The Utilities Contracts Regulations 2016

Electronic auctions E+W+N.I.

53.—(1) Utilities may use electronic auctions in which—

(a) new prices, revised downwards, or

(b) new values concerning certain elements of tenders,

or both, are presented.

(2) Utilities shall structure the electronic auction as a repetitive electronic process, which occurs after an initial full evaluation of the tenders, enabling them to be ranked using automatic evaluation methods.

When electronic auctions may and may not be used

(3) Service contracts and works contracts which have as their subject-matter intellectual performances (such as the design of works) which cannot be ranked using automatic evaluation methods, shall not be the object of electronic auctions.

(4) In open or restricted procedures or negotiated procedures with a prior call for competition, utilities may decide that the award of a contract shall be preceded by an electronic auction when the content of the procurement documents, in particular the technical specifications, can be established with precision.

(5) In procurements where the content of procurement documents, in particular the technical specifications, can be established with precision, an electronic auction may be held—

(a) on the reopening of competition among the parties to a framework agreement as provided for in regulation 51(4) to (6); and

(b) on the opening for competition of contracts to be awarded under a dynamic purchasing system.

(6) The electronic auction shall be based on one of the following elements of the tenders—

(a) solely on prices where the contract is awarded on the basis of price only;

(b) on prices or on the new values of the features of the tenders indicated in the procurement documents, or on both, where the contract is awarded—

(i) on the basis of the best price-quality ratio; or

(ii) to the tender with the lowest cost using a cost-effectiveness approach.

Preliminary requirements

(7) Utilities which decide to hold an electronic auction shall state that fact in the contract notice, in the invitation to confirm interest or, where a notice on the existence of a qualification system is used as a means of calling for competition, in the invitation to tender.

(8) Where utilities have decided to hold an electronic auction, the procurement documents shall include at least the following details—

(a) the features, the values for which will be the subject of electronic auction, provided that such features are quantifiable and can be expressed in figures or percentages;

(b) any limits on the values which may be submitted, as they result from the specifications relating to the subject-matter of the contract;

(c) the information which will be made available to tenderers in the course of the electronic auction and, where appropriate, when it will be made available to them;

(d) the relevant information concerning the electronic auction process;

(e) the conditions under which the tenderers will be able to bid and, in particular, the minimum differences which will, where appropriate, be required when bidding;

(f) the relevant information concerning the electronic equipment used and the arrangements and technical specifications for connection.

Admissibility of tenders

(9) Before proceeding with the electronic auction, utilities shall make a full initial evaluation of the tenders in accordance with the award criteria and with the weighting fixed for them.

(10) A tender shall be considered admissible where—

(a) it has been submitted by a tenderer which has not been excluded under regulation 78(1) or 80(1), and which meets the selection criteria; and

(b) it is in conformity with the technical specifications without being irregular, unacceptable or unsuitable.

(11) In particular, tenders—

(a) which do not comply with the procurement documents;

(b) which were received late;

(c) where there is evidence of collusion or corruption; or

(d) which have been found by the utility to be abnormally low,

shall be considered irregular for the purposes of paragraph (10)(b).

(12) In particular—

(a) tenders submitted by tenderers that do not have the required qualifications; and

(b) tenders whose price exceeds the utility's budget as determined and documented prior to the launching of the procurement procedure,

shall be considered as unacceptable for the purposes of paragraph (10)(b).

(13) For the purposes of paragraph (10)(b), a tender shall be considered unsuitable where it is irrelevant to the contract, being manifestly incapable, without substantial changes, of meeting the utility's needs and requirements as specified in the procurement documents.

Commencement and structure of the auction

(14) All tenderers that have submitted admissible tenders shall be invited simultaneously by electronic means to participate in the electronic auction using, as of the date and time specified in the invitations, the connections in accordance with the instructions set out in the invitation.

(15) The electronic auction may take place in a number of successive phases.

(16) The electronic auction shall not start sooner than 2 working days after the date on which invitations are sent out.

(17) The invitation shall be accompanied by the outcome of a full evaluation of the relevant tender carried out in accordance with the weighting provided for in regulation 82(9).

The formula to be used

(18) The invitation shall also state the mathematical formula to be used in the electronic auction to determine automatic re-rankings on the basis of the new prices or new values submitted, or both.

(19) Except where the most economically advantageous offer is identified on the basis of price alone, that formula shall incorporate the weighting of all the criteria established to determine the most economically advantageous tender, as indicated in the notice used as a means of calling for competition or in other procurement documents.

(20) For the purposes of paragraph (19), any ranges shall, however, be reduced beforehand to a specified value.

(21) Where variants are authorised in accordance with regulation 64, a separate formula shall be provided for each variant.

Communication of information

(22) Throughout each phase of an electronic auction the utilities shall instantaneously communicate to all tenderers sufficient information to enable them to ascertain their relative rankings at any moment.

(23) Utilities may also communicate other information concerning other prices or values submitted, provided that this is stated in the specifications.

(24) Utilities may also at any time announce the number of participants in the current phase of the auction.

(25) In no case, however, may utilities disclose the identities of the tenderers during any phase of an electronic auction.

Closing the auction and awarding the contract

(26) Utilities shall close an electronic auction in one or more of the following manners—

(a) at the previously indicated date and time;

(b) when they receive no more new prices or new values which meet the requirements concerning minimum differences, provided that they have previously stated the time which they will allow to elapse after receiving the last submission before they close the electronic auction; or

(c) when the previously indicated number of phases in the auction has been completed.

(27) Where utilities intend to close an electronic auction in accordance with paragraph (26)(c), whether or not in combination with paragraph (26)(b), the invitation to take part in the auction shall indicate the timetable for each phase of the auction.

(28) After closing an electronic auction, the utility shall award the contract in accordance with regulation 82 on the basis of the results of the electronic auction.