Dropping PQQs on €200,000 Contracts – is it a Step in the Wrong Direction?

By Chris Browne on

QuestionnaireIt was recently reported in the trade press that pre-qualification questionnaires (PQQs) on public sector contracts under €200,000 will be axed. The reasoning behind this move is that PQQs on smaller contracts are “burdensome” and make the tendering process onerous for SMEs.

Furthermore, a “single passport” system is to be adopted, by which companies can enter pre-qualification data once on a standardised form and rely upon that single submission for all future tenders in the public sector.

These developments were praised by the CBI, with their enterprise policy director, Haley Conboy, arguing that “most smaller firms don’t have the capacity to handle [PQQs]”. Yet, in my opinion, disposing of PQQs could well be a step in the wrong direction. Furthermore, I believe that this initiative only serves to shroud a far greater issue for SMEs.

The Public Sector Viewpoint

A cynic might say that by dropping PQQs on contracts under €200,000, the Government is simply pandering to business groups like the CBI. However, one should also take a moment to consider these developments from the viewpoint of the public sector.

The simple fact is this: while €200,000 (and even €100,000) contracts may not have the same scope and scale of contracts many times larger, they can still be pivotal to the successful operation of public sector functions. While reducing overheads by removing PQQs might be considered a noble move, one must remember that the questionnaire has historically been  there for a reason.

In fact, the size of the contracts in question (which drives the logical thinking behind dumping PQQs) could in fact be considered a compelling reason to keep PQQs. After all, isn’t due diligence on smaller (and possibly some of the less stable) businesses even more important to ensure value and sustainability for the public purse?

The Real Challenge

In the grand scheme of things, filling in a PQQ is not that major an undertaking. Arguably, a far bigger challenge for SMEs in trying to deal with the public sector is the huge difficulties they face in getting onto public sector procurement frameworks (such as those run by the Government Procurement Service (GPS)). These frameworks represent a huge portal into public sector procurement, filled with opportunity. And yet, for the most part, they remain effectively inaccessible for the vast majority of SMEs, with the larger companies dominating that space.

Putting the issue of PQQs to one side for a moment, a far better option for SMEs would be for the Government to completely remodel how vendors are vetted and placed on those frameworks. That could make a huge difference to the prospects of SMEs in terms of landing public sector contracts and delivering value for money to the taxpayer. If I had the option of saving a little time filling in a PQQ questionnaire or being allowed greater access to public sector frameworks, I absolutely know which option I would take!

My point is this — the removal of PQQs for smaller contracts may be seen as a positive move, but in reality it smokescreens the options that central government should be pursuing to really level the playing field for SMEs. As it stands, this initiative really only amounts to putting a sticking plaster over a knife wound – and an old one at that.

The Single Passport System

I am drawn to the idea of a “single passport” system for PQQs. In fact, one could argue that a far better move for both SMEs and the public sector would be to impose a single passport system for all contracts (regardless of size). Each company would only have to fill in the PQQ once and public sector bodies would have the benefit of the questionnaires without the load being unduly burdensome on vendors of whatever shape or size.

Such an arrangement would obviously require that the PQQs are refreshed on a periodic basis (say every eighteen months) to account for changes in circumstances (such as publication of accounts, emergence of any legal disputes, financial changes, and so on). However, the result would be a win/win for both sides.

I am just baffled as to why the Government has chosen to go down the route of removing PQQs just on smaller contracts when a far better option would surely be to impose a single passport system across all contracts.

The Reality

If the Government wants to improve and open up the tendering process for SMEs while maintaining a bearable risk level, they need to make it much easier for businesses to engage with the public sector, while ensuring that unstable vendors can still be identified.

Filling in a PQQ can be a pain, but it isn’t the end of the world; a single passport system could make the issue largely redundant. On the other hand, addressing access to public sector contracts for SMEs is a far bigger issue and yet one that seems to have been swept under the carpet.

It is surely only a matter of time before the issue of procurement for SMEs raises its head again, but for the time being the likes of the CBI (and maybe those vendors in the ‘big-boys club’) seem to have been placated by the Government’s move to abolish PQQs. Just how big an impact this initiative will have remains to be seen. I, for one, shan’t be holding my breath…

Photo Credit: albertogp123