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

2. Navigating the Public Procurement Maze 1. The Procurement Context & Process 2. Identifying tendering opportunities in the local economy 3. Developing a strategic approach to bidding 4. Pre-Qualification Questionnaires 5. Invitations To Tender

3. The Procurement Context & Process

4. The Procurement Context: Regulatory Framework European LocalNational EU Procurement Directives (Competition Policy) Government Strategy Statutory Requirements LA Procedures, Statutory Requirements Local Agreements

5. EU Procurement Thresholds SuppliesServicesWorks Central Government plus some Quangos (see Schedule 1 List) 125,000 (£101,323) 125,000 (£101,323) 4,845,000 (£3,927,260) Other Public Sector e.g. Local Authorities, Universities, FE, etc 193,000 (£156,442) 193,000 (£156,442) 4,845,000 (£3,927,260) Thresholds relate to Total Contract Values (including any extension options), are applicable from 1 st of January 2010 and are NET of VAT Principles: Open competition, non-discrimination, equal treatment and transparency. Note: Exchange Rates

6. Context: Legal Regulatory Framework Search and rescue helicopter service: Privatisation bid process is halted Reason: Preferred supplier, admitted it had access to commercially sensitive information from Department for Transport and Ministry of Defence (MoD).

7. Context: Policies The Comprehensive Spending Review (2010) SME Concordat Equality of Access (SME & Third Sector) 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 Leicester City Council et al - Selling to the Public Sector: Helping SMEs in Leicester and Leicestershire Win Public Contracts

8. Context: Economics Price & Value for Money (VfM): VfM is the optimum combination of Cost and Quality - 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 Pressure on contractor margins Declining markets – big companies going for small contracts

9. 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)

10. 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

11. Procurement Procedure ProcedureCharacteristicsWhen the procedure is adopted OpenAll 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 RestrictedTwo 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 NegotiatedTwo 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 Stage One: Suppliers selected through open/restricted procedure to a panel of suppliers for given period Stage Two: Call-Off or Mini competition will be held when services/goods required Capability and Capacity is important and is generally a recurring/constant requirement (max 4 years; including extension options)

12. 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 formal 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

13. Identifying Tendering Opportunities in the Local Economy

14. Opportunities: Public Sector 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. From 2011-12 to 2014-15, the Council will need to make savings of around £82m, including £22m from commissioning and procurement. Leicester City Councils estimated procurement budget for the Authority was £260 million p.a. (2007-2008). From 2011-12 to 2014-15, the Council will need to make savings of around £100m from its total annual budget of circa £1bn. NHS Leicestershire & Rutland Procurement Partnership influences spend of approximately £250 million on goods and services each year.

15. 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

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

17. 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 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 Hinckley & Bosworth District Council < £5k £5k - £20k £20k - £50k £50k – EU Threshold (£156,442) (Building & maintenance related works only) Quotes (officer discretion) 2 Written Quotes 3 Written Quotes Formal tender process/local press www.sourceleicestershire.co.uk Also use www.constructionline.co.ukwww.constructionline.co.uk University of Leicester£5k - £25k >£25k – EU threshold (£156,442) 3 Oral / Written Quotes Formal Tender via departments or www.in-tend.co.ukwww.in-tend.co.uk Local Procedures

18. 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

19. Contract Notices KEY TENDER WEBSITES Name:Source:Used by: Source Leicestershirewww.sourceleicestershire.co.ukLAs, NHS in Leicestershire Eastern Shires Purchasing Organisation www.espo.orgLAs, NHS in Leicestershire, OJEU tenders Leicestershire County & Rutland NHS http://www.lcr.nhs.ukNHS Voluntary Action Leicestershire www.valonline.org.ukContract opportunities for voluntary sector 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

20. 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)

21. 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 however note that authorities are moving towards framework agreements Register and publish on tender e-portals Network (buyers/commissioners, meet the buyer events)

22. 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 Be Systematic & Get Organised

23. To bid or not to bid? Developing a Strategic Approach

24. Strategic Decision Making Is the tender a good fit in relation to your companys 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?

25. 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?

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

27. Consortia Benefits:Risks: Increase capacity and scope to bid e.g. Overcome PQQ impediments Partner selection and getting Agreement / legal document 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 riskSharing 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

28. Pre-Qualification Questionnaires (PQQs) & Invitations To Tender (ITT) Converting Opportunities

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

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

31. 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

32. 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

33. PQQ Information Financial & Insurance Information: Turnover Accounts Insurance Documentation Required may include: Audited accounts, Management accounts, Parent company accounts Bankers statements & accountants references Financial projections, including cashflow forecasts Details of previous contracts and values Capital availability Certification of Incorporation, Certificate of Name Change Insurance Certificates NB financial vetting is based on sound business judgement and not just the application of financial formulae

34. 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) NB Make sure information supplied is relevant to PQQ & Tender Specification

35. 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

36. 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

37. PQQ: 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

38. Example Scoring Criteria ScoreResponse TypeReason indicated for Score 0Non compliant responseNo relevant information / solution provided in response to contract requirements. 1Unacceptable responsePartially compliant response but with serious deficiencies in solution offered, indicating serious difficulties / inability to deliver contract requirements. 2Unsatisfactory responsePartially compliant response with shortfalls in solution offered, indicating not all contract requirements could be met and thus difficulty in delivery of the contract. 3Acceptable responseCompliant response, indicating basic contract requirements are met but not exceeded. Contract could be delivered. 4Good responseCompliant response, clearly indicating entire delivery can be met and solution offers some limited benefits beyond stated requirements. 5Excellent responseCompliant response, bidder illustrated comprehensive understanding of contract reqs. Proposed solution provides significant additional benefits beyond stated reqs.

39. Invitation To Tender (ITT)

40. 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

41. ITT Information Invitation to Tender (ITT) pack will include: Instructions to Tenderers Introduction from buyer who will set out the vision The Specification The Evaluation Criteria & Relative Weighting Form of Tender Draft Contract Terms and Conditions Declarations / Bona Fide Pricing Schedule

42. Preparing the 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. o NB: Build in time to review, refine and style bid

43. Preparing the 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 buyers 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?

44. 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 gone the extra mile in manifesting your understanding of the brief and the design of your solution? Conduct a mock assessment against the evaluation criteria and relative weighting Preparing the Tender

45. SMEs: Make a virtue of your size Lower Cost Base Innovation Proximity to client or service point & responsiveness Flexibility Consistency of service and personnel Specialist and Local Knowledge Commitment to Sustainable procurement (Investing in Local Supply Chain) Corporate Social Responsibility (Community Investment & Involvement)

46. Preparing the Tender Costing Your 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

47. 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 andweighting. This should influence time and effort in preparation of answers Preparing the Tender Dos & Donts

48. 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 In your response try to reflect key wording as found in the tender specification Short sentences and paragraphs; use introductory headers Punctuation and spelling really matter Aim for clarity, brevity, readability and persuasion

49. Avoiding a Poor Score Common reasons for a poor score: 1. Failure to follow the instructions. 2. Writing by committee, no narrative flow and lack of control/ownership 3. Incomplete or missing answers/sections. 4. Supporting documentation incomplete 5. Repeating answers or referring to see above (questions are rarely repeated) 6. Over emphasising what you sell, rather than what they are looking to buy 7. Recycling old tenders Cutting & pasting! 8. Generic PQQ/Tender response 9. Providing response on general capability instead as opposed to specific contract requirements.

50. 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

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

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