteria apply.
Statutory time limit
There are statutory time limits applying to the tender award stage. The minimum time limit for receipt of tenders is 10 calendar days from the date on which the invitation to tender is sent.
Time line for submission of tenders – general time limit
Sub-central authorities may reduce the 10 calendar day time period by mutual agreement with all of the DPS suppliers invited to tender. This is provided that all of the DPS suppliers invited to tender have the same time to prepare and submit their tenders.
Is it possible to have "deemed consent" to reduce the 10 day period? In our view it is necessary to obtain evidence of positive agreement (consent) to reduce the 10-day period from each of the DPS suppliers. Silence is not evidence of agreement in this situation nor is a failure to object to a reduced time period.
Is it OK to set up a DPS so that the time period is reduced as standard for every ITT issued? In our view this is unlikely to be acceptable. Time limits need to be considered on a case by case basis and must be appropriate to a particular procurement.
It is important to bear in mind that the 10 day period is a minimum time period. Contracting authorities must bear in mind the general requirement to fix time limits taking into account the complexity of the contract and time taken to draw up tenders.
Evaluation & award of tenders
Process of evaluation and award: Tenders must be evaluated and awarded in accordance with the evaluation and award provisions in the PCRs.
Standstill: There is no obligation to notify DPS suppliers of a decision to award a contract under a DPS, to provide a de-brief or to run a standstill period. In practice many of the contracts awarded under a DPS are likely to be low value, well below the EU thresholds and so not subject to these obligations in any event although providing feedback is good procurement practice.
For contracts above the EU threshold there is a risk that these could be declared ineffective where the rules about how the contract is awarded are breached. This means that running a voluntary standstill is often adviseable.
Contract award notice: There is a requirement to publish a contract award notice in the OJEU for contracts awarded using a DPS. The contract award notice must be despatched to the OJEU within 30 days of the contract award. Contracting authorities also have the option to group together contract award notices and publish them on a quarterly basis within 30 days of the end of each quarter.
Contracts Finder: Contracting authorities are also required to publish information on Contracts Finder in respect of contracts awarded under a DPS for contracts over £10,000 (central government) or £15,000 (sub-central authorities and NHS Trusts awarded under a DPS). Publication on Contracts Finder is required within a "reasonable time". CCS has indicated that a reasonable time period should be no longer than 90 days.
Review of DPS suppliers during the life of a DPS
Is it possible to exclude an existing DPS supplier from future participation in the DPS?
Exclusion grounds: It is possible, in certain cases, to exclude an existing DPS supplier from participating in a DPS where grounds for exclusion arise during the life of the DPS.
For example, a DPS supplier may have correctly confirmed in its original Request to Participate ("RTP") that none of the grounds for mandatory or discretionary exclusion applied at that date. If the DPS supplier is subsequently convicted of an offence which constitutes a mandatory ground for exclusion, the contracting authority is required to exclude the DPS supplier from the DPS subject to the statutory exceptions and "self-cleaning" provisions.
One of the "dynamic" aspects of a DPS is that economic operators have the right at any time in the life of the DPS to apply to participate. In our view this means that, unless a formal judicial exclusion period is in force, where an excluded DPS supplier re-applies for membership then the contracting authority ought to consider the new RTP. This should include considering evidence of any self-cleaning measures taken, where appropriate. Where the RTP information satisfies the selection criteria and evidence of self-cleaning, where provided, is satisfactory then that supplier should be readmitted to the DPS.
The same principles will apply to discretionary grounds for exclusion, such as poor contractual performance.
The CCS guidance also takes the view that economic operators previously excluded at selection stage are free to reapply for membership of a DPS.
Failure to participate in DPS tenders: In our view it may be difficult to justify excluding a DPS supplier on the grounds that it has failed to participate in tenders. There are no provisions in the PCRs obliging a DPS supplier to participate in a tender. The underlying idea of a DPS is that it is a an active system responsive to the needs of all parties, including DPS suppliers, who may have good commercial reasons for choosing not to participate in some tenders. A DPS is an electronic system so the administrative burden of issuing an ITT to DPS suppliers who do not respond is low.
The CCS guidance also takes this view.
Low/non-viable tenders: Where DPS suppliers submit very low tenders the abnormally low tender provisions in the PCRs will apply. This could lead to rejection of a tender on the grounds that it is abnormally low but does not provide grounds for exclusion from the entire DPS unless investigation of the abnormally low tender leads to a more serious finding giving rise to a ground for exclusion, such as evidence of collusive behaviour.
When and how should DPS suppliers be re-assessed during the life of the DPS?
It is a good idea to review the qualification of DPS suppliers during the life of a DPS unless the DPS is of very short duration. This is to ensure that DPS suppliers continue to be of appropriate standing and quality throughout the life of the DPS.
There are no rules on when or how to review DPS suppliers' exclusion and qualification information. There is a specific provision permitting contracting authorities to ask DPS suppliers to submit renewed and updated self-declarations and requiring DPS suppliers to respond within five working days.
One possible approach is to ask DPS suppliers to confirm that their exclusion and selection status is not changed and to update the relevant information as necessary before the award of a particular contract. This approach ties in with principle of self-certification by economic operators using the standard PQQ or ESPD, with verification of the successful tenderer's information prior to contract award.
Another approach is undertake a regular review of all DPS suppliers, for example on a six-monthly or annual basis.
The contracting authority will need to weigh up the pros and cons of ad-hoc or regular review of exclusion and selection information including consideration of the risks of awarding contracts to unsuitable DPS suppliers and the administrative burdens on the contracting authority and DPS suppliers.
The usual rules on remedies apply to the establishment and operation of a DPS and also the award of contracts under a DPS.
Economic operators may apply for interim remedies such as applications to suspend a process or revisit a decision. For example, an economic operator could challenge the introduction of new award criteria in an ITT or an economic operator which learns that a contracting authority is making direct awards of contracts under a DPS without issuing an ITT or running a competition could ask the courts to suspend the operation of the entire DPS.
Where a claim is issued in relation to a decision to award a contract under the DPS it seems likely that this would trigger an automatic suspension of the award of that particular contract, but not the operation of the DPS as a whole.
There is also the possibility, in limited cases, to apply for a declaration of ineffectiveness in relation to an over the EU threshold contract awarded under a DPS. This possibility can be de-risked if the contracting authority complies voluntarily with standstill requirements.
These remedies are in addition to the remedy of damages.