Two recent animated movies, Disney’s Oscar-winning Encanto and Disney-Pixar’s Luca, coincidentally have the name ‘Bruno’ at the centre. In one, Bruno is the black-sheep brother who no one will discuss, but who has vital knowledge that can save the family. In the other, Bruno is the name given to the voice of reason inside a young boy’s head — a voice that his lesser angels encourage him not to heed.
These two movies were very much in my mind when I was asked recently to speak about the prequalification process in public procurement as it seems to me that the voice of reason is often disregarded when contracting authorities conduct a prequalification process. My best advice to contracting authorities is to always put the guiding principles of procurement at the centre of everything they do – equality, transparency and proportionality.
Prequalification is the systematic method by which candidates are eliminated from the competition in a public tender, based on a predetermined, rationally developed set of criteria.
The aim of a prequalification process is to ensure that there is a reasonable prospect that whoever is eventually awarded the public tender will have the required experience and be financially strong enough to see the contract through.
Contracting authority may eliminate candidates and may ask for clarifications if a tenderer has omitted information, provided this is done in an impartial and transparent manner.
I advise against using standard pre-qualification or sustainability questionnaires because these templates often contravene the central tenet of proportionality. For example, they may get you to ask tenderers for certain criteria simply because these are on the standard form, but requesting them, however, may not be proportionate or necessary in the bespoke tender.
A golden rule is that you should never request documents that you intend to do nothing with. If you are requesting certain financial documents from participants, make sure that you know why you’re requesting them, and that someone on your evaluation team is qualified to evaluate them.
The approach we recommend in the elimination process is to develop the selection criteria to be used for elimination, and conduct a qualitative assessment based on those criteria. You can think of these criteria as hurdles that participants need to clear. Hurdles may include statutory exclusions (for example being involved in a terrorism offense would be an automatic fail); pass/fail criteria (for example a level of professional indemnity insurance that tenderers must carry, violation of which would be an automatic fail); and selection criteria (these may include desirable professional affiliations or proof of economic and financial standing).
Make sure the hurdles do not trip you up, however: for example, automatically requiring that participants in a tender hold a certain level of professional indemnity insurance may automatically exclude good candidates from the competition. You may be requesting a level of insurance cover (perhaps because that level was in your pre-existing template) that is unobtainable for good professionals in the market. In this case, you may be excluding participants with the skills and capabilities to successfully carry out your contract. When you chose a ‘hurdle’, you need to know why and the consequences of having chosen such a hurdle. This must be considered carefully and is not just a ‘tick box’ exercise on a standard template.
Contracting authorities have very wide discretionary powers in evaluating tenderers and tenders, but if there is a manifest error, in the elimination process, the court may intervene. It is essential that you keep a proper audit trail, noting in your minutes any decisions you make in your procurement process (and there are many decisions that are taken).
There may also be scope for the court to intervene if your evaluation team does not have the experience or qualifications to evaluate tenderers or more precisely do not evaluate the tenders as per the set selection and/or award criteria. My advice is to think carefully about who you include in your evaluation team. This ‘decision’ should be clearly documented.
Finally, you may be open to challenge if you eliminate participants based on criteria that you failed to mention in the prequalification paperwork. Perhaps you ended up excluding participants because their experience was on large contracts, and the current tender is for a smaller job. If you have not mentioned this as a criterion in the prequalification, you cannot exclude a participant based on that criterion.
If you’re a contracting authority conducting a prequalification process, you can significantly limit the opportunities for legal challenges if you keep the key principles
of procurement — equality, transparency and proportionality – at the centre of every decision. Continually ask yourself: Is this document I’m requesting proportionate to this tender? Am I being equitable and transparent in all my dealings with participants, and in how I communicate with them?
This is the voice of reason I would encourage you to heed. The fundamental principles of procurement are a reliable guide that won’t let you down. You just need to listen to them.
Bruno Herbots is a founding partner in Herbots Solicitors and a lecturer in construction and procurement law.