Respond to the contract in a grouping (co-contracting) or sub-contracting

Verified 15 December 2023 - Directorate for Legal and Administrative Information (Prime Minister)

To respond to a public procurement, SMEs can organize themselves in temporary grouping of companies (GME) and access larger markets. They may also be subcontractors where the holder of the public contract entrusts them with part of the performance of a public contract.

GME or co-contracting

A temporary grouping of companies (GME) or co-contracting is a temporary agreement between companies to develop a joint offer in response to a public procurement contract. It allows companies to organize themselves to respond to a deal that they cannot compete for alone.

A GME may be used when a company is in one of the following situations:

  • Market size too large
  • Execution times impossible to meet alone
  • Need for additional skills or capacity
  • Need for specific labels or certifications

The GME does not have legal personality. Each Member company shall have the status of co-contractor. Unlike subcontracting, all members of the group have a contractual relationship with the buyer and are liable to him.

This grouping of operators is temporary : it exists only for a defined duration.

Each grouping must necessarily have a representative qualified as representative who acts as the interlocutor of the public purchaser throughout the performance phase of the contract.

FYI  

The public purchaser may require that certain essential market tasks be carried out by one of the members of the grouping provided that he has indicated this in the consultation documents.

Grouping can take one of the following forms:

  • Solidarity group : each member is financially responsible for the whole contract and its performance, even if only part of it is performed.
  • Joint Grouping : each member is responsible for the benefits for which he is responsible.
  • Joint grouping with joint and several representative : each co-contractor is engaged to the extent of his services and that the representative of the grouping is financially responsible for the other members.

In practice, many groups are joint partners with a joint and several representative.

In the consultation documentsHowever, some public purchasers require the grouping to become joint and several or to be a joint and several agent.

FYI  

Grouping members are advised to sign a grouping agreement (i.e. a contract) that sets out the rules for the functioning of the grouping and the responsibilities of each member.

The grouping shall be formed at the applications in one of the following ways:

  • Either using Form DC1 (identification of contractors and authorized representative) and a Form DC2 for each member

Form DC1: Model Application Letter

Form DC2: Applicant Declaration Template

  • Using the ESPD: each member shall provide an ESPD and indicate its role in the grouping and appoint the authorized representative

European Single Market Document (ESPD)

FYI  

Each co-contractor and the authorized representative must be identified.

Subcontracting

Subcontracting implies the existence of two separate contracts :

  • one public procurement contract concluded between the public purchaser and the company holding the contract
  • and one subcontract concluded between the contract holder and the subcontractor.

Subcontracting total is forbidden. On the other hand, the contract holder is authorized to subcontract performance of a party of the public contract.

Subcontracting is possible in a work and in a services. The subcontractor may be a suitable company (EA), an establishment and labor support service (ESAT), an economic integration facility (SIAE), or a social and solidarity economy company (EESS).

FYI  

A specific platform “ The Inclusion Market lists inclusive suppliers that can implement the social clause. In a public contract, this clause requires the successful candidate to hire persons in difficulty (long-term unemployed, persons with disabilities, etc.) or to use staff made available by economic integration structures (EIS).

By contrast, a public supply contract may not be subcontracted. However, subcontracting is possible for the performance of the services or siting or installation provided for in the case of a supply contract.

Please note

The public purchaser may require certain ‘essential tasks’ of the contract to be performed directly by the contract holder. The concept of essential tasks must be specified by the public purchaser in the special administrative specifications (CCAP).

The candidate company (or tenderer) wishing to subcontract must complete the 2 following conditions :

· Complete a subcontracting declaration (Form DC4)

· Obtain subcontractor acceptance by the public purchaser

Subcontracting Declaration (Form DC4)

This is the room in which the tenderer or the holder submits a subcontractor. The tenderer for a contract must declare the subcontract either at the time when the tender is submitted or during the performance of the contract.

