Procurement in a nutshell – selection criteria

The regulations are available in full here.

What’s new?

Permitted selection criteria are set out under regulation 58. They can relate to:

• suitability to pursue a professional activity;
• economic and financial standing;
• technical and professional ability

All Contracting Authorities (CAs) must ensure that their criteria are limited to those which are appropriate to ensure that the tenderer has the necessary capabilities to perform the contract and that the requirements imposed are proportionate and related to the subject matter of the contract.

Suitability to pursue a professional activity

CAs can require tenderers to be enrolled in one of the professional or trade registers listed in Schedule 5.

Economic and financial standing

CAs can require tenderers to:

• have a certain minimum yearly turnover, including a minimum yearly turnover in the contract area (this should not exceed twice the estimated contract value except in duly justified cases)
• provide information on their annual accounts showing the ratios (e.g. between assets and liabilities) (CAs have to specify the method and criteria for considering ratios in their procurement documents and these must be transparent, objective and non-discriminatory); and
• have an appropriate level of professional risk indemnity insurance.

(Regulation 58 (11) to (14) sets out specific rules on how these rules apply to lots, framework agreements and dynamic purchasing systems.)

Technical and professional ability

CAs can:

• Impose requirements to ensure tenderers have the necessary human and technical resources to perform the contract to an appropriate quality standard;
• Require that tenderers have a sufficient level of experience demonstrated by suitable references from contracts performed in the past.

N.B. These selection criteria are for use in above threshold procurements only.

Why is it important?

It is vital that CAs know and transparently set out the selection criteria that they will use in their procurements. CAs must understand the fundamental requirements of their procurement and tailor their selection criteria accordingly to make sure that the tenderer who ends up being appointed will have the capacity to perform the contract.

CAs should familiarise themselves with regulation 58 as it makes a number of changes to the Public Contracts Regulations 2006. This includes the restriction on the turnover requirements to twice the contract value and the newly available criteria in relation to technical capacity.

Remember, all requirements for participation and means of proof have to be clear from the outset and set out in the contract notice or invitation to confirm interest.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.