Public Contracts Regulations 2015 - Regulation 59

Regulation 59 - European Single Procurement Document

Regulation 59 brings us one of the big changes introduced by Directive 2014/24/EU and the new Regulations: the possibility of using a self-declaration by economic operators instead of having all participants providing all the documentation at the selection stage. The European Single Procurement Document (ESPD) allows economic operators to self-declare its compliance with exclusion grounds and selection criteria of regulations 57, 58 and 65. Personally, I am in favour of any measure that reduces the transaction costs for economic operators and in the face of it, the ESPD makes perfect sense by doing so. However, as usual the devil is in the details and there are a few details worth talking about, particularly for contracting authorities.

First, although this is a self-declaration, economic operators should inform in it where the documents that provide evidence can be obtained and its commitment to do so "upon request and without delay" (paragraph 4 and 8). It remains to be seen what it means "upon request" - ie, can it be a general condition of participation set from the start? - or "without delay" - how many days will economic operators have to provide the documents? When we ran the simplified open procedure pilots in Wales, we had a similar system in place we established a 10 calendar day window for the contract winner to provide the documentation and never had any problems. In fact, most replied within 24 or 48 hours with the documents.

Second, in case the documentary evidence is available on any national database (and the economic operator stated that fact in the EPSD), including foreign ones, the contracting authority has the obligation of checking itself that information (paragraphs 5 and 11), reversing the onus of who needs to provide/find the documents from the operator to the authority. This is compounded by the fact that if the contracting authority already has a valid and actual EPSD from the economic operator then it should not need to re-confirm the information contained on it.

Third, as it stands the EPSD raises an enormous risk particularly in countries where participation or performance bonds are not used extensively (ie UK) or where pre-contractual liability is not well established (ie England and Wales). It leaves open the door for collusion between economic operators who partake in a procedure and then decide not to provide the necessary documentation to sign the contract (assuming it is not available on a database). The contracting authority will be tempted to go straight to the second best offer on the table which, in turn, in a collusion scenario, can do exactly the same. The solution for this problem is simply to either include a bond (which has the downside of affecting SMEs) or simply include the possibility of nuking the procedure and going back to the start.

As I said above, in general I agree with this measure for the time and cost-savings it involves for both economic operators and public authorities. Yes, contracting authorities are effectively seeing their previous practice of detailed pre-qualification questionnaires be gutted from the inside out but it was time UK contracting authorities got used to the open procedure instead. I think the EPSD may provide a significant "nudging" effect to that transition in England, Wales and Northern Ireland. It is time that we move from detailed questions at selection stage to simply enunciate the selection criteria.

I stand by my comment that overall the transaction costs for contracting authorities will also go down, as only the information of one economic operator will be analysed even if it implies more work for that specific operation. My beliefs are based on the pilots we run in Wales in 2013 where the biggest cheerleaders of our changes to practice were the public procurers and ancillary functions (risk, legal and health and safety) as their workload per procedure went down significantly.

In Wales there has been some criticism of the EPSD as it renders (almost?) obsolete the Supplier Qualification Information Database (SQuID), a solution created in Wales to solve the PQQ problem. The SQuID is composed by a bank of questions that contracting authorities can set for a selection stage and the accompanying answers provided by the economic operators, foreclosing the need for answers to be re-entered. The difference between the EPSD and SQuID is that the first is pan-European and cross-border, solving the whole problem for most countries, although it looks alien in a country where the selection stage is composed by very detailed questions instead of an enunciation of selection criteria. The second solves the symptoms caused by a "best practice" arising from asking way too many questions at the selection stage, but not cause, that is using the transaction costs of the selection stage to filter out economic operators before the tender stage. The first solution makes sense in many countries and looks alien in the UK, whereas the second is the other way around.

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