Mary Dunne

7 February 2013

Procurement Conference

To what extent is it possible to reward good prior performance or punish poor past performance

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Q To what extent is it possible to reward good prior performance or punish poor past performance?

Under the current EU & Irish public procurement regime.

Under the Proposed new Public Procurement Directives.

A Past performance can be assessed at:

Exclusion Stage: Articles 45 Directive 2004/18/EC & Reg 53 S.I. 329/2006.;

Pre-Qualification/Section:

Article 48 Directive 2004/18/EC & Reg 53 S.I. 329/2006

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Mandatory Exclusion

Article 45(1), Directive 2004/18/EC & Reg 53(1), SI 329/2006.

A Contractor Authority shall exclude a candidate or tenderer where “to the knowledge of the authority [a candidate or tenderer] has been convicted of an offence involving:

– participation in a prescribed criminal organisation;– corruption;– fraud; or– money laundering

Evidence• What evidence can the Contracting Authority rely on in order to exclude a candidate or

tenderer?

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Discretionary Exclusion

Article 45(2) Directive 2004/18/EC &Reg 53, SI 329/2006 A Contracting Authority may exclude a candidate or tenderer in the case of:

– bankruptcy or insolvency

– found guilty of professional misconduct determined by a professional body

– grave professional misconduct provable by means the authority can demonstrate

– failure to pay social security, tax or levies

– knowingly provided false or misleading information to the authority

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Mandatory Exclusion Grounds

Directive 45(2) & (3) - Regulation 53

– Judicial record or– A certificate issued by a competent judicial or administrative

authority. • These must be accepted as proof. • The authority must ask tenderers to supply these

documents but if it has doubts can obtain them themselves.– If the country in question does not issue the above documents if

they do not cover the case in question the authority can accept:• A declaration on oath; or• A solemn declaration made before a person authorised for

the purpose under law.

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1 Bankruptcy/Insolvency

Art 45(2)(a) and (b) – Reg 53(4)(a) and (5)same as mandatory exclusion evidence

2. Professional Misconduct

same as mandatory exclusion evidence e.g. certificate of Good Standing from the Law Society

3. Failure to pay social security or tax

Same as mandatory exclusion or a Tax Clearance Certificate

Discretionary Exclusion Grounds

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Discretionary Exclusion Grounds 4 Grave Professional Misconduct

“Provable by [any] means that the authority can demonstrate”.

No guidance is given in the Directive or the Irish Regulations.

Decision of the Court of Justice in Praxis v Porzta Polska SAA contracting authority cannot automatically exclude an economic operator where the Contracting Authority has terminated a previous contract with that economic operator where the economic operator is responsible.

Grave Professional Misconduct; “Denotes a wrongful intent or negligence of a certain gravity….Incorrect, imprecise or defective performance of a contract….does not automatically amount to grave misconduct. In addition in order to find whether “grave misconduct exists, a specific and individual assessment of the conduct…must be carried out.

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Draft Directive

• Art 55(3)(d) – may exclude– “where the economic operator has shown significant or persist deficiencies in the

performance of any substantive requirement under a prior contract or contracts of a similar nature with the same contracting authority”.

• To apply this ground of exclusion– Contracting authorities shall provide a method for the assessment of contractual

performance that is based on objective and measurable criteria and applied in a systematic, consistent and transparent way;

– plus, assessment to be communicated and opportunity to object to the findings and to obtain judicial protection;

– and operator may provide evidence demonstrating its reliability.

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Draft Directive (contd)

• Art 55(4)– Any candidate facing exclusion may provide evidence demonstrating its’

reliability despite the existence of the relevant ground for exclusion.– Candidates shall prove that it has compensated any damage, caused by

the criminal offence or misconduct, clarified the facts or circumstances in a comprehensive manner by actively collaborating with the investigating authorities and taken concrete technical, organisational and personal measures that are appropriate to prevent further criminal offences or misconduct.

• Art 55(3)A contracting authority may exclude an economic operator where it is aware of any violation of obligations established by Union or international legislation in the field of social and labour and environmental law.

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The Pre-Qualification Stage

PQQ stage may serve two distinct purposes

1. Minimum Pass/Fail standardsDoes operator meet minimum standards of technical or professional ability?

Article 44(2) – must be included in the tender notice.

2. ShortlistingWhich operators should be selected to tender/negotiate/participate in dialogue?

Both minimum and selection criteria are governed by the same provisions in Directive 2004/18/EC and the Irish Regulations• Article 48 Directive 2004/18/EC• Regulation 57, 58 and 59 of S.I. No 329/2006

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Technical & Professional Ability

“Technical and/or professional abilities of the economic operators shall be assessed and examined in accordance with paragraphs 2&3”

– Experience in last 5 years (works) or 3 years (supplies and services) accompanied by certificate of satisfactory performance or references

– Key team allocated to the contract

– Description of technical facilities and measures used to ensure quality

– Description of R&D facilities

– A check on the production and technical capacity, quality measures and R&D facilities

– Educational and professional qualifications of the contractor/managerial staff and in particular those persons responsible for providing the services

– Environmental management measures

– Average annual manpower and number of managerial staff for the last 3 years

– Statement of tools, plant or technical equipment available

– Samples descriptions and/or photos of products to be supplied

– Quality control certificates confirming conformity with Specification

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Selection Criteria

• The list of criteria in Article 48 and Regs 57-59 is exhaustive.

• C-76/81 Transporoute [1982] ECR 417.

• Commission v Italy [1992] ECR I-3401.

• Art 48(5) Directive 2004/18/EC, 57 (4) and 59(4) provide that the contracting authority may assess the operatory’s “skills, efficiency, experience and reliability”.

• However, assessment of skills, efficiency, experience and reliability must be within the context of the criteria listed before in Article 48.

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Award Criteria

• Past Performance not relevant and should never be included in award criteria

Lianakis – Case C – 532/06