Pre-Qualification Public Procurement Conference 2018 Anna-Marie Curran CMG Events, Royal Marine Hotel, Dun Laoghaire Anna-Marie Curran 21 February 2018

Topics Pre-tender market engagement Developing robust selection criteria Pre-qualification of groups and consortia Reliance on parent companies and third parties Dealing with conflicts of interest Providing information to unsuccessful candidates Dynamic purchasing systems

Pre-Tender Market Engagement Specifically permitted to conduct preliminary market consultation with market prior to start of process to inform suppliers & to seek advice on planning and conduct of process Use of information gathered in preliminary market consultation must not have the effect of distorting competition or violating principles of transparency and non- discrimination Copymoore v. Commissioners for Public Works, judgment of 11 November 2016

Pre-tender market engagement (Procurement Journey Scotland) Factor Findings from Research www.procurementjourney.scot/route-3/route-3-develop-strategy-profilingcommodity-supply-market-analysis Market definition What does the market constitute; How is it described in industry Overview of commodities, products, services covered by segments Market Overview Size; Total turnover in the market per year; Total volume (quantity) of sales; Financial Ratios e.g. Profitability/ROI Overview of market by segments e.g., geographic area; customer base; sector Trade Associations Key Suppliers Please state if the commodity/service market is global, European, or national & identify the appropriate top 5 suppliers Market growth Trends in the past 2-4 years; Expected forecast 2-4 years; Growth values in terms of %, value or volume Overview of market by segments e.g., geographic area; customer base; sector; Influences affecting growth Trends and developments Trends in the market place (demand, technology, other developments, approaches etc); Key areas of technology supporting the market; Current technologies – maturity and capability; Technology development trends – next big thing & when? Rate of change; Impact on the business; Restrictions on technology; Access Supply market trends Major players in the market Supplier trends Overview of key suppliers; Developments in pricing; Discounting policies – volume / loyalty / risk:reward; “Cost plus “ pricing; “Market pricing” MAIN-39421748-1

Developing Robust Selection Criteria Public Sector: Suitability to pursue professional activity Economic & financial standing Technical & professional ability Utilities: Objective rules for the exclusion and selection of tenderers MAIN-39421748-1

Developing Robust Selection Criteria Must already have an office in Ireland (or Dublin) or experience in the Ireland (or Dublin) Must have annual revenue of €10m where contract value is €1m Must have at least 5 similar projects from the public sector only unless justified & non-discriminatory Must provide references for previous works of a higher value & scope than tendered contract unless justified & non-discriminatory Must have Irish qualifications at the time of tender submission (& difficult for foreign tenderers to comply within short timeframe) Must comply with a particular professional standard without using words ‘or equivalent’ MAIN-39421748-1

Developing Robust Selection Criteria Need for Clarity Clinton (t/a Oriel Training Services) v Department for Employment & Learning [2012] NIQB 2 Experience criterion: “This shall include dates, outcomes and explanations as to why the experience is considered to be relevant to the particular professional and technical groups being tendered for”. Clinton failed because “no data provided in respect of achievements, success rates or destinations into positive outcomes…” Must be susceptible of a uniform interpretation by all reasonably well informed and diligent tenderers “Outcomes" did not have a well recognised meaning in the industry Criterion expressed with insufficient clarity which led evaluation team into manifest error MAIN-39421748-1

Developing Robust Selection Criteria Are consequences of a “fail” clear? - MLS (Overseas) Limited v Secretary of State for Defence [2017] EWHC 3389 (21 December 2017) Q.6.3 “Describe in your response to Schedule 16… how you will ensure that a safe working culture is promoted and practised throughout your supply chain..” (Pass/Fail) CA argued that a RWIND tenderer would have understood that the consequences of a fail score would be an automatic, alternatively discretionary, rejection of the bid Court held no express statement that a fail score against Q.6.3 would result in automatic or potential rejection of the tender Although Appendix 2 to Section D explained that the responses to Question 6 would be marked “pass” or “fail”, and contained the scoring guidance against which the responses would be marked, the ITT did not set out the consequences of such scores MAIN-39421748-1

Robust Selection Criteria – Groups & Consortia Gaswise v. Dublin City Council [2014] IEHC 56 (14 February 2014) Turnover criterion: Must submit a statement confirming that your turnover exceeded €250,000 in any of the last three financial years… If tenderer proposes to use or rely on the financial resources of other entities.. it must establish that it shall have available… the financial resources of those entities which are necessary for performance of contract. Did ITT include a sufficiently clear & precise requirement which enabled all RWIND tenderers to uniformly understand the Turnover Requirement, in the case of a prime contractor/subcontractor tenderer, as being satisfied by submission of a statement that the combined turnover of the prime contractor & subcontractors exceeded €250k in any one of last 3 financial years? No - ITT did not make clear that this could be done so as to enable all tenderers so interpret it uniformly Contracting authority was in breach of its obligations of equal treatment and transparency in the formulation of the Turnover Requirement MAIN-39421748-1

