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Sub-contracting and Partnership Working for Bidding and Delivery Fiona Sheil Public Services Team National Council for Voluntary Organisations 27 th June.

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Presentation on theme: "Sub-contracting and Partnership Working for Bidding and Delivery Fiona Sheil Public Services Team National Council for Voluntary Organisations 27 th June."— Presentation transcript:

1 Sub-contracting and Partnership Working for Bidding and Delivery Fiona Sheil Public Services Team National Council for Voluntary Organisations 27 th June 2012, Norwich

2 Informal networks Informal Networks Joint Projects Merger

3 Today’s objectives Different consortia models When to pursue a subcontract Practical factors for partnership working Working with different sectors How to be a good partner

4 Groundrules  Participation  Responsibility and respect  Confidentiality  Timekeeping  Explain the jargon!  Mobile phones off  Copies of presentations provided  Plus the exercises  And evaluation  but let us know if you want more

5 The External Picture delivery/public-service-delivery

6 Estimated Change in Govt Spending on VCS 2010/11 – 2015/16 (£mill 2010/11 prices)

7 VCS Grants and Contract Income 2000/ /10

8 Income from statutory sources by sub-sector 2009/10

9 Government Expenditure on the VCS 2009/10

10 Future Forecast –Open public services –Efficiency via price and scale –Structural changes to funding –Shift in commissioning responsibilities delivery/commissioning-procurement/commissioning-procurement-step-stephttp://www.ncvo-vol.org.uk/advice-support/public-service- delivery/commissioning-procurement/commissioning-procurement-step-step –VCS decommissioning risks –VCS Strategic skills –VCS culture of collaboration

11 Consortia: so what’s the value then? Delivery quality: transformation Best use of resources eg technology Horizon scanning Narrative of needs; evidence and marketing Scale and referrals; market structure Exchequer and capacity development Risk appetite and risk arbitrage

12 Thinking it through

13 The key questions ‘Trustees of a charity have a duty to consider regularly whether the charity could be more effective at achieving its objects by collaborating or merging with other charities’ (Charity Commission) What outcome do you want? What do you know? What do you own?

14 Structures for consortia New legal body Lead organisation External non-delivering lead … and merger

15 Legal and Commercial Issues (I) Competition Act Procurement regulations –http://www.ncvo-vol.org.uk/commissioning/procurment/legal_frameworkhttp://www.ncvo-vol.org.uk/commissioning/procurment/legal_framework –http://www.legislation.gov.uk/uksi/2006/5/regulation/5/madehttp://www.legislation.gov.uk/uksi/2006/5/regulation/5/made –http://www.legislation.gov.uk/uksi/2006/5/regulation/28/madehttp://www.legislation.gov.uk/uksi/2006/5/regulation/28/made Identifying risk –http://www.sayervincent.co.uk/Asp/uploadedFiles/File/Publications/MadeSi mpleGuides/RiskManagementMadeSimple.pdfhttp://www.sayervincent.co.uk/Asp/uploadedFiles/File/Publications/MadeSi mpleGuides/RiskManagementMadeSimple.pdf Governance and legal structure –www.getlegal.org.ukwww.getlegal.org.uk Appropriate documentation –http://www.ncvo-vol.org.uk/advice-support/collaborative- working/information-and-tools/jointworkingagreementshttp://www.ncvo-vol.org.uk/advice-support/collaborative- working/information-and-tools/jointworkingagreements

16 Legal and Commercial Issues (II) Due diligence –http://www.ncvo-vol.org.uk/advice-support/collaborative-working/due- diligencehttp://www.ncvo-vol.org.uk/advice-support/collaborative-working/due- diligence –http://www.ncvo-vol.org.uk/products-services/publications/due-diligence- demystified-what-it-how-you-manage-ithttp://www.ncvo-vol.org.uk/products-services/publications/due-diligence- demystified-what-it-how-you-manage-it Intellectual Property Rights VAT and cost sharing –http://www.ncvo-vol.org.uk/advice-support/funding-finance/financial- management/financial-managementhttp://www.ncvo-vol.org.uk/advice-support/funding-finance/financial- management/financial-management

