Public Contracts Regulations 2015 A Constructionline guide
Introduction The construction industry has a high risk and complicated procurement process. This has been recognised in a Cabinet Office guidance document for PCR 2015, which has given the industry specific criteria, including: A range of procurement thresholds, which require different processes and methodologies The use of a PQQ within certain thresholds (PAS91:2013 has been recommended for this purpose). The use of a PQQ has also been disallowed for some thresholds. What are the Public Contracts Regulations 2015? In February 2015 the Public Contracts Regulations 2015 were introduced. The new regulations follow on from the EU Directive 2014/24/EU and are now part of UK law. They apply to all public sector contracts. The purpose of PCR 2015 is to streamline, accelerate and simplify the public sector procurement process above and below certain thresholds, whilst making it easier for SMEs to compete for contracts on a level playing field. It also ensures that public sector organisations use transparent processes to select suppliers. The simplest way to ensure that you comply with this guidance is to adopt PAS 91:2013 and advertise your contracts as required. THE PURPOSE OF THIS BROCHURE Constructionline has prepared this brochure to help you understand how the Public Contracts Regulations 2015 have impacted your stage one supplier assessment processes and how your membership with Constructionline can assist you at every step of the way. What is PAS 91:2013? PAS 91:2013 is a standardised pre-qualification questionnaire, which has been developed to reduce the need for suppliers to complete a variety of different pre-qualification questionnaires for different, and in some cases the same, clients. Developed by the British Standards Institute (BSI), the question set has been commissioned by Government. It s not enough to adopt the spirit of PAS 91! In order to align to PAS 91:2013, a company must make sure that their pre-qualification questions follow the exact wording, ordering and numbering conventions laid out in the PAS 91:2013 questionnaire. If their stage one supplier assessment deviates from the structure and layout of PAS 91:2013 in any way, the company cannot say that they are aligned to PAS 91:2013, adopting the spirit of PAS 91 by using some of the ordering or numbering conventions is not enough. The uptake of PAS 91:2013 has been limited, the construction industry would save millions, rising to billions of pounds a year through efficiency savings if PAS 91:2013 were used more widely, as more and more companies would align to and recognise a standardised question set for pre-qualification. 1 2
How Constructionline helps in the procurement and advertising process PCR 2015 REQUIREMENT PCR 2015 states that when you advertise your contract to an open market, the opportunity must be published on Contracts Finder, in addition to other portals: Advertise your contracts valued above the threshold for works nationally on TED (Tenders Electronic Daily). Advertise your contracts valued above the threshold for goods and services on regional portals such as London Tenders, Sell2Wales, and NEPO. Under PCR 2015, the use of the pre-qualification stage has been limited, depending on the value of the contract. The requirements are as follows: Contracts valued between the threshold for good & services and the threshold for works, and above: The pre-qualification stage still applies. Use of PAS 91:2013 is advised. Contracts valued between the standing order limit and the threshold for goods & services: Use of the pre-qualification stage is prohibited. Instead, suitability assessment questions, drawn from a PQQ, can be asked at the ITT stage. As a buyer you are required to assess each responding supplier s commercial, technical and financial competencies, to determine whether they meet the minimum criteria of the contract. The PCR 2015 requirements aim to ensure a simpler and more consistent approach to supplier assessment through recommended use of PAS 91:2013 where the pre-qualification stage applies. For contracts valued between the standing order limit and the threshold for goods & services, where the pre-qualification stage is not permitted, contracting authorities can ask suitability assessment questions at the Invitation to Tender stage, provided that they are relevant to the subject matter of the contract. PUBLISH OPPORTUNITY TO MARKET ISSUE PQQ SUPPLIER ASSESSMENT SHORTLIST SUPPLIERS (ITT) AWARD CONTRACT SUPPLIER MANAGEMENT Reference Constructionline as an exemption within your portal advertisements to make considerable efficiency savings in prequalification. Responding Constructionline suppliers will have already been verified to Stage One of the pre-qualification process. Typically, over 90% of responses are from Constructionline registered suppliers. Constructionline remains a useful tool at Stage One of the pre-qualification process: Where pre-qualification applies, Constructionline can be used as an exemption with a supplier assessment that aligns to PAS 91:2013. Where pre-qualification is prohibited, Constructionline can be used as an exemption to suitability assessment questions. We verify suppliers information to Stage One of the assessment process for you, using our PAS 91:2013 