Reliance on third parties & combining capabilities Reliance on Professional Qualifications Reg 63(2): with regard to criteria relating to the educational and professional qualifications …or to relevant professional experience, an economic operator may only rely on the capacities of other entities where those entities will perform the works or services for which these capacities are required… Reliance on Financial Standing Reg 63(5): Where an economic operator relies on the capacities of other entities with regard to criteria relating to economic and financial standing, the contracting authority may require that the economic operator and those entities be jointly liable for the execution of the contract. MAIN-39421748-1

Combination of capabilities Partner Apelski v Zarzad Oczyszczania, Case C-324/14 (judgment of 7 April 2016) “….it is conceivable that there may be works with special requirements necessitating a certain capacity which cannot be obtained by combining the capacities of more than one operator, which, individually, would be inadequate. In such circumstances, the contracting authority would be justified in requiring that the minimum capacity level concerned be achieved by a single economic operator or, where appropriate, by relying on a limited number of economic operators, in accordance with the second subparagraph of Article 44(2) of Directive 2004/18, as long as that requirement is related and proportionate to the subject matter of the contract at issue…”

Conflicts of interest Regulation 24 of SI 284 of 2016 Obligation for CAs to take measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures so as to avoid any distortion of competition and to ensure equal treatment of all economic operators. “Conflicts of interest” includes any situation where a relevant staff member or advisor has directly or indirectly a financial, economic or other personal interest which might be perceived to compromise his or her impartiality and independence in the context of the procurement procedure. What is CA’s Protocol/Policy on Conflicts of Interest? Has each member of evaluation team signed a Conflict of Interest Declaration?

Conflicts of Interest – Prior Involvement Regulation 41 of SI 284 of 2016 Where a candidate or tenderer (or an undertaking related to a candidate or tenderer) has advised CA or has otherwise been involved in the preparation of procurement procedure, CA shall take appropriate measures to ensure that competition is not distorted by the participation of that candidate or tenderer “Appropriate measures” must include (a) communication to other candidates and tenderers of relevant information exchanged; and (b) fixing of adequate time limits for receipt of tenders Candidate or tenderer shall only be excluded where there are no other means to ensure compliance with the duty to treat economic operators equally Prior to any exclusion, a candidate or tenderer must be given opportunity to prove that its prior involvement is not capable of distorting competition. Measures taken under Reg 41 must be documented in the Reg 84 Report Intrasoft International SA v European Commission, Case T‑403/12, judgment of 13 October 2015 MAIN-39421748-1

Conflicts of interest - previous employment Woods Building Services v Milton Keynes Council [2015] EWHC 2011 (TCC), judgment of 14 July 2015 Draft recommendation of the European Ombudsman in complaint 642/2008/TS against the European Commission The mere fact that Mr C had worked for all the shortlisted tenderers does not rule out the possibility that no conflict of interest could arise. Conflicts of interest may be more likely to arise in such circumstances. A person may be positively or negatively disposed towards companies for which he has previously worked, depending on the nature of the working relationship with each such company. The Ombudsman considers that a member of a tender evaluation committee, or an observer of a tender evaluation procedure, who has worked, or who is currently working for any of the tenderers may be considered, at the every least, as having an apparent conflict of interest. If the Commission had no choice but to use an expert that had worked for some of the tenderers, the Commission would need to make a special effort to ensure that the expert's work was not unduly affected by conflicts of interest. For example, the Commission would need to ensure that the identity of the individual tenderers was not disclosed. The Commission had not taken such measures in this case. MAIN-39421748-1

Conflicts – connected bidding entities Lloyd’s of London v Agenzia Regionale per la Protezione dell’Ambiente della Calabria (Case C-144/17) EU:T:2018:78, 8 February 2018 Two Lloyd’s syndicates participated in same tender process National legislation allowed exclusion of bidders that submit separate and competing tenders if they are linked by a relationship of control It would be counter to effective appication of EU law to systematically exclude affiliated undertakings Mere fact that tenders were signed by the same person cannot justify automatic exclusion National court had to ensure that the bids had been submitted independently MAIN-39421748-1

Providing information to unsuccessful candidates Provision of “reasons” to unsuccessful candidates at pre-qualification Not characteristics and relative advantages No standstill period If proceedings issued, procedure will not be suspended but there will be an automatic suspension on contract conclusion Contracting authority can bring an application to lift the automatic suspension at any time (BAM v. NTMA, [2015] IEHC 756, paragraph 9) MAIN-39421748-1

Pre-Qualification Public Procurement Conference 2018 Anna-Marie Curran CMG Events, Royal Marine Hotel, Dun Laoghaire Anna-Marie Curran 21 February 2018