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

2. What we will look at: 1. The Context & Opportunities 2. Understanding Procurement Processes 3. Finding tender opportunities 4. Developing a strategic approach 5. Becoming Bid Ready

3. Context: Policies Coalition Governments aspiration to award 25% of central contracts to SMEs Leicestershire County Councils Sustainable Commissioning & Procurement Strategy (2009-13) - % expenditure with SMEs - No. of local SMEs submitting Pre-Qualification Questionnaires to ESPO when expressing an interest in Council requirements The Comprehensive Spending Review (2010) SME Concordat Equality of Access (SME & Third Sector) EU Procurement Directives (OJEU) UK Government strategy and statutory requirements Local authority procedures, statutory requirements

4. Context: Economics Extensive public sector budget cuts and spending pressures Price & Value for Money (VfM) Most Economically Advantageous Tender (MEAT) rather than Lowest Price Collaborative buying by authorities – purchasing consortia Rationalisation & Framework Agreements, Contract Bundling; Reduction of public sector in house management overhead and increase in outsourcing NB Suppliers ability to deliver efficiency savings and effectiveness

5. Context: Economics VfM is the optimum combination of cost, quality and fitness for purpose to meet the buyers requirements (it is not about the lowest price) Local authorities are subject to the Best Value guidelines Embraces the concept of the price-quality relationship Selection usually will be made on the most economically advantageous tender (MEAT)

6. Context: Society & Environment Corporate Social Responsibility Sustainability & Equality Innovation & non contractual outcomes (Added Value) Local Government Act 2000 – Wellbeing Powers - Leicestershire County Councils Sustainable Commissioning & Procurement Strategy (2009- 13) performance measures: - No. of contracts with a Total Value exceeding £1m that include a Social Clause - No. of high risk contracts where environmental considerations are included in the contract award (weighting 15% or more)

7. Context: Technology E-Procurement: Transition from paper based to electronic based systems and processes: E-Portals E-tendering E-auctions Iprocurement Purchasing Cards (pCards) Real time reporting Payment and Servicing

8. Opportunities: Public Sector 9 Local Authorities: Leicestershire County Council Leicester City Council North West Leicestershire District Council Charnwood Borough Council Melton Borough Council Blaby District Council Harborough District Council Oadby & Wigston Borough Council Hinckley & Bosworth District Council 3 Universities: Leicester, Loughborough, De Montfort 7 FE colleges: Stephenson, Loughborough, Brooksby Melton, North Warwickshire & Hinckley, South Leicestershire, Leicester, Loughborough University School of Art & Design Schools Other: NHS (subject to major review Housing Associations / RSLs The Emergency Services

9. Opportunities UK Public procurement is 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 2012-13, the Council will need to make savings of around £70m - thats 25% of its budget. Leicester City Council estimated procurement budget for the Authority is £260 million p.a. (2007-2008). NHS Leicestershire & Rutland Procurement Partnership influences spend of approximately £250 million on goods and services each year.

10. Leicestershire County Council Procurement Expenditure (2008-09)

11. Opportunities Policies to encourage SME involvement and a more level playing field Better transparency and simplified procurement processes Equal treatment and fair competition Open markets & better access to information NB: Procedures can be complex, time consuming and open access creates more competition Adopt a strategic approach Willingness to be involve

12. Opportunities: SMEs Brings greater competition Lower cost base Innovation Responsiveness Flexibility Quality of service Specialists Customer focus Local Knowledge Bear this in mind when you are developing your USP for a particular contract!

13. Public Procurement: Demystifying the Process

14. Procurement Procedures: The formality of the procedures and process increases in line with the contract value and risk. Lower value contracts Advertising not essential Officer discretion Approved supplier lists Verbal and Written Quotes common or tender process Easiest to compete and win – harder to find Higher value contracts Advertised Formal Tender process only Essential above EU Thresholds Framework agreements Easiest to find – harder to win

15. Procedures – Example Contract TypeContract ValueProcedure Very low quoteUnder £5,000No formal procedure shop around Lower value quotes / small lots £ 5,000 - £20,000Two written quotes Low - Medium£21,000 - £49,000Three written quotes / formal tender process Sub EC Threshold£50k - EC thresholdFormal tender process EC Threshold£156,442 (Supplies) £156,442 (Services Part A) £3,927,260 (works) OJEU published Full EU procedure Each organisation has its own published procurement policy, procedures, processes and contract value thresholds in place. For example.........