aligned question set. Registered Constructionline members will have undergone the PAS 91:2013 aligned assessment process to achieve membership. What s more, for a small fee we ll assess non-registered suppliers to Stage One for you. Learn more about our One-Off Assessment Service, See page... By undertaking the supplier assessment process on your behalf, Constructionline can save you roughly 300 per supplier. We provide suitability assessment questions via our PAS 91:2013 aligned question set, helping you to determine a supplier s suitability at the Invitation to Tender stage. Therefore, Constructionline can be used as an exemption at this stage. We provide you with the necessary information held on each verified supplier at Stage One of the assessment process to help you make an informed decision on which supplier to award the contract to. After you ve awarded the contract, Constructionline can help with the ongoing monitoring of your suppliers information, including their health and safety data, insurances, financial details and environmental policy. We ll alert you of any concerns to help you reduce risk. You ll retain control of your suppliers. Constructionline allows you to add/remove suppliers on your lists with complete autonomy. HOW CONSTRUCTIONLINE HELPS PCR 2015 contract value thresholds EU threshold for works EU threshold for goods & services Standing order limit 4.01 million 164,176 (public sector) 106,047 (central government) 25,000 (public sector) 10,000 (central government) 3 4
Supplier Assessment The contract value thresholds As a set of requirements for the procurement process of public sector authorities, PCR 2015 applies where works, services or supply contracts exceed certain value thresholds. How Constructionline can help you, whatever the size of your project Constructionline remains a very useful tool for public sector buyers, both above and below the EU threshold for works ( 4,104,394 million). It can be used within the procurement process at the 3 levels covered below EU threshold. The 2015 provisions introduced the rules that must be followed in the PQQ process when a contract is valued above those thresholds. Our schematic below provides helpful guidance on how PCR s contract value thresholds impact the pre-qualification stage and how Constructionline can help to simplify the process. PUBLIC SECTOR 4,104,394 4.1m OJEU threshold for works CONTRACT VALUE PUBLIC CONTRACT REGULATIONS 2015: IMPACT ON THE PQQ STAGE Between 164,176 and 4,104,394 CHANGES TO PCR REGULATIONS Above the OJEU threshold for works ( 4.104,394) No change - use of PAS 91 advised. Above 164,176 New level introduced in PCR 2015 Section 4. Can still use the pre-qualification stage (PAS 91). HOW CONSTRUCTIONLINE HELPS Continue to use Constructionline as an exemption to reduce work by 95%, and ensure compliance to PAS 91. Continue to use Constructionline and be PAS 91 compliant. Between 4,104,394 and 164,176 A pre-qualification stage can be still used within the procurement process. Constructionline can be used as an exemption question at stage one of the pre-qualification process, meaning they don t need to provide information at stage one of the pre-qualification process. For values above 4,104,394 million (the OJEU threshold for works) Between 164,176 and 25,000 A pre-qualification stage is prohibited. However, Constructionline can be used to provide suitability assessment questions presented in the form of pre-qualification questions. These can be used as a part of a single stage tender process to help assess the appropriateness of a bidding supplier. Below 25,000 The Constructionline system can be used as a source of verified suppliers for approved lists. With over 34,000 registered contrators, consultants and material suppliers on our system, you can run an intelligent search to find suppliers that meet your project criteria. The use of PAS 91:2013 is advised by the Cabinet Office, as such, Constructionline can be used as an exemption question. We offer a dynamic purchasing System (DPS) product to assist you in the management of your suppliers for projects above OJEU level. 164,176 25,000 0 Between 25,000 and 164,176 Below the 25,000 standing order limit Below 164,176 Use of the pre-qualification stage prohibited. Suitability Assessment questions can be included in the ITT/Tender stage as long as they are relevant and proportionate. Below 25,000 There is no change - this is traditionally where Approved Lists and Quick Quotes are used. Continue to use Constructionline as an exemption within the suitability assessment questions, both helping suppliers and saving time in the tender assessments. This will also mean the suitability assessment questions are aligned to PAS 91. Continue to use Constructionline to manage Approved Lists and sourcing Quick Quotes. It s important to note that although PCR 2015 has removed the use of a pre-qualification stage at certain values, it has not removed the use of pre-qualification across the board. Instead, for contracts valued below between 164,176 and 25,000, suitability assessment questions presented in the form of pre-qualification questions can be used. The pre-qualification stage and therefore the use of PAS 91:2013, which Constructonline aligns to, is recommended for many contract value thresholds in the Cabinet Office guidance document for PCR 2015. 5 6
