Annex 2
Letter from Edge Ellison, Solicitors to
Quarry Products Association
THE NEW
DEAL FOR
AGGREGATES
I am writing to you following our discussion
yesterday regarding one aspect of your continuing discussions
with the Government on the New Deal. This is the question of the
development of the "Q" Mark. As I understand it the
current proposal on this issue is for a separate entity (probably
a company limited by guarantee) to be established for the purposes
of awarding the "Q" Mark to companies which meet a set
of objective standards in terms of environmental performance.
It would then follow that these companies, once they had achieved
this status, would be able to apply to local authorities to go
onto their tender lists. It would be accepted that this would
not be the only criteria for being placed on such lists as local
authorities have existing powers and duties through standing orders
etc to set criteria. However, the real impact would be in the
negative ie, that without the "Q" Mark potential suppliers
could not be placed on the lists.
In addition to the objective criteria that I
have mentioned above, there would also be an element in the acquisition
of the "Q" Mark which required a financial contribution
by applicants. That contribution would have two elements. Firstly,
there would be an administrative cost for operating the Scheme.
This would be subject to proper audit controls etc.
There would then be an element representing
a contribution to the Sustainability Foundation— that contribution
being passed on by "Q" Mark to the Foundation. For the
purposes of this note, I am assuming that "Q" Mark and
the Foundation will be separate legal entities with independent
boards but possibly, to save costs, having a common administrative
overhead.
To ensure choice, subscribers to the "Q"
Mark would be entitled to nominate the Foundation as the recipient
of their contribution or alternatively two or three other non-profit
making independent organisations with similar objects and aims
to the Foundation. A member could nominate only one recipient
for his contribution.
The question that needs to be addressed is whether
the structure of the "Q" Mark Scheme and its adoption
by local authorities as one of its criteria for creating tender
lists could be the subject of a challenge under the rules applicable
to public procurement. Before I deal with this issue I believe
we need to recognise that as from April 2000, local authority
public procurement is to be judged against the criteria set out
under the Best Value regime. One of the elements of that regime
is the need for local authorities to have regard to the principle
of sustainable development. As I understand it, the "Q"
Mark is an attempt by the quarrying industry to make that concept
a fundamental plank of its operations and this must therefore
be a susbstantial contribution towards this element in the local
authorities duties in relation to Best Value.
The public procurement rules do have an over
arching influence and local authorities when assessing both the
criteria for creating lists of contractors and selecting successful
tenderers need to comply. There are underlying themes to the Public
Procurement Directives being transparency, fair and equal treatment
and the maintaining of competitiveness. These principles are recognised
in the Directives through stipulating the criteria to be used
by public authorities. These criteria fall into two main categories,
being economic and financial standing and technical capacity and
ability.
I have assumed for purposes of this note that
the most relevant regulations are those dealing with Public Supply
contracts. Regulation 16, for instance, requires a description
of the supplier's technical facilities and its research facilities
in relation to the goods supplied. It also deals with the supplier's
measures for ensuring quality in relation to the goods. Also Regulation
15 provides that contractors may be rejected where they lack economic
and financial standing. These terms are not defined but clearly
extend to the ability to remain in business to perform the contract
and meet their liabilities in operating the business.
It is clear from the Regulations that public
authorities may set minimum standards for both technical competence
and ability and economic and financial standing. Having regard
to the requirements as to sustainable development enshrined in
the Best Value regime, it would be our view that local authorities
could in meeting their obligations under that regime have regard
to the technical competence and ability of contractors and their
ability to meet the environmental standards enshrined in planning
and environmental consents and thus could set, as a minimum criteria,
membership of "Q" Mark for that purpose.
Provided that the membership of "Q"
Mark is open to all (including organisations based outside UK),
that criteria for membership is objective and not discretionary
and that local authorities are transparent in setting out their
preference for membership then we believe that local authorities
utilising the criteria in a proper manner would be within the
public procurement regulations. Therefore local authorities will
be able to structure local authority tender lists to make the
"Q" Mark a condition of participation. Furthermore they
will, be able to make it part of the criteria in assessing contractors
for contracts.
Gwyn E Williams
Edge Ellison, Solicitors to the Quarry Products Association
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