1. Bob Moodie NJM European, Economic & Management Consultants Limited
Selling to the Public Sector – helping Leicestershire SMEs unlock their potential
Bob Moodie NJM European, Economic & Management Consultants Limited

2. Composition of business stock
The Challenge
Composition of business stock
No. of Employees
1-9
10-49
50-249
250+
% of business stock
89.9
8.4
1.4
0.3
99.7%
SME
LSE
According to the latest figures only 16% of the total value of public contracts go to SMEs.
75% of SMEs rarely or never bid for public sector work

3. Where to find information/opportunities Preferred suppliers
We’re too young (we lack trading history /track record)
Lack of previous public sector experience
Price
Lack of bid skills
We’re too small (contract is too big as a proportion of our turnover)
The timescale is too tight
Difficult to access purchasers
Process is time-consuming, costly and complex
PQQ qualifiers – policies & procedures
Location and point of service
Difficult to find consortia to bid with

4. Responding to the Challenge: Be Strategic
The Key Themes in Today’s Workshop
The Procurement Context
Identifying opportunities and raising business profile
When to bid and when not to bid
Preparing PQQs and tenders
In the present competitive environment it is vital to understand that only a very professional approach at all levels of the process will suffice if you want to be successful

5. The Procurement Context: Regulatory Framework
EU Procurement Directives
European
Local
National
Government Strategy
Statutory Requirements
Council Procedures
Local Agreements

6. EU Procurement Thresholds
Supplies
Services
Works
Central Government plus some ‘Quangos’ (see Schedule 1 List)
€125,000
(£101,323)
€4,845,000
(£3,927,260)
Other Public Sector e.g. Local Authorities, Universities, FE, etc
€193,000
(£156,442)
Thresholds applicable from 1st of January 2010 and are NET of VAT
Principles: Open competition, non-discrimination, equal treatment and transparency.
Note: Exchange Rates
The thresholds would be more meaningful as £. Also need to state that relate to total contract values, including any extension options

7. A New Environment Political Economic Social Technological
The Comprehensive Spending Review (2010)
NHS reorganisation
Glover Report - SMEs and Public Procurement (2008): Transparency Simplicity, Strategic & Measurement
Equality of Access (SME & Third Sector)
Coalition Government’s aspiration to award 25% of central contracts to SMEs
Price & Value for Money
Financial Environment
Contract Bundling (Economy of Supply)
Rationalisation & Framework Agreements
Ability to deliver economies and efficiency savings
Social
Technological
Corporate Social Responsibility
Sustainability
Innovation & non contractual outcomes
Portals
E-tendering
E-auctions
Real time reporting
See comments on Melton Workshop slides

8. Context & Opportunity
Public procurement, estimated at over £175 billion per annum (13% of UK GDP)
Leicestershire County Council spends over £300 million each year on goods, works and services. Over the next three to four years, to , the Council will need to make savings of around £70m - that’s 25% of its budget.
Leicester City Council estimated procurement budget for the Authority is £260 million p.a. ( ).
NHS Leicestershire & Rutland Procurement Partnership influences spend of approximately £250 million on goods and services each year.
LCC’s latest savings figure is £82m between and , incl. £22m from commissioning and procurement

9. Local Procedures Public Sector Organisation
Threshold (goods & supplies)
Procurement Process & Source
Leicestershire County Council
<£1k
£1k – £20k
>£20k - £100k
>£100k - EU threshold (£156,442)
1 Oral / Written Quote
3 Written Quotes or
Request for Quotation
Formal Tender Process Or
Leicester City Council
< £10k
£10k - £49k
£50K - EU threshold (£156,442)
Up to £250k (works only)
Oral / Written Quotes (officer discretion)
3 Written Quotes or Formal Tender Process (officer discretion) or
University of Leicester
£5k - £25k
>£25k – EU threshold
(£156,442)
3 Oral / Written Quotes
Formal Tender via departments or
See comments on Melton Workshop slides