Advertising In order to comply with PCR 2015, public sector organisations must also ensure that new opportunities, above thresholds, are published on Contracts Finder (in addition to, or instead of any other portal or publications route they may currently use). The threshold for publishing is 10,000 contract value for Central Government and 25,000 contract value for non Central Government contracting authorities, including NHS Trusts. However, authorities are only required to advertise an opportunity on Contracts Finder if its value is above the value stipulated in the organisation s existing standing order. Advertising with Constructionline As a buying organisation, you are required to advertise your contract opportunities openly to suppliers in the industry. We assist you in advertising your contracts with complete transparency and in line with all current legislation, whilst saving time and cost in the process for you organisation. Place an advert in regional and/or national portals By referencing Constructionline as an exemption for suppliers at Stage One of the assessment process in your advert, you ll save a large amount of time and money when assessing responses from our members. Regional advertising portals are used for project works that are within a particular location/region - valued above are the threshold for goods and services. National portals hold advertisements for large national projects - valued above the threshold for works. Other Constructionline services: One off assessments For any responses you receive for your advertised work opportunities from suppliers that aren t Constructionline registered, our team of assessors will handle the hard work for you. 1 2 3 Financial assessment of non-registered suppliers - We ll assess the suppliers financial information to ensure that their accounts are up-to-date and represent the business ability to undertake your works. Option 1 - All information must be collated by the buyer and provided in Excel format to the Constructionline assessors for processing. Option 2 - Buyer to send full audited accounts and references to Constructionline assessors, who will then extract the relevant information and undertake the assessment process. Full assessment of non-registered suppliers - We ll assess a suppliers entire stage one pre-qualification information on your behalf, to ensure they have met all the necessary requirements to work with you. Check that registered suppliers meet your requirements/project criteria - We ll run a report on the registered suppliers within our system, to find the assessed suppliers who meet your project requirements. THE OPPORTUNITIES NOTICE BOARD The Opportunities Notice Board (ONB) is our free tool, where you can advertise your work opportunities exclusively to Constructionline suppliers. You can set specific supplier criteria which companies need to meet before they can express their interest, including: area of operation, work category, notation value and health and safety status THE INFORMATION WE PROVIDE YOU Once we ve completed the assessment, our team will provide you with a report indicating whether each supplier has passed or failed the assessment process. At your request, we ll also provide you with more details regarding reasons why a supplier may have failed the assessment. As all expressions of interest will be made from registered Constructionline suppliers, you can rest assured that each supplier has met the required standards to work with you. Please note: We won t award the contract to a supplier for you; it ll still be up to you to choose who you want to work with. To help you generate expressions of interest, our marketing team will send out an email communication on your behalf to our supplier members that fit the criteria you have specified. 7 8
Other Constructionline services: Dynamic Purchasing System (DPS) What is a Dynamic Purchasing System? A Dynamic Purchasing System (DPS) is similar to an electronic framework agreement, with two exceptions, new suppliers can join at any time and it is to be run as a completely electronic process. The rules relating to the usage and creation of a DPS come from PCR 2015. However, in brief: A DPS can be set up by contracting authorities, including central purchasing bodies. A DPS should be set up for identified types of requirement, which may be divided into categories of products, works or services. Suppliers must be able to apply to join a DPS for free. There are 2 stages to a DPS process How does a DPS benefit you? A DPS can streamline procurement for both suppliers and authorities; suppliers don t have to demonstrate suitability and capability every time they wish to compete for a public sector contract, and the award of individual tenders can be quicker than under some other procedures. A DPS is more flexible in some respects than frameworks, particularly as suppliers may join it at any time during its period of validity, meaning that suppliers are not locked out for the duration as they are with traditional frameworks. CASE STUDY: THE NHS LONDON PROCUREMENT PARTNERSHIP 1 2 The initial setup stage All suppliers who meet the selection criteria and are not excluded must be admitted to a DPS. Contracting authorities must not impose any limit on