17 Lead contractor model

18 Appropriate use (I) Current Relationship Cultural understanding and confidence? Has this been tested? Their relations with others? Do you know what they want? Communications Relationship beyond the contract? Power balance? Contractual Issues Is there a contract? What terms are passed down? Including termination. PQQ on the prime? How sustainable is it? Variations? Break clauses? Recourse and dispute resolution

19 Appropriate use (II) Risk arbitrage What risks are they carrying? What scope do you have to absorb identified risks eg lack of referrals? Market Positioning What evidence of effectiveness, reach and USP do you have? Which tier do you want to be? How close is your work (IP) to that of the prime? How much IP information do you need to share, and how? Reputational risk? Capacity building and fiscal sheltering role? Bid candy?

20 Appropriate use (III) Supply Chain management and competition Commissioner involvement (black box)? Requirement for new systems? Data sharing and confidentiality? Is there competition within the supply chain? Volume guarantees? Payment mechanism? Fiscal sponsorship? How transparent is the supply chain? Gagging clauses – sharing best and worst practice? Merlin Standard / Compact management quality assurance?

21 Risks and disadvantages Clauses commonly passed downwards Distance from commissioner Creaming and parking Competition management / guaranteed volume and funding Incentives to market manage Imbalance of power

22 Development Process Initial contact PQQ response or marketing Volumes and costing developed by the prime Negotiation (as possible) on contract terms Capacity building (?) Due diligence Service / quality sharing… this is very risky However primes can bring you in to the contract later: are you ready for this?

23 Hub and spoke

24 Appropriate Use (I) Quality and Availability of Partners See ‘Joint Working Agreement’ See flipchart Quality of Commissioning Integrated / at scale? How sustainable is this decision: –Length of contract? –Trial or proven service? –Subject to political weather? How involved has the commissioner been in hub development? Timescale before tender PQQ hurdles? Any other choice at scale?

25 Appropriate Use (II) Culture and Capacity Building Open or closed membership? Sustains sector delivery activity Creates an independent, democratic mechanism Pooling resources, skills and user pathway Can be a first step to merger Skills up a range of members Isolates delivery and contract risk However may have to adapt to least able member

26 Risks and disadvantages (I) Access to initial finances –Complex and heavy legal costs –Start up time scale (9 months) Governance and conflict of interest Risk of not-winning PQQ barriers –Insurance –Track record –Income

27 Risks and disadvantages (II) Risk of being decommissioned Failure to deliver Quality management: political; bureaucratic Process heavy Often developed in a generalist manner IPR ownership People… no matter how good your process

28 Development Process Identify potential partners Board sign-off from each org Identify market; liaise with commissioners Create membership protocol and support structures Governance responsibilities and strategy Hub protocols (exchequer, tender alert, disputes, quality) Marketing and communications Tender readiness

29 First steps

30 Partner readiness test Shared outcomes Complementary areas Good governance Horizon scanning (contracts coming?) Innovation Business skills and capacity: to scale, technology, referral systems etc Ready to start Due Diligence Available capacity / finance committment Trust and reputation

31 Bidding in Partnership: preparing Lawyer, accountant, service specialist, manager, bid writer Project Plan Timeline Responsibilities Market research: Policy, Buying Intentions – Committee Reports, Performance and Contract Compliance Reports, Satisfaction and Need Surveys, Focus Groups, Competitors. vol.org.uk/sites/default/files/Creating_Trust_Base_Relationships_Case_Stu dy_TACT_February_2011.pdf vol.org.uk/sites/default/files/Creating_Trust_Base_Relationships_Case_Stu dy_TACT_February_2011.pdf

32 Writing a Tender Quality assurance: who will deliver? Heads of Terms Referrals pathways Service plan Risks matrix: –Identify risks –Analyse risks –Analyse risk capacity / appetite –Allocate risks –Risk management plan Instructions and orders

33 Today’s objectives Different consortia models When to pursue a subcontract Practical factors for partnership working Working with different sectors How to be a good partner

34 Thank You! support/collaborative-working commissioning; procurement; public service delivery; consortia and collaboration


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