Solvency, the ESPD and joint ventures: the requirements that decide whether you can bid

What solvency means in a tender

Solvency is the economic, financial, technical or professional capacity a company has to evidence before it can take part in certain contracts. It is a condition of participation, not an award criterion: it earns no points, but without it no offer counts. What exactly is required depends on the tender and is set out in the administrative specifications.

Economic and financial solvency

It answers the question of whether the company is big enough and stable enough to deliver the contract. How it is evidenced is set by each specification; as a rule it rests on figures from the company's own activity or on guarantees from third parties. Before bidding, check that the form of evidence the tender asks for is one your company can actually produce.

Technical or professional solvency

It answers whether the company knows how to do what is being bought. It is usually evidenced with experience of similar work, with the team and resources at your disposal, with certifications or with classifications. This is where newcomers most often come unstuck: experience counts when it can be evidenced, that is, when it can be shown with documents the specifications accept.

What the ESPD is and what it is for

The European Single Procurement Document (the DEUC in Spain) is a declaration used in many procedures to evidence certain conditions of participation at the outset, without supplying all the supporting documentation from day one. In practice the company declares that it meets the requirements, and the documents that prove it are supplied later, usually once the bid has been proposed for award.

That makes bidding simpler, but it does not change the substance: whatever you declare, you have to be able to evidence. A declaration that cannot later be backed up with documents is a risk of exclusion, and it tends to come to light at the worst possible moment, with the award within reach. Exactly how the ESPD is used depends on each procedure.

When a joint venture makes sense

A temporary joint venture (UTE) lets several companies bid together for a tender when they decide to pool their capabilities to deliver the contract. It is the usual answer when the contract is bigger than any one of the companies on its own, or when one has the technical solvency and another the economic. The requirements and responsibilities have to be reviewed for each tender.

A joint venture is not the only route. In some cases the specifications allow part of the work to be subcontracted, or allow you to rely on another company's resources, and each tender sets its own terms. What does not change is that this has to be settled before the offer is prepared, not afterwards, because the administrative documentation and the commitments in the proposal depend on who is bidding.

What if we are missing a certificate or a requirement

It depends on three things: whether it is a mandatory requirement or a scoring criterion, whether it can be obtained before the date it is needed, and what terms the tender sets. A certificate that can be obtained in time is a formality; one that cannot is a reason to drop the tender rather than lose weeks of the team on it. Catching it on the first day rather than the last is the difference between the two.

How to check before you spend weeks on the tender

1. Find the solvency requirements in the PCAP and note exactly how it asks for them to be evidenced.
2. Check, document by document, that your company can produce that evidence in that form.
3. Separate what is mandatory from what scores: the first decides whether you bid; the second, how much effort it deserves.
4. If you cannot get there on your own, decide from the outset whether a joint venture or subcontracting is possible in that tender.
5. List what is missing and how long it would take to obtain. If it will not arrive before the deadline, drop the tender in good time.

That is precisely the fit analysis Carabela runs on every opportunity before anything is prepared: whether you can bid, whether you meet the mandatory requirements and the solvency conditions, what documentation is missing, what risks the tender carries and how much effort it would take. How it does this is set out in tender analysis.