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Guest Blog: Should a company pay for pre-qualification in Scotland's public sector?

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Kenny Govan, Senior Procurement Officer at Strathclyde Partnership for Transport (SPT), wrote a guest blog for the Supplier Development Programme for the month of November 2020.

It has now been a number of years since the European Single Procurement Document (ESPD) was introduced into the Public Sector to replace the Scottish Pre-Qualification Questionnaire (SPQQ), and by in large this has been a success and has gone a long way towards standardising what was previously a very fractured process. Thankfully the Scottish Government has recognised the benefits of this and appears to have no plans come Brexit on 1 January 2021 to alter anything other than the name, by re-naming the ESPD to the Single Procurement Document.

Whilst ESPD (or 'SPD' as it is set to become) use is defined under Scots Law to Supply and Service contracts over the current EU threshold of £189k and £2m for works contracts, to be consistent, many public bodies have simply adopted this for contracts of all value - which I feel is a sensible approach, and leaves bidders in no doubt as to what will be required.

History of pre-qualifications

Pre-ESPD days, many public bodies made use of Pre-Qualifying Services such as Select Accredit, Constructionline and Achilles to name a few, which undertake an assessment of the basic “qualifying” criteria of a tender process such as insurances, financial health, qualifications, accreditations and in some cases, previous experience.

These companies then held this information which could in turn be accessed by a buyer - who could potentially use it to skip this part of the process in a tender. While free to use for public buyers, the major drawback of course for any company was that each of these "accrediting" organisations charged an annual fee, and when different public bodies use different accreditation organisations, this in turn could mean that a company may have to register and pay for accreditation with any number of these to cover all eventualities. Paid-for pre-qualifying and accrediting services as above still exist.

Transparent procurement practices through the ESPD

However, since the ESPD came into being, and especially for those more progressive buyers that use it for all contracts regardless of value, all of the criteria assessed by these “accrediting” organisations is already wholly covered, with the ESPD going much further and providing greater surety and protection.

In addition, the Scottish Government has a completely free of charge (but sadly, underused) service for bidders whereas they can upload and make available to buyers all of their documentation such as insurance, qualifications, etc. within the ESPD (Scotland) section of Public Contracts Scotland. Most buyers are indeed now so well versed in the use of the ESPD that to assess the information submitted by a bidder takes very little time and is in no way onerous.

This offers up the question of whether or not a company should pay for any sort of accreditation when bidding for a public sector contract.

Should a company pay for pre-qualification in Scotland's public sector?

Any public contract offered has to comply with the basic principles of non-discrimination, transparency and equal treatment, and there should be nothing in any tender which purposefully disadvantages one bidder over another, nor should there by anything hidden or ambiguous that a bidder is left unsure of. Procurement law in Scotland underpins these principles by setting out to level the playing field for bidders, especially smaller companies, start ups and those in the third sector.

It can be argued, therefore, that a buyer who purposefully sets out in a tender that membership of a pre-qualifying service is necessary to facilitate their acceptance of a bid, is by default discriminating between a company that has paid for this membership and one that has not, especially given the fact that all of this information is now so easily accessible and free of charge to buyers by other means.

Regrettably, however, this practice does still exist, especially within works tenders of a lower value (sub £2m) where buyers have a greater discretion as to the criteria to be applied and where the ESPD does not need to be used. Before deciding whether or not, therefore, to pay for these services, suppliers should be advised to contact the councils/public bodies that they wish to do business with and ask them if this is a requirement - and why.

My own personal opinion is that asking a company to effectively pay to bid for contracts is something that goes wholly against the principles of public procurement as it reduces their accessibility. There is very definitely a market for these organisations, and I’m sure they play an important role for private sector buyers, but there is no need for their use - and in fact - no place for them in the public sector.

The Supplier Development Programme has a number of free-of-charge online webinars which help suppliers understand and use the ESPD, and one in particular which provides a question by question walk through of the document. Rather than pay for an accreditation service for pre-qualifications, I suggest Scottish-based suppliers invest their time into the free support available in Tender Procedures and the ESPD, Helping You Bid Better: Examine the ESPD Question by Question, or self-select an alternative tender training course from SDP's wide range.

If you are a Scottish SME or supported business, you can login and view contact details for Kenny Govan at Strathclyde Partnership for Transport.

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