10. Procurement Procedure
Characteristics
When the procedure is adopted
Open
All qualified applicants must be given the opportunity to bid
For lower risk procurement where supplier capability is less important or where the focus is on price
Restricted
Two stage process with facility to shortlist (PQQ + Tender)
Where capability of supplier is key determining factor in the delivery of the contract, market response likely to be huge to allow short-listing
Negotiated
Two stage process with facility to negotiate at second stage
Specification is not clear or some creative, artistic or expert input is required.
Competitive Dialogue
Two stage process with facility to enter into a dialogue with potential suppliers to consider potential solutions and refine specification before invitation to tender
Complex procurement where suppliers expertise has significant impact on the development of the specification
Framework Agreement
Call-Off or Mini competition amongst preferred suppliers
(selected from open/restricted procedure)
Capability and Capacity is important and is generally a recurring/constant requirement (max 4 years; including extension options)
Open is the most common ----IT’S MY UNDERSTANDING THAT RESTRICTED IS MOST COMMON

11. Procurement Process Overview
Contract Notice
EOI
PQQ
Commission
Tender
Review
Manage
Award
Evaluate

12. Contract Notices KEY TENDER WEBSITES Name: Source: Used by:
Eastern Shires Purchasing Organisation
LAs, NHS in Leicestershire, OJEU tenders
Source Leicestershire
LAs, NHS in Leicestershire
Leicestershire County & Rutland NHS
NHS
In-Tend
Universities, Colleges, Schools, LAs (some in Leicestershire and nationally)
Blue Light
Police, Fire & Rescue Services (including Leicestershire Constabulary & across UK)
Supply to Government
Lower value government tenders (*website will be replaced by ‘Contracts Finder’ March 2011)
OJEU
Any public sector contract above EU Threshold
sourceleicestershire should be top – It’s more likely to advertise the lower value contracts that SMEs are interested in, than the ESPO website
Voluntary Action LeicesterShire also advertises contract opportunities for voluntary sector organisations

13. Identifying Opportunities & Raising Your Profile
A Strategic Approach
Identifying Opportunities & Raising Your Profile

14. Be Systematic & Get Organised
What is your target market?
In your target market who are the key buyers - Personnel at Department level and Procurement Officers (important for low value contracts that are not formally advertised)?
Engage procurement personnel - make sure they know you exist, seed ideas
Find out about approved (accredited) supplier lists
Register and publish on tender e-portals
Network (buyers/commissioners, meet the buyer events)
LCC is trying to move away from standing/approved lists, towards framework agreements. Frameworks reflect better value for money, established following an assessment of price vs. quality

15. Be Systematic & Get Organised
Set up internal processes and individual(s) to monitor tender portals, alerts, sources and review feedback
Search for potential business partners / collaborators / subcontractors
Develop / improve your key policies e.g. Make them relevant and articulating business benefit
Accreditation (e.g. CHAS, ISO, IiP etc)
Bid writing is a skill – invest the time in developing the capability

16. A Strategic Approach
To bid or not to bid?

17. Strategic Decision Making
Is the tender a good fit in relation to your company’s activities?
Can you meet the eligibility criteria (technical qualifications, policy compliance e.g. Quality Assurance, Insurance) ?
Do you have a good track record in relation to the opportunity?
Do you have the trading history (e.g. 2 years Accounts)?
Do you have the capability and capacity to deliver the contract if successful?
Can you make sense of the budget and can you deliver the contract on time?
Two years accounts aren’t critical. As mentioned in my notes on the Melton Workshop slides, “OGC guidance states that financial vetting should be based on appropriate information and the use of sound business judgement, rather than just the mechanistic application of financial formulae”
The Council may use the following information to satisfy itself that the firm is financially stable:
Parent company accounts (if applicable)
Bankers statements and references
Accountants’ references
Management accounts
Financial projections, including cash flow forecasts
Details of previous contracts, including contract values
Capital availability

18. Strategic Decision Making
What are the risks?
Who are your competitors?
What percentage of your turnover does the contract represent?
Do you need a partner(s) or will you use subcontractors?
What is the percentage chance of success?
Do you have the time and resources to devote to preparing a good bid?

