17 January 2013 | Paul Barton

How to assess a supplier’s track record when considering bids for public contracts.

Last year was an interesting one for public sector procurement and outsourcing arrangements. The government is keen to avoid an encore of the G4S deal and the West Coast Main Line franchise fiasco, so departmental bodies are now required to assess a bidder’s previous performance before awarding certain new contracts.

This new policy applies to the award of all contracts for the purchase of IT/telecoms, facilities management or business process outsourcing where the total value of the deal will be more than £20 million. The Cabinet Office has published a Procurement Policy Note that sets out details of implementation and compliance.

Here are some tips on how to deal with the new policy.

1. Tell bidders how the policy will be applied in your procurement. A departmental body must include information about the new policy in all relevant procurement documentation. Bidders should establish what the minimum standards of reliability are in the context of the goods/services being purchased and tailor their submissions accordingly.

2. Assess the whole supply chain against the minimum standards of reliability. Departmental bodies should look at the past performance of subcontractors, other members of a consortium and group companies the bidder is part of. Even if a subcontractor is delivering a small aspect of the contract, its past performance will have an impact on the overall assessment. Bidders should consider applying the specified minimum standards of reliability to its supply chain and weed out non-compliant subcontractors before including them in a tender response.

3. Seek evidence of good performance. Bidders should emphasise their good track record by obtaining certificates from authorities they have worked with. If these are not forthcoming, a supplier could self-certify. Bidders will need to satisfy departmental bodies that any previous poor performance would not recur. The Cabinet Office will create a central repository of such certificates and related information against which to verify information.

4. Re-assess compliance at key stages. The suitability of the bidder may be assessed more than once at different stages in the procurement process, taking into account material changes to the bidders’ circumstances. Potential suppliers should be asked to update evidence previously provided to reflect more recent performance on existing or new contracts.

5. Take care when excluding bidders. Bodies must ensure that bidders are treated equally, transparently and without discrimination. Use a qualified panel to determine whether a bidder meets the minimum standards, document the decision and, where appropriate, seek legal advice before excluding the bidder. In some circumstances, it may be appropriate to allow the supplier to make representations.

☛ Paul Barton is a partner in the technology and outsourcing law group at Field Fisher Waterhouse