The Defence and Security Public Contracts Regulations 2011

PART 6 MATTERS RELATING TO A CONTRACT

Obligations relating to taxes, environmental protection, employment protection and working conditions

35.—(1) A contracting authority may include in the contract documents relating to a works contract or to a services contract information as to where a contractor or services provider may obtain information about the obligations relating to taxes, environmental protection, employment protection and working conditions which will apply to—

(a) the work or works to be carried out under a works contract; or

(b) the services to be provided under a services contract.

(2) A contracting authority which provides the information referred to in paragraph (1) shall request contractors or services providers to indicate that they have taken account of the obligations relating to those employment protection provisions and those working conditions in preparing their tender or in negotiating the contract.

Conditions for performance of contracts

36.—(1) A contracting authority may impose special conditions relating to the performance of a contract, provided that the special conditions are compatible with EU law and are indicated in the contract documents.

(2) The special conditions referred to in paragraph (1) may, in particular, concern sub-contracting or include the requirements of the contracting authority relating to the security of classified information and the security of supply in accordance with regulations 37, 38 and 39, or take environmental or social considerations into account.

Sub-contracting

37.—(1) Subject to paragraph (3), the successful economic operator is free to select its sub-contractors for all sub-contracts and, in particular, must not be required to discriminate against potential sub-contractors on grounds of nationality.

(2) The contracting authority may require the economic operator—

(a) to indicate in its tender—

(i) any part of the contract it intends to sub-contract;

(ii) the details of any proposed sub-contractor; and

(iii) the subject matter of the proposed sub-contracts; and

(b) to indicate any change occurring with respect to proposed sub-contracting before or during the execution of the contract.

(3) The contracting authority may oblige the successful economic operator to apply the provisions set out in Part 7 to all or certain sub-contracts which the successful economic operator intends to award to third parties.

(4) The contracting authority may reject the sub-contractors selected by—

(a) the economic operator at the stage of the award procedure of the main contract, or

(b) the successful economic operator during the performance of the main contract,

but such a rejection may only be based on criteria applied for the selection of the economic operators for the main contract.

(5) Where a contracting authority rejects a sub-contractor in accordance with paragraph (4), it must produce a written justification to the economic operator or the successful economic operator setting out why it considers that the sub-contractor does not meet the criteria but may withhold any information where any of the grounds referred to in regulation 33(11)(a) to (d) would apply to the disclosure of such information.

(6) Where the contracting authority requires an economic operator to fulfil requirements in accordance with paragraph (2) or (3) or may reject a sub-contractor in accordance with paragraph (4), it must set out the requirements or indicate the possibility of rejection in the contract notice.

(7) For the purposes of paragraph (3), the following are not to be considered to be third parties—

(a) related undertakings;

(b) groups of undertakings which have formed to obtain the contract, and undertakings related to them.

(8) For the purposes of paragraph (7), “related undertaking” means any undertaking over which the successful economic operator can exert a dominant influence, whether directly or indirectly, or any undertaking which can exert a dominant influence on the successful economic operator or which, as the successful economic operator, is subject to the dominant influence of another undertaking as a result of ownership, financial participation or the rules which govern it; and a dominant influence is to be presumed when, directly or indirectly in relation to another undertaking, the dominant undertaking—

(a) holds a majority of the other undertaking’s subscribed capital;

(b) controls a majority of the votes attached to the shares issued by the other undertaking; or

(c) is entitled to appoint more than half of the other undertaking’s administrative, management or supervisory bodies.

(9) The economic operator must include a list of undertakings to which paragraph (7) applies in the tender and must update the list following any change of relationship between the undertakings.

Security of information

38.—(1) Where a contract involves, requires or contains classified information, the contracting authority must specify, in the contract documents, the measures and requirements necessary to ensure the security of that information at the requisite level.

(2) Where paragraph (1) applies, the contracting authority may require that the tender contain particulars including the following—

(a) a commitment from the economic operator and the sub-contractors already identified to safeguard appropriately the confidentiality of all classified information in their possession or coming to their notice throughout the duration of the contract and after the termination or conclusion of the contract;

(b) a commitment from the economic operator to obtain the commitment referred to in sub-paragraph (a) from other sub-contractors to which it will sub-contract during the execution of the contract;

(c) sufficient information on sub-contractors already identified to enable the contracting authority to determine that each of them possess the capabilities required to safeguard appropriately the confidentiality of the classified information to which they have access or which they are required to produce when carrying out their sub-contracting activities;

(d) a commitment from the economic operator to provide the information referred to in sub-paragraph (c) on any new sub-contractor before awarding a sub-contract.

(3) The measures and requirements referred to in paragraphs (1) and (2) must comply with the security clearance provisions of the United Kingdom.

Security of supply

39.—(1) The contracting authority must specify, in the contract documents, its security of supply requirements.

(2) Where a contracting authority specifies its requirements in accordance with paragraph (1), the contracting authority may require that the tender contain particulars including the following—

(a) certification or documentation demonstrating to the satisfaction of the contracting authority that the economic operator will be able to honour its obligations regarding the export, transfer and transit of goods associated with the contract, including any supporting documentation received from the member State concerned;

(b) an indication of any restriction on the contracting authority regarding disclosure, transfer or use of the products and services or any result of those products and services, which would result from export control or security arrangements;

(c) certification or documentation demonstrating that the organisation and location of the economic operator’s supply chain will allow it to comply with the requirements of the contracting authority concerning security of supply set out in the contract documents, and a commitment to ensure that possible changes in its supply chain during the execution of the contract will not adversely affect compliance with these requirements;

(d) a commitment from the economic operator to establish or maintain the capacity required to meet additional needs required by the contracting authority as a result of a crisis, according to terms and conditions to be agreed;

(e) any supporting documentation received from the economic operator’s national authorities regarding the fulfilment of additional needs required by the contracting authority as a result of a crisis;

(f) a commitment from the economic operator to carry out the maintenance, modernisation or adaptation of the goods covered by the contract;

(g) a commitment from the economic operator to inform the contracting authority in due time of any change in its organisation, supply chain or industrial strategy that may affect its obligations to the contracting authority;

(h) a commitment from the economic operator to provide the contracting authority, according to terms and conditions to be agreed, with all specific means necessary for the production of spare parts, components, assemblies and special testing equipment, including technical drawings, licences and instructions for use, in the event that it is no longer able to provide these goods.

(3) An economic operator may not be required to obtain a commitment from a member State that would prejudice that member State’s freedom to apply, in accordance with international or EU law, its national export, transfer or transit licensing criteria in the circumstances prevailing at the time of such a licensing decision.