PPN 03/23 & PPN Overview

What is a policy procurement notice?

In March 2023, the Cabinet Office released its latest iterative Policy Procurement Note (PPN). The PPN is a document that communicates the UK Government’s procurement policies, procedures, and requirements to potential suppliers. PPNs are typically released monthly outlining the specific policies that buyers should introduce for their procurement. In turn, once adopted suppliers must comply with PPN requirements to participate in the procurement process. Regulations include:

• Environmental sustainability
• Ethical sourcing
• Diversity and inclusion

So far in 2023, we’ve had 1 new PPN every month, and we find they offer a vital source of guidance to suppliers on how to prepare bids which are responsive to public authority requirements.

Background to the latest changes

Updating the standard selection questionnaire, the recent PPN 03/23 details the most extensive changes to specific UK procurement processes since the 2016 replacement of the pre-qualification questionnaire. PPN 03/23 also builds on the UK government's commitment to create a more sustainable, equitable, and socially responsible economy with social value forming a key driver for many of the changes.

What is a selection questionnaire?

Selection questionnaires are used during the procurement process to gather information about potential suppliers. The questions cover the supplier’s capabilities to deliver the scope of the contract opportunity, their experience delivering similar works/services, and the supplier’s financial stability. These questionnaires are also used to check that suppliers meet the necessary legal, regulatory, and technical requirements.

Commonly asked questions

The exact questions asked will differ between industries and opportunities. However, typical questions to expect that relate to the suppliers:

• Business structure and ownership
• Financial stability and performance
• Experience and track record in delivering similar contracts
• Technical capability and resources
• Health and safety records
• Environmental policies and performance
• Compliance with legal and regulatory requirements

The answers required will typically be largely yes or no answers, with opportunities for explanations, where required, underneath, though this may differ between opportunities.

The responses given will be marked by the awarding body and used to ensure that suppliers meet the minimum requirements for the procurement opportunity. Only the suppliers who pass the selection questionnaire stage will be invited to submit a formal bid for the opportunity.

Changes made in PPN 03/23

Reflecting feedback from buyers and suppliers, the following changes have been made to the supplier selection process.

Section 3 - deviation from set questions

Under PPN 03/23, contracting authorities are now allowed to deviate from the set supplier selection questionnaire questions, but must report any deviations to domestic-policyqueries@cabinetoffice.giv.uk. The only exceptions to this are if the deviations are:

• Additional questions that are specific to the procurement opportunity
• Changes to the wording to fit the style and format of the contracting authority’s e-procurement system, without changing the meaning of the question

Clarification on what makes a sub-contractor “relied upon”

Following previous uncertainty, PPN 03/23 states that sub-contractors are “relied upon” if they are required to meet the minimum standards of technical and professional ability and/or the economic and financial standing necessary to be considered for the procurement opportunity.

Requirements to complete Section 3

PPN 03/23 now states that all part of a consortium may be required to provide part 3 of the selection questionnaire on a single composite response. This is different as previously suppliers were required to submit multiple section 3s for each sub-contractor.

Breach of environmental legislation questions

The “breach of environmental legislation” questions have been merged with section 2.

New questions

The following questions have been added to the PPN 03/23.

Sub-contractors

If being used, suppliers will have to provide evidence on how they have previously successfully subcontracted the same or similar goods/services. It is worth noting that healthy supply chains questions may also apply to tenders of £5m plus.

Health and safety

A 500-word response outlining the supplier’s health and safety policies has been introduced. Suppliers will be expected to providing the following information within this response:

• Details of their accreditations, memberships, and certifications. These will differ between industries, but as a minimum suppliers should expect to include the minimum industry requirements and any outlined within the opportunity specification.
• The name, job position, and relevant experience/qualifications of the key personnel responsible for monitoring and delivering health and safety policies and training.
• The processes and policies used to measure and monitor risks and control hazards.
• Policy and procedure review processes and timeframes.

Data protection

Enhanced data protection questions have been introduced for contract opportunities where personal data is expected to be handled, although you can expect for this question to appear on most selection questionnaires. The minimum security measures that suppliers should adopt are industry-specific, but might include:

• External certifications, for example ISO27001 and/or Cyber Essentials Plus
• NCSC minimum standards for end-user devices
• Use of a CHECK or CREST-certified supplier to perform penetration testing
• Pre-employment checks for relevant personnel security
• Operation of an access control regime
• Security audits and protective monitoring
• Procurement and implementation of security patches

Carbon reduction

Now included as a question for central government contract opportunities over £5m, suppliers are expected to provide detail on the measures, aims and successes that they have in place to reduce their carbon output. Ways in which suppliers may evidence this include:

• Outlining their current carbon reduction measures by providing an overview of the steps they have already taken to reduce their carbon footprint. This could include changes to their operations, procurement policies, and investment into renewable energies.
• Highlight their targets by explaining their aims for carbon reduction. This may include aims to reduce emissions by a certain percentage within a specific timeframe, or achieving a specific carbon neutrality goal. This is particularly effective when aligned with the carbon reduction goals of the contracting authority (buyer).
• Describe their approach, including their existing policies, relevant personnel, and any successes achieved.
• Provide evidence of successful measures, including case studies and data to back carbon reduction claims up.

Responses to this question must include, at a minimum:

• The supplier’s most recently published Carbon Reduction Plan
• Self-certification of a commitment to achieve Net Zero by 2050
• Supplier’s own Net Zero target date and calculation of Scope 1,2 and 3 emissions

NHS requirements exceed this including Evergreen Assessments for suppliers.

Prompt payment

Also an addition for central government contracts over £5m, suppliers must provide the following information to updated payment questions:

• Confirmation of their intent to use a supply chain, including their systems to ensure prompt payment
• Detail of the procedures used to resolve issues of late or disputed payment/invoices

Modern slavery

Taking a risk-based approach towards procurement, PPN 03/23 identifies 4 key supply chain areas for scrutiny by contracting authorities. These are aimed to increase contracting authority responsibility for ethical procurement, and to provide guidance to suppliers on the standards/good practice expected.

The 4 key areas identified by PPN 03/23 are consistent with previous requirements whilst introducing guidance on the risks identified with new market engagement. In line with the UK Government’s dedication to procuring 30% of its supplies/services from Small, Medium Enterprises (SMEs), the identified areas offer a robust approach towards “high-risk” procurements without being overly demanding and excluding SMEs.

The areas highlighted by this PPN are:

• The identification and management of risks in new procurements
• The assessment of existing contracts for risks
• The actions taken where victims of modern slavery are identified
• The training available/undertaken to raise awareness of modern slavery in the supply chain

Formatting

All construction/works contracts are now expected to use the longer PAS91 questionnaire format rather than the standard selection questionnaire template.

What these changes mean for your business

Most PPN 03/23 changes to the selection questionnaire are to section 3 and overall do not present too much of a change to suppliers. However, it is important for suppliers to recognise that these changes may require additional information, such as evidence of accreditations and policies that they previously may not have had to supply. To prevent non-compliance and ensure that your responses show your business in the best light, make sure that you read through the selection questionnaire and prepare your documents ahead of time.

How Thornton and Lowe can help

Increase your chances of being shortlisted for contract award by speaking with our expert bid writing team. We can write your responses for you, guide you in the right direction, or simply review and recommend changes before you submit.

Remove the stress and monotony that completing selection questionnaires can bring by engaging the help of our procurement specialists. Get in touch today to see how we can save you time and provide you with guidance to get the most out of your selection questionnaire responses.