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Monday, November 12, 2012

Past performance as a measure of responsibility

The UK law firm CMS Cameron McKenna LLP, as previously noted in prior posts, provides a valuable free resource of various legal issues called Law-Now, including procurement issues.  

The article noted below describes the newly adopted scheme in the UK to formalize consideration of bidder past performance in certain government acquisitions.  As always, you are advised to read the source document (at the link); I cut and paste and re-arrange and paraphrase in ways which may not do justice to the source.

Taking Account of a Bidder’s Past Performance  
There has been no consistent approach to considering previous performance in assessing a bidder’s ability to perform a contract.  The government has now published the PPN to ensure that, in certain cases, public bodies will now be required to include minimum standards for reliability based on past performance.  As a result, suppliers will now be required to give more detailed information and should expect that such information will be carefully checked within government.
The PPN applies to Departments, Executive Agencies and Non Departmental Public Bodies (together, “Departmental Bodies”) procuring goods and/or services in respect of information and communications technology, facilities management or business processing outsourcing with a total anticipated value of £20 million or more (excluding VAT).
In order to assess a bidder's past performance, Departmental Bodies should:
· specify the minimum standards relating to past performance and information required in relation to those standards in the OJEU notice.
  · verify information provided by any bidder in relation to past performance by checking with any reasonably available source of information and giving the bidder an opportunity to make representations on any further information obtained.
  · apply the minimum standards for reliability based on past performance to exclude bidders which fail to meet them. 
  · assess whether a bidder continues to meet the minimum standards for reliability at specified subsequent stages in the procurement process, particularly in complex or lengthy procurement processes.
To demonstrate compliance with the minimum standards for reliability based on past performance, bidders are required to provide:
  · a list comprising a statement of the principal goods sold and/or services provided by the bidder in the previous three years.  Bidders (including consortia or group entities) are entitled to satisfy the minimum standards for reliability by reference to the past performance of members of a consortium or other group entities; and 
  · certificates from those to whom the goods and/or services on the list were provided.  If the certificate does not state that the goods and/or services provided satisfactorily, bidders are required to provide information to show that the reason for such failure will not recur in the performance of the contract being procured.  In the event that a certificate cannot be obtained, the supplier may provide a self-certification. 
It should be noted, however, that although the application of minimum standards for reliability is important, it is only one aspect of the overall assessment of the suitability of bidders in any procurement.  The other requirements of technical or professional ability and economic and financial standing should continue to be assessed for all bidders who have met the minimum standards of reliability.
Past performance has long been one factor among others to be considered by US governmental bodies in the determination of bidder or offeror responsibility.  

The ABA Model Procurement Code as adopted on Guam defines responsibility to mean having "the capability in all respects to perform fully the contract requirements and the integrity and reliability which will assure good faith performance".  (5 GCA § 5201(f).)  Guam and Model regulations specifically identify "a satisfactory record of performance" as one of the factors to consider in determining responsibility.  (2 GAR § 3116(b)((2)(A)(ii).)   

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