the number of suppliers that may join a DPS. The supplier must be assessed by the contracting authority within 10 working days of their application. Constructionline can be used to select the suppliers, through our database of over 34,000 PAS 91:2013 aligned registered members or our one off assessment service. The second stage Individual contracts are awarded during the second stage. In this stage, the authority invites all suppliers on a DPS (or the relevant category within a DPS) to bid for the specific contract. In January 2016, NHS London Procurement Partnership (LPP) partnered with Constructionline to launch the first Dynamic Purchasing System (DPS) for the construction industry. To simplify the process for suppliers, LPP accepts Constructionline membership in lieu of its full pre-qualification questionnaire. And, for all suppliers joining a DPS who aren t Constructionline registered, Constructionline assess them on behalf of LPP as a part of our One-Off Assessment Service. Edward James, Workstream Lead at LPP explains, Our Partnership exists to support the needs of our members and other public sector bodies on the procurement of any goods or services and enable an NHS trust or other public sector organisation to purchase goods, works or services through an open market of potential suppliers. 9 10
FAQ 1 What is Constructionline s position or view regarding your relevance now PCR 2015 is in place? 4 Due to the regulation changes, are there implications on the pre-qualification process and services like Constructionline? Constructionline remains a very useful tool for public sector buyers. Firstly, it can be used to run Approved Lists and as a source of audited suppliers for Quick Quote procurement processes. Secondly, for OJEU adverts, it can be used as an exemption question to save suppliers from having to provide information for an advert that they have already supplied to, and have verified by, Constructionline. This use as an exemption question is equally applicable for sub-ojeu contracts and, where the new threshold applies, it can be used to make the provision of suitability assessment data easier for both the supplier and the public sector buyer. 2 The new EU regulations state no pre-qualification stage can be used below EU threshold. How does Constructionline fit in seeing as it has a long standing history as a pre-qualification database? There are 3 different areas covered by below EU threshold : 1) Between 4,104,394 and 164,176 a pre-qualification stage can still be used within the procurement process. 2) Between 164,176 and 25,000 a pre-qualification stage is prohibited, however suitability assessment questions may need to be used and Constructionline can help the supplier and buyer with the provision of verified data. 3) Below 25,000 Constructionline can help administrate Approved Lists and be a source for Quick Quotes. 3 What actions can Local Authorities take to mitigate the effects of the new EU regulations? In many ways there is little change. A public sector buyer needs to run open and transparent processes to select suppliers. For contracts between 25,000 and 164,176 the use of a pre-qualification stage is prohibited, however it is likely that similar data will need to be collected and assessed. The difference is that this is now done in a single tender stage through the use of suitability assessment questions. These may be the same as pre-qualification questions (provided the questions are relevant and proportionate to the contract opportunity) and as such Constructionline can provide the necessary verified answers. With regard to the pre-qualification process - see answer 2 above. Constructionline can be used in a variety of ways - see answer 1 above. 5 Please can you clarify the role of Contracts Finder with regard to the requirement for Local Authorities to publish any contract opportunities above 25,000? Furthermore, does this prevent our continued use of Request for Quotes among pre-selected and/or prequalified suppliers? The new Public Contract Regulations offer a degree of flexibility for the public sector buyer. Higher thresholds for advertising can be stipulated in their standing orders which were in place before the regulations came in, as such, the higher value applies rather than 25,000. Therefore, Authorities would only be required to advertise an opportunity on Contracts Finder if its value is above the value stipulated in the standing order. 6 Is the assessment process used by Constructionline to sign up suppliers classified as a pre-qualification questionnaire, and therefore not allowed under the new Public Contract Regulations? See answer 1 above. It is important to note that the new regulations are removing the use of a pre-qualification stage for certain thresholds of procurement activities, not removing the use of pre-qualification across the board. Instead, for those below EU threshold, suitability assessment questions presented in the form of pre-qualification questions can be used as part of a single-stage tender process to help assess the appropriateness of a bidding supplier. Constructionline therefore has multiple uses, including being a source of answers for public sector buyers and suppliers for suitability assessment questions. 11 12
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