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Major breakthrough in PQQ reform

The European Parliament is set to vote on major changes to procurement rules [PQQ] which could see turnover requirements relaxed, larger contracts split up into lots and the introduction of a standard, reusable self-certification document

The proposed new EU Classical Procurement Directive 2013, which has emerged following three-way negotiations between the European parliament, commission and council of ministers, contains a raft of changes which could shake-up the way public projects are tendered [pre-qualification questionnaire] if fully adopted in the UK.

As well as plans to ditch the need for practices to prove how much they make - the requirements would become non-mandatory and capped to a maximum of twice the contracts’ value - there are also proposals to accelerate procedures, define and embed whole life costings in the process, and increase opportunities for consortia bids, with bidders not required to be legal entities when bidding only upon contract award.

The news is a significant coup for the RIBA which has been campaigning for fairer procurement for more than three years. In May 2012 the institute submitted its report: Building Ladders of Opportunity to government which argued for the reduction of bureaucracy, including the reduction of millions of pounds of wasted bidding costs and the simplification of pre-qualification questionnaires [PQQs] and the removal of barriers to market access.

Walter Menteth, chair of the RIBA Procurement Reform Group, gave a ‘cautious welcome’ to the latest draft of the directive.

He said: ‘On the ground we remain bogged down in bureaucracy and procurement gold-platting and there is little evidence to suggest that UK procurement culture has [recently] improved.

‘But the new EU Directive 2013 will represents a significant reform of public sector procurement. 

‘If the UK Government engages with the new opportunities for more creative procurement, exercising intelligent judgement, flexibility and new procurement routes, this could lead to a significant change in construction culture.’

Former RIBA President Angela Brady was less circumspect, adding: ‘It is bloody good news and what we’ve been campaigning for for three years.’

Anthony Hudson at Hudson Architects said: ‘This is very welcome news. The existing situation can hardly be worse - a bureaucratic madness that does not allow small practices to participate. The next procurement hurdle to be tackled ought to be the absurd levels of PI insurance that are often required - again locking out too many talented small practices. Anything that helps small practices navigate the bean counting world of procurement has to be welcomed.’

Philip Bintliff of Hebden Bridge-based Studio BAAD said: ‘We always think PQQs [pre-qualification questionnaire] should be a maximum two sides of A4 and notices should make it clear what threshold values are required. This is a step in the right direction - very welcome.’ 

The final text which is unlikely to be changed, is expectred to go before the European Parliament in either late September or early October.

EU directive headlines:-

  1. There is a definitive commitment and provision for the EU renegotiating the raising of threshold values at the next round of international trade negotiations.
  2. There will be full e-procurement within 2.5 years.
  3. A new standard e-based reusable European Single Procurement Document allows self-certification of documentation requirements for submissions to participate, or tender.
  4. The European Single Procurement Document can provide links to national data registers, potentially including the RIBA Chartered Practice scheme.
  5. Negotiated procedures are simplified and incentivised.
  6. The principle of whole life costs are defined and embedded as pivotal within the new directive.
  7. Procedures are accelerated, with the opportunity to call for competition within Prior Information Notices.  The min. bid timescale in certain circumstances will now be 15 days.
  8. Turnover requirements become non mandatory and are capped to a max. 2x a contracts value
  9. The opportunities for consortia bids is enhanced, with bidders not required to be legal entities when bidding, only upon award
  10. There is a presumption in favour of splitting large contracts into more numerous lots unless justifiable. (through an “apply or explain” principle)
  11. MEAT (Most Economically Advantageous tender) becomes the default for construction industry tenders.
  12. Some procedures allow that cost in award selection maybe a fixed price allowing competition on quality criteria only
  13. The principle of intellectual services is introduced, and then such intellectual services are ruled out as suitable for the electronic auction procedures.
  14. The EU makes clear its determination of the legal position of Bodies covered by Public Law. This would indicate confirmation that most UK RSLs should be excluded.
  15. The opportunities for R&D are improved.
  16. There is greater opportunity for creative procurement, with more flexibility, greater options and new routes to procurement along with the introduction of innovative partnerships.
  17. There is a strong emphasis on pre-market engagement, to improve briefing and market engagement, prior to tendering.
  18. Provision is made for abnormally low bids to be rejected  
  19. Better payment terms for tier 2 suppliers and allowance for more widespread introduction of project bank accounts, is embodied. ng the specific skill sets of designers eg based on their specific design/ drawing expertise (aesthetics).
  20. Opportunity for greater emphasis to be placed on assessing and selecting the specific skill sets of designers eg based on their specific design/ drawing expertise - potentially including aethetics
  21. Contract performance conditions may incl. for instance –Accessibility, design for all, economic, environmental, innovative requirements, social and employment related requirements

Readers' comments (3)

  • Excellent, long overdue.

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  • Item 10 will help a lot if implimented. The practice of "Bundling" a number of small projects into one big commission no matter what the geographical separation denys many small practices the opportunity to grow by simply counting them out of the "Bundle".

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  • I am really pleased for Walter Menteth who devoted much of his life over the past 2-3 years to the issue of public procurement reform with the RIBA Procurement Reform Group and with the support of Angela Brady.

    Their objective has been to open up public procurement to all architects, the majority of whom work in SMEs, but especially to enable access to public sector projects to small practices. The revised Directiive responds to the main concerns of thresholds, tier 2 suppliers, turnover requirements, MEAT and 'bodies covered by public law'.

    Let us hope the directive is implemented swiftly in the UK and the increased efficiency contributes to the economic upswing. This is good news for architects, the construction industry and the wider economy.

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