19. Strategic Decision Making
Solo or Collaborative Bidding?
Form a consortium if:
You don’t have the capability or capacity
You can’t meet the 20% rule
Options:
Consortium
Joint Bidding
Lead Contractor & Subcontractor
Legal basics
Memorandum of understanding (MoU) / Partnership agreement / (Non Disclosure agreement (NDA); Agreement not to compete in other tender)
Service level agreement (SLA)/contract
Consortium must be properly led, constructed, managed
Consortium jointly and severally liable

20. Consortia Benefits: Risks:
Increase capacity and scope to bid e.g. Overcome PQQ impediments
Partner selection and getting Agreement
Shared trade history (combined capability and capacity)
Trust relationship (how well do you know your partner – can you be confident they can and will deliver)
Business Development: Access new clients and markets
Complex decision-making, loss of autonomy, compromises and concessions
Spread risk
Sharing sensitive information
Mutual learning and innovative approaches
Logistics (Co-ordinating bid)
Delivered additional added value (the whole is greater than the sum of the parts)
Logistics (Contract delivery)
Improve chance of success
Voluntary Action LeicesterShire provide training to voluntary sector organisations on establishing consortia

21. A Strategic Approach
Preparing the Bid

22. Preparing the PQQ/Tender
Make sure you download/print off ALL tender documents and read them carefully (multiple times)
Note the tender instructions, e.g. word limits, submission format, deadlines and evaluation criteria

23. PQQ: Example Scoring Framework
Section
Score Weighting 1
Organisation Details
N/A 2
Financial Information
N/A or Risk Based Assessment
Pass/Fail 3
Insurance 4
Business Activities
15% 5
Business Practices
30% (Total)
Health & Safety
5-10%
Quality Assurance
Environmental Management
Equality 6
Requirement - specific
40% 7
Experience & References 8
Professional & Business Standing
Depends on nature of contract, e.g. an IT contract may require more on Business Continuity arrangements, whereas a Social Care contract may require more on Equalities

24. Tenders: Example ‘Scored’ Criteria
Response Type
Reason indicated for Score
Non compliant response
No relevant information / solution provided in response to contract requirements. 1
Unacceptable response
Partially compliant response but with serious deficiencies in solution offered, indicating serious difficulties / inability to deliver contract requirements. 2
Unsatisfactory response
Partially compliant response with shortfalls in solution offered, indicating not all contract requirements could be met and thus difficulty in delivery of the contract. 3
Acceptable response
Compliant response, indicating basic contract requirements are met but not exceeded. Contract could be delivered. 4
Good response
Compliant response, clearly indicating entire delivery can be met and solution offers some limited benefits beyond stated requirements. 5
Excellent response
Compliant response, bidder illustrated comprehensive understanding of contract reqs. Proposed solution provides significant additional benefits beyond stated reqs.

25. Preparing the PQQ/Tender
Get your team together, appoint a bid manager and conduct detailed review and interpretation of tender requirements.
Determine whether you require clarification of any aspect of the tender and ask the question(s) allowing enough time for a response.
Check regularly to see if any questions/answers have been submitted by competitors. Be aware that any question you ask will be notified to other suppliers)
Prepare work plan & allocation of roles/tasks/milestones with reference to tender & submission deadline.
NB: Build in time to review, refine and style bid

26. Preparing the PQQ/Tender
What is the Buyer looking for?
Demonstrate a clear understanding of the brief (i.e. the challenges are understood and addressed)
Design a clearly structured tender response aligned against each tender requirement and criteria (e.g. core, gateway and specific). Ensure compliance!
Methodology: clearly show who does what, why, when, how and benefits from buyer’s perspective).
Identify and demonstrate clearly your capability and the innovation of your offer (USP) - can your offer exceed the contract requirements and provide additional benefits, outcomes?