16. Public Sector Organisation Threshold (goods & supplies) Procurement Process & Source Leicestershire County Council <£1k £1k – £20k >£20k - £100k >£100k - EU threshold (£156,442) 1 Verbal / Written Quote 3 Written Quotes or www.sourceleicestershire.co.ukwww.sourceleicestershire.co.uk Request for Quotation www.sourceleicestershire.co.ukwww.sourceleicestershire.co.uk Formal Tender Process www.sourceleicestershire.co.ukwww.sourceleicestershire.co.uk Or www.espo.orgwww.espo.org Leicester City Council< £10k £10k - £49k £50K - EU threshold (£156,442) Up to £250k (works only) Verbal / Written Quotes (officer discretion) 3 Written Quotes or Formal Tender Process (officer discretion) www.sourceleicestershire.co.ukwww.sourceleicestershire.co.uk or www.espo.orgwww.espo.org www.exorgroup.co.uk/supplier North West Leicestershire District Council <£10k £10k – £50k £50 - EU threshold (£156,442) Construction works only 3 Verbal Quotes 3 Written Quotes Formal Tender www.sourceleicestershire.co.ukwww.sourceleicestershire.co.uk Invite tenders from pre qualified suppliers registered with www.constructiononline.co.uk www.constructiononline.co.uk Local Procedures

17. Procedures Common Procurement Procedures: OPEN - One Stage Process Each applicant submits a full priced tender RESTRICTED – Two Stage Process i) Pre Qualification Questionnaire (PQQ) to select shortlist of potential suppliers ii) Invitation to Tender (ITT) to shortlisted potential suppliers –full priced tender required

18. Procedures FRAMEWORK – Two Stages or More Suppliers selected through an open / restricted procedure to a panel of suppliers for given period Call offs or mini competitions may be held when services / goods required Less common: NEGOTIATED - Two Stages Very complex, high value Tender specification not clear – supplier input required COMPETITIVE – Two Stages Tender specification requires development – dialogue with supplier

19. Procedures Pre Qualification Questionnaire (PQQ): Evaluation of organisation Are you safe and appropriate choice? Compliance Past performance / track record Selection criteria Invitation to Tender Stage (ITT): Evaluation of bids Your service / product / works offer Future performance Award criteria

20. Procurement Process Overview Procure Contract Notice EOI Tender EvaluateManage Review Commission PQQ Award

21. PQQ Information General Business Information Business Details Status (Sole contractor / consortium) Ownership Business Probity Professional Conduct Documentation required may include: Company History HR Information Administrative Information (Company Registration/VAT Number) Quality Standards Accreditation / Certificates

22. PQQ Information Financial & Insurance Information: Turnover Accounts Insurance Documentation Required may include: Audited accounts, Management accounts, Parent company accounts Bankers statements & references Financial projections, including cashflow forecasts Details of previous contracts and values Capital availability Certification of Incorporation, Certificate of Name Change Insurance Certificates

23. PQQ Information Business Activities, Track Record, References Business Activities HR Information (FTEs / Training Records / CVs) Referee Contact Details for recent contracts Relevant Contract Performance Subcontractors Capability Statements Case Studies References (norm = 3 recent referees)

24. PQQ Information Essential Policies: Quality Management Equality & Diversity Health & Safety Environment Management & Sustainability Others Policies: Business Ethics Corporate Social Responsibility Business Continuity Sub Contracting PQQ may require you to supply : specific responses, outline of strategy, copy of statements, copy of certifications etc

25. PQQ Evaluation PQQ will be evaluated to select potential suppliers to invite to tender. Based on: Business Probity Technical Capability and Capacity Financial Information Contract Compliance Policy Conformity NB: Evaluation includes: Pass / Fail criteria Financial risk based assessment Criteria have different scores with weightings

26. Example Scoring Framework SectionScore Weighting 1Organisation DetailsN/A 2Financial InformationN/A or Risk Based Assessment Pass/Fail 3InsurancePass/Fail 4Business Activities15% 5Business Practices30% (Total) Health & Safety5-10% Quality Assurance5-10% Environmental Management5-10% Equality5-10% 6Requirement - specific40% 7Experience & References15% 8Professional & Business StandingPass/Fail

27. ITT Information If you are shortlisted from the PQQ or for the Open Tender procedure Invitation to Tender documents will normally identify the information required and how to structure your response. The areas covered are usually as follows: What are you going to do How are you going to do it How much will it cost Who is going to do it What is your track record / prior experience Compliance References

28. ITT Information Invitation to Tender (ITT) pack will include: Instructions to Tenderers The Specification Form of Tender Draft Contract Terms and Conditions Declarations / Bona Fide Pricing Schedule

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. Adopt a Strategic Approach: Tactics Before you start: is the tender opportunity right for your organisation? (To Bid or Not To Bid?) Download / print off ALL PQQ / tender documents and read them carefully: Is the specification relevant to your business activities? Do you have a track record in the area? What % of turnover does the contract represent – 20% rule? What are the risks, who are your competitors and what is the % chance of success? Is there an incumbent? Can you answer each question with the information required? Do you have the supporting documentation in place for compliance? Can you make commercial sense of the contract price? Do you have the in-house resources to deliver – do you need partners / subcontractors? Do you have the time / resources to prepare the bid by the deadline?

