European Union Legislation and Procurement Reform (Scotland) Act 2014: reference pack

5. Preparation Stages

Preliminary Market Consultations

For EU regulated procurements, it has now been made clear that public bodies may conduct market consultations. These consultations are for the preparation of the procurement and informing potential bidders of their procurement plans and requirements, as long as this activity ensures the equal treatment of suppliers and does not have the effect of distorting competition.

Preliminary Market Consultations can:

• help stimulate the market thereby increasing competition and reducing dependency on a limited number of suppliers;
• help determine the feasibility of the requirement, the best approach to the procurement including market capacity and the possible risks involved;
• be used to foster collaboration in the marketplace which can provide opportunities for smaller and/or more specialist suppliers;
• encourage suppliers to ask questions/raise queries at an early stage.

Mechanisms that may assist with early market engagement include the use of prior information notices, bidder days and webinars. Careful consideration must be given to determine how best to inform interested parties of proposals for consultation and how to conduct the consultation. No matter what method of consultation is chosen, it is essential that an effective audit trail of these interactions is created.

Prior Involvement of Candidates or Tenderers

Sometimes a potential supplier has provided advice to a contracting authority, or has been otherwise involved in preparation for a specific procurement and then wishes to participate as a tenderer in that procurement process.

In this situation a contracting authority cannot automatically prohibit that economic operator from participating in the procurement process, but they must take appropriate measures to ensure that competition is not distorted by their participation. The contracting authority must provide all candidates/tenderers with relevant information exchanged or arising out of the economic operator’s prior involvement and they must also fix adequate time limits for return of tenders.

Where it is not possible to avoid a distortion of competition arising from the prior involvement of that potential supplier in the preparation of the procurement procedure, then the discretionary exclusions permit public bodies to exclude that potential supplier.

Conflicts of Interest

A conflict of interest situation can arise where members of a public body or of a contractor working for the public body, who is involved in the procurement procedure or may influence the outcome of the procurement procedure have, directly or indirectly, a financial, economic or other personal interest, which might be perceived to compromise their impartiality and independence in the context of the procurement procedure.

Public bodies must take “appropriate measures” to prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures so that any distortion of competition is avoided and to ensure the equal treatment of economic operators.

Public bodies may exclude an economic operator from participation in a procurement procedure where the conflict of interest cannot be remedied by other less intrusive measures.

Combatting Corruption and Preventing Conflicts of Interest in Concession Contracts

The Concessions Contracts (Scotland) Regulations 2016 require contracting authorities/entities to prevent, identify and remedy conflicts of interest in procurement procedures so as to avoid any distortion of competition and to ensure the transparency of the award procedure and the equal treatment of all candidates and tenderers.

This is consistent with the Public Contracts (Scotland) Regulations 2015.

However, in contrast, the Concessions Contracts (Scotland) Regulations 2016 limit the measures adopted to prevent, identify and remedy conflicts of interest to those which “shall not go beyond what is strictly necessary to prevent a potential conflict of interest or eliminate a conflict of interest that has been identified”.