The selection of suppliers "is a key stage in public procurement, where [contracting authorities] must gather information on, and make assessments of, potential suppliers’ technical and professional abilities, economic and financial standing and whether any of the exclusion grounds apply".
PPN 03/23 has introduced a new Selection Questionnaire ("SQ") for public procurements and supersedes Procurement Policy Note 08/16. The changes "are based on feedback from buyers and suppliers to improve the supplier selection process, and reflect changes to policy". The new PPN applies to all "contracting authorities in England, and contracting authorities in Wales and Northern Ireland that exercise wholly or mainly reserved functions". The revised standard selection questions "are to be in use at the latest by 1 June 2023, but can be used immediately".
Standard selection questions
The standard selection questions are structured in three parts:
- "Part 1 covers basic information about the potential supplier, such as the contact details, professional body memberships, details of parent companies [and] group bidding" etc.;
- "Part 2 - constitutes self-declarations of whether (or not) any of the exclusion grounds apply"; and
- "Part 3 asks for evidence and self-declarations of economic and financial standing and for self-declarations relating to technical and professional ability".
For works contracts, "contracting authorities should use the Common Assessment Standard (CAS), or PAS91, in place of the standard SQ template in pre-qualification of bidders".
The headline changes to the new SQ include:
- clarifying the changes that contracting authorities can make to the wording of selection questions;
- clarifying what is meant by "relying on another organisation";
- clarifying what information contracting authorities should seek from groups of suppliers;
- updating the financial questions and checks; and
- introducing additional questions on health and safety, supply chains, modern slavery, carbon emissions and data protection.
Deviations from the standard selection questions
Accompanying guidance to PPN 03/23 clarifies the circumstances in which a contracting authority can deviate from the standard selection questions. In summary, contracting authorities:
- may rephrase questions if necessary (e.g. to fit in a format allowed by an e-procurement platform), provided the information sought is the same as the information listed in the standard selection questions;
- must not omit the mandatory questions in parts 1 and 2 of the SQ; and
- should not deviate from the questions set out in part 3 of the SQ (however, if a contracting authority does deviate, they must report this to the Cabinet Office).
Reportable deviations will include changes to wording, as well as additional questions which are not specific to the individual procurement at hand. Reportable deviations must be reported directly to the Cabinet Office by way of a covering letter or email to email@example.com.
Relying on another organisation to meet selection criteria
Regulation 63 of the Public Contracts Regulations 2015 ("PCR 2015") "introduces the concept of a potential supplier relying on the capacities of other organisations to meet the selection criteria".
PPN 03/23 makes clear that "an organisation is relied on for the purposes of the standard selection questions if the potential supplier is relying on" either "the technical and professional ability" or "the economic and financial standing of the organisation in order to meet the selection criteria in part 3" of the SQ.
Seeking information from groups of suppliers
PPN 03/23 provides a number of clarifications around what is required from potential suppliers if they are bidding for a contract as part of a group or consortium. In summary:
- completion of part 3 of the SQ may differ, as contracting authorities may require the group of bidders to submit a single composite response;
- alternatively, contracting authorities may choose to ask all group members to complete their own section of part 3 of the SQ to enable selection checks to be undertaken on them; and
- contracting authorities should make it clear that any updates to a bidder's group or subcontracting arrangements should be provided during the procurement process so that bidder responses to parts 1 and 2 of the SQ may also be updated.
Economic and financial standing requirements
The guidance to PPN 03/23 clarifies the economic and financial standing ("EFS") requirements and selection criteria. In particular, the guidance states:
- contracting authorities should clearly state any proportionate minimum EFS requirements and selection criteria, and describe the methodology for assessing the same;
- the financial assessment method used depends on the requirement and questions used in this section should be relevant and proportionate; and
- where a supplier does not itself meet minimum financial requirements, an appropriate security or support may be given by a group or parent company.
PPN 03/23 introduces a number of additional questions. These include, for example:
- an optional health & safety question to assess "suppliers’ technical and professional ability in managing health and safety in their organisation";
- an optional question for Central Government contracts in respect of supply chains to "assess whether a bidder that intends to use a supply chain to deliver the contract, has effective payment systems in place to ensure the reliability of that supply chain";
- an optional question for Central Government contracts in connection with Modern Slavery "to ensure such risks are clearly identified and appropriately managed";
- an optional question around suppliers' carbon emissions to "ensure the necessary environmental management measures are in place"; and
- the concept of using "appropriate selection criteria relating to potential suppliers’ technical and professional ability in implementing…measures to comply with GDPR and to ensure the protection of the rights of data subjects" where a procurement for a contract involves "processing personal data".
In addition, the guidance to PPN 03/23 reminds contracting authorities to "allow potential suppliers to self-certify that they have, or will have in place, any required insurance in the event that they are awarded the contract".
PPN 03/23 will be of relevance to all public sector organisations that conduct public procurements. Given the substantive changes made to the SQ, each contracting authority should carefully examine their procurement processes (including their standard form documents and e-procurement platforms) when conducting new procurements and obtain specialist legal advice where appropriate.
If you are a public body considering how the latest measures in Procurement Policy Note 03/23 might affect your organisation, please contact a member of DWF's national public sector team to discuss how we might assist you.
Authors: Colin Murray, James Lupton, Douglas Jefferies, Alex Eaton, Dayna Chapman and Will Lloyd.