31. Adopt a Strategic Approach: Key Points Address each element of the tender specification and structure your response accordingly Do not cut and paste from previous bids Be specific in your response – do not provide generic information Understand what the buyer requires – show how your solution goes the extra mile Respond to the questions with relevant evidence and / or provide appropriate examples e.g. Case studies Use diagrams, illustrations, graphics Realistically price your offer and use any financial model provided Review the drafts against the criteria, scores, weightings and revise Proof read and check any figures / costings Aim for clarity, brevity, readability and persuasion

32. Adopt a Strategic Approach: Key Points Review the evaluation criteria, scores and weighting (this should influence time / effort spent on each criterion response) Beware of yes / no, pass / fail criteria References – recent and relevant Use tender envelope / label if provided Ensure the submission is complete AND signed Include copies of requested documentation e.g. Insurance certificates, accounts, policies etc Respond by the correct format, date + time (electronic, electronic + post, post?)

33. Tender Preparation: Key Steps Appoint a bid manager / individual and team of key people Meeting(s) with tender team for detailed review and interpretation of tender requirements & criteria (including scores & weightings). Prepare work plan & allocation of roles/tasks/milestones with reference to tender & submission deadline. o NB: Build in time to review, refine and style bid 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. Conduct regular reviews of the draft tender Conduct a mock assessment against the scoring matrix Ensure you have enough time for signing and submission Post submission ask for feedback

34. Finding Opportunities Where should you look / who should you know? PUBLISHEDUNPUBLISHED SOURCES Tender websites & Supplier portals Networking / relationship building Organisational / Sector websitesProcurement Teams / Category Managers Tenders Electronic Daily (TED)Operational departments and units Local / National press / Press releases Market analysis / competitor intelligence Trade PressPartners / sub contractors Meet the buyer events / briefings Second / Third Tier Contractors / Supply chains

35. Contract Notices KEY TENDER WEBSITES Name:Source:Used by: Eastern Shires Purchasing Organisation www.espo.orgLAs, NHS in Leicestershire, OJEU tenders Source Leicestershirewww.sourceleicestershire.co.ukLAs, NHS in Leicestershire Leicestershire County & Rutland NHS http://www.lcr.nhs.ukNHS In-Tendwww.in-tend.co.ukUniversities, Colleges, Schools, LAs (some in Leicestershire and nationally) Blue Lightwww.blpd.gov.ukPolice, Fire & Rescue Services (including Leicestershire Constabulary & across UK) Supply to Governmentwww.supply2.gov.uk www.supply2health.nhs.uk Lower value government tenders (*website will be replaced by Contracts Finder March 2011) OJEUwww.ted.europa.euAny public sector contract above EU Threshold

36. Finding Opportunities: e-portals Identify a number of key tender websites Familiarise yourself with the website format and content Register and or publish company details Set up for Alerts service, newsletters etc Appoint key individual(s) to monitor regularly for new contract opportunities Apply filters to your search words (decide which opportunities to focus on)

37. Buyer Requirements Main evaluation criterion: Most Economically Advantageous Tender Understanding buyers needs Combining price with quality and other relevant factors Value for money Acceptable level of risk Efficiency Improvement in performance or cost savings Meeting department and organisations objectives Reliability, consistency Contract management Inspection and audit

38. Buyer Preferences LIKEDont like Concise and precise languageWordy 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 informationLack of detail/explanation or data dump Properly defined & appropriate resourcesUnclear who will be involved in delivery Systems & proceduresExaggerated and unsubstantiated claims Innovation – or the opposite (tradition)Poor evidence of reliability Risk assessment (mitigations)No risk assessment Case studies & referencesIrrelevant case studies

39. Buyer Preferences LIKEDont like Concise and precise languageWordy 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 informationLack of detail/explanation or data dump Properly defined & appropriate resourcesUnclear who will be involved in delivery Systems & proceduresExaggerated and unsubstantiated claims Innovation – or the opposite (tradition)Poor evidence of reliability Risk assessment (mitigations)No risk assessment Case studies & referencesIrrelevant case studies

40. Get Bid Ready: Preparing the Documents Make note of instructions, word limits and submission format Try to understand what each question is asking and why they are being asked. Be compliant! Note the scoring / weighting of criteria and spend time / effort on your response accordingly Make careful note of the deadline and make sure you submit well in advance of the deadline (avoid last minute submissions) Anything you are not sure of, contact the buyer (but be aware that any question you ask will be notified to other suppliers) Answer all questions honestly and be keen and positive in your responses (emphasise your USP). Double check your response / second pair of eyes Ensure you complete and submit all the documents required If unsuccessful (or successful) ask for a debrief

41. Get Bid Ready: Action Plan Register AND publish on e-portals Set up internal processes and identify individual(s) to monitor tender portals, sources, alerts Identify and network with your local public sector buyer targets (at departmental / procurement level) Attend meet the buyer events / tender briefings Develop a Tender Resource Pack (e.g. Company & financial information, case studies, references etc) Establish a working group for tender preparation Search for potential partners / subcontractors Strengthen your technical capacity, infrastructure, bid skills Develop, improve your policies Consider accreditation (e.g. CHAS, ISO, IiP etc) Review unsuccessful bids Act strategically – know when to bid and when not to bid!

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

43. Further one to one support: bob@njm.co.uk vicky@njm.co.uk 0191 284 4949