Today’s Telegraph includes an article about the new Public Contracts Regulations 2015, which will come into effect at the end of this month. As well as implementing the European public contracts directive (Directive 2014/24/EU), these new Regulations introduce a number of measures, collectively known as the Lord Young Reforms, that aim to help small firms win more government contracts.
One of these reforms, the removal of the pre-qualification questionnaire (PQQ) process, while undoubtedly well intentioned will instead significantly and adversely affect the ability of small firms to win public sector contracts.
All firms being considered for a government contract will still require to be qualified, e.g. to have adequate financial strength, appropriate levels of insurance, quality management processes and a track record of having successfully completed similar contracts. The ban on PQQ’s, simply moves the qualification process from a separate preliminary stage and instead embeds it in the first stage of the full tender evaluation.
This means that instead of completing a relatively short questionnaire to demonstrate their qualifications, a candidate for a public contract will have to provide exactly the same information as part of their tender, but will also have to complete a full tender proposal. A full tender proposal will often consume a very significant amount of time and resources.
If a company would have failed the qualification exercise under the PQQ system they will still fail, but the process will have cost them much, much more. In my view it is inevitable that over time this will lead to far fewer small companies submitting tenders for public contracts.
There will also be a much greater cost imposed on the public bodies who are evaluating the tenders submitted. Instead of evaluating perhaps 5 or 10 tenders from qualified candidates, they will have to carefully evaluate all of the tenders that are submitted to them.