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At the time of submission of the tender

The company applying for a public contract shall complete a subcontracting declaration form DC4 which presents the subcontractor. It also makes it possible to set up the system of direct payment ”

Public procurement - Candidate's statements

The subcontracting declaration shall include the information following:

  • Nature of subcontracted services
  • Name, name or business name and address of proposed subcontractor
  • Maximum amount of sums to be paid to subcontractor
  • Payment conditions provided for in the draft subcontract and, where appropriate, the arrangements for price changes
  • The professional, technical and financial capabilities of the subcontractor on which the applicant relies
  • Declaration by the subcontractor that he is not subject to a ban on access to public contracts

The declaration of subcontracting shall be signed by the company applying for the contract, the subcontractor and the public purchaser.

FYI  

Each subcontractor submitted must have a separate DC4.

In the course of performance of the contract

Where the subcontractor is presented in the course of performance of the contract, the holder of the contract shall give the buyer the special act of subcontracting, i.e. the declaration of subcontracting (Form DC4).

Public procurement - Candidate's statements

The special act of subcontracting shall contain the following information:

  • Nature of subcontracted services;
  • Name, name or trade name and address of proposed subcontractor;
  • Maximum amount of sums to be paid to the subcontractor;
  • Payment conditions provided for in the draft subcontract and, where appropriate, the arrangements for price changes
  • The professional, technical and financial capabilities of the subcontractor on which the applicant relies

FYI  

Each subcontractor submitted must have a separate DC4.

Subcontractor acceptance

Acceptance of the subcontractor by the public purchaser shall take place either at the time of submission of the tender or during the course of the contract.

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At the time of submission of the tender

If the subcontractor is declared at the time of submission of the tender, the notification of the contract shall entail acceptance of the subcontractor and its payment terms.

On receipt of the document, the contract holder (i.e. the applicant company) shall forward to the subcontractor the particulars relating to that part of the contract.

In the course of performance of the contract

Where the subcontracting declaration is made after notification of the procurement contract, it is the signature of the form DC4 that produces the acceptance of the subcontractor and approval of its payment terms.

The public purchaser silence during 21 days from the receipt of the documents shall be deemed to be acceptance by the subcontractor and approval of the payment terms.

The right to direct payment enables the public purchaser to pay the subcontractor directly for the services he has performed.

Only the subcontractor accepted by the buyer (referred to as a subcontractor of 1er rank) and whose payment terms have been approved shall benefit from the right to direct payment .

This right applies to any benefit equal to or greater than €600 TTC: titleContent.

In the case of a contract awarded by the defense services, direct payment shall be possible as soon as the amount of the subcontract is equal to or greater than 10% the total amount of the contract.

The subcontractor benefiting from the direct payment shall lodge its payment request on Chorus-Pro.

It appears in the “invoice to be validated” area of the contract holder. The latter may either approve or reject the payment request. He has a 15-day period to accept or refuse direct payment from its subcontractor.

In the case of validation, the request shall be forwarded to the public purchaser.

Chorus Pro Portal

FYI  

To know the validation circuit of invoices of its subcontractors on Chorus Pro, the company can consult the dedicated article on the Chorus Pro community website.

Where the holder of the contract fulfills the conditions for advance, the subcontractor also right to the payment of an advance if he is entitled to direct payment.

As for the holder, the subcontractor’s advance is obligatory where both of the following conditions are met:

  • The total amount of the public contract, and not just the amount of services subtracted, is greater than €50,000 HT.
  • The period for performance of the public contract shall be longer than 2 months.

The subcontractor may receive an advance as soon as the public contract is notified or the declaration of subcontracting in the course of performance of the contract is signed.

The amount of the advance shall be calculated on the basis of the services entrusted to it in the contract.

The refusal of the holder to benefit from the advance shall not prevent the subcontractor from obtaining payment thereof.

FYI  

In the subcontracting declaration form (Form DC4), the subcontractor receiving the direct payment ticks the ‘yes’ box if he accepts the payment of the advance.