27. Preparing the PQQ/Tender
Properly define appropriate resources / organisation (CVs of identified team members / subcontractors / partners & management structure).
Project Plan (Schedule of Deliverables, Milestones and Resource and illustrate with diagram where possible i.e. Gantt Chart)
Explain Contract management and communication (i.e. how you interface with the client to monitor project)
Risk Assessment (illustrate how you provide buyer with a low risk solution)
Articulate pricing and value for money
Compliance (Policies – NB You may be asked to explain your policy commitments)

28. Preparing the PQQ/Tender
Standing Out from the Crowd
Have you articulated ‘Why choose us?’
Have you fully defined the key features, quality and benefits of your approach?
Have you used and made the most of recent and relevant case studies to illustrate your track record?
Have you presented advantages over your competitors?
Have you gone the extra mile in manifesting your understanding of the brief and the design of your solution?

29. Costing the Proposal Personnel & Tasks
Charging Rate(s) (Daily/Hourly) & Time
Fixed Cost / Variable Cost
Expenses & Disbursements
Contingency
VAT
Innovative Cost Proposals
Discounted Cost e.g. 5% early payment, economies of scale and efficiency savings linked to contract term and/or number of contracts (Lots) awarded
Buyer comfort: Offer 10% Contract Price Withheld until completion

30. Preparing the PQQ/Tender
Do not attempt to find an “inside track” (canvassing)
Respond by the correct date + time (electronic, electronic + post, post?) avoid last minute submissions
Ensure the submission is complete AND signed including copies of requested documentation, e.g. insurance certificates, policies, audited accounts etc
Use tender envelope/label if provided and check if there is a tender reference
Look carefully at the evaluation criteria, scores and “weighting”. This should influence time and effort in preparation of answers

31. Preparing the Tender: Bid Writing
Language & Style:
Write in plain English
Avoid jargon and unexplained abbreviations
Use ‘active’ and not ‘passive‘ verbs, refer to ‘we’ and ‘you’
Short sentences and paragraphs; use introductory headers
Punctuation and spelling really matter
Aim for clarity, brevity, readability and persuasion !

32. ♪♫♪ Accentuate the Positive ♪♫♪
What QA does your company operate? If no accreditation is held please explain why not and what alternative steps you take to ensure quality at work?
Bad Answer:
“We operate our own quality system. We have determined that formal accreditation is inappropriate to our company’s needs. Complaints are the responsibility of the Managing Director.”
Good Answer:
“We regard quality as a vitally important part of our business activity and we operate a comprehensive and strict internal quality assurance process covering all aspects of our business activity (details can be found in Appendix 2). We are committed to a process of continuous improvement and we are in the process of applying for ISO 9001 (we expect to be assessed in May of this year)”

33. Avoiding a Poor Score Common reasons for a poor score:
Failure to follow the instructions.
Writing by committee, no narrative flow and lack of control/ownership
Incomplete or missing answers/sections.
Supporting documentation incomplete
Repeating answers or referring to ‘see above’ (questions are rarely repeated)
Over emphasising what you sell, rather than what they are looking to buy
Recycling old tenders ‘Cutting & pasting’!
Generic PQQ/Tender response
Providing response on general capability instead as opposed to specific contract requirements.

34. Buyer Preferences LIKE Don’t like Concise and precise language
Wordy tenders, Inconsistencies and errors, poor use of grammar
Clear structure (esp. Methodology)
Poor methodology (failure to define who does what, where, when, why and how)
Challenges have been understood and properly addressed
Deviation from defined requirements, lack of understanding of client requirements and failure to answer questions
Relevant background information
Lack of detail/explanation or ‘data dump’
Properly defined & appropriate resources
Unclear who will be involved in delivery
Systems & procedures
Exaggerated and unsubstantiated claims
Innovation – or the opposite (tradition)
Poor evidence of reliability
Risk assessment (mitigations)
No risk assessment
Case studies & references
Irrelevant case studies
Answers that directly answer the question – using the same language

35. Be... Compliant Tender Format & Requirements Policies, Insurances, etc
Persuasive
USP
Added Value and/or Innovation
Competitive
Quality
Price

36. Any questions?

37. Further one to one support: