Presentation on theme: "Bob Moodie & Vicky Byers NJM European, Economic & Management Consultants Ltd Selling to the Public Sector – helping Leicestershire SMEs unlock their potential."— Presentation transcript:
Bob Moodie & Vicky Byers NJM European, Economic & Management Consultants Ltd Selling to the Public Sector – helping Leicestershire SMEs unlock their potential Preparing Effective PQQs & Tenders
The Procurement Context & Process Identifying tendering opportunities in the local economy Developing a Strategic Approach Preparing effective PQQs and Tenders
The Procurement Context: Regulatory Framework European LocalNational EU Procurement Directives (Competition Policy) Government Strategy Statutory Requirements LA Procedures, Statutory Requirements Local Agreements
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
A New Procurement Environment Policy/LegalEconomic/Financial EU Competition Policy (Procurement) Coalition Govt. / Local Govt. (Transparency – LAs must publish details of all Invoices of £500+) Coalition Govts aspiration to award 25% of central Govt. contracts to SMEs Leicestershire County Councils Sustainable Commissioning & Procurement Strategy (2009-13) Price & Value for Money (VFM) & M.E.A.T. Comprehensive Spending Review Rationalisation & Framework Agreements Contract Bundling (Economy of Supply) Ability to deliver economies and efficiency savings SocialTechnological Corporate Social Responsibility Sustainability, Equality & Diversity Innovation & non contractual outcomes E-Portals E-tendering & E-auctions Real time reporting
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)
Procurement Process Overview Procure Contract Notice EOI Tender EvaluateManage Review Commission PQQ Award
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.
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
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 Blaby District Council £0 – £1.5kOfficer discretion >£1.5k – £5k2 Written Quotes >£5k – £50k3 Written Quotes >£50K - EU threshold (£156,442) Formal Tender process (min. 4 organisations invited) 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
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
Contract Notices: Key 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
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 your details on tender e-portals and set up for Alerts service, newsletters etc
Set up internal processes and individual(s) to monitor tender portals, alerts, sources and review feedback Network (buyers/commissioners, meet the buyer events) Competitor analysis (New Transparency - £500+) Search for potential business partners / collaborators / subcontractors Develop / improve your key policies so that you comply with public sector tender competition requirements Accreditation (e.g. CHAS, ISO, IiP etc) Be Systematic & Get Organised
To bid or not to bid? Developing a Strategic Approach
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?
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?
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
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
Pre-Qualification Questionnaires The First Hurdle Evaluation of your organisation The aim of the PQQ is to check that your company is (for the contract term) Technically competent Financially sound Legally compliant Gives the buyer a means of short-listing interested organisations on the basis of fair and objective criteria
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
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.
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
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
PQQ Information General Business Activities Overview of Existing Business Activities Overview of Main Areas of Expertise & Accreditation What percentage of your business is concerned with providing services similar to the contract requirement HR Information (Number of Staff, Staff Profiles) Contract Specification Explain and demonstrate your Capability and Capacity to fulfil the contract requirement Case Studies (relevant to contract specification and demonstrating your ability to fulfil the size, scope and complexity of this contract) Subcontractors Relevant References (norm = 3 recent referees) & contact details
PQQ Information Essential Policies: Quality Management Equality & Diversity Health & Safety Environment Management & Sustainability Why are they necessary? They are a legal requirement They are a purchaser requirement They help articulate the companys values and principles for both staff and clients They bring business benefits and are relevant to contract delivery
Do you have a Health & Safety Policy? Weak Answer: Yes, see Appendix 1 Good Answer: The Health & Safety of our staff and customers is a vital part of the companys quality process. We operate a comprehensive Health & Safety Policy (see Appendix 1) covering all aspects of our products (services) and operations and it is reviewed biannually. For an SME employing less than 5 people: Although we are not required legally to have a Health & Safety Policy, we take this matter very seriously and have adopted a Health & Safety Policy in the interests of our staff and clients (see Appendix 1) Accentuate the Positive
What Quality Assurance arrangements does your company operate? If no accreditation is held please explain why not and what alternative steps you take to ensure quality at work? Weak Answer: We operate our own quality system. We have determined that formal accreditation is inappropriate to our companys 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) Accentuate the Positive
Business Continuity What is your Approach to Risk Management in terms of Business Continuity? Do you have a formal Business Continuity Management Programme? If YES, enclose a copy of your plan/programme document Within the last 3 years have there been any occasions when you business operation has been disrupted? If YES what were the circumstances and what was the effect upon your customers? Do you have a strategy for ensuring continuity of supply from your critical suppliers?
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 PQQs & Tenders: Beware Cutting & pasting! 8. Generic PQQ/Tender response 9. Providing response on general capability instead as opposed to specific contract requirements
Invitation To Tender (ITT) The Second Hurdle Evaluation of your detailed proposal What are you going to do How are you going to do it Who is going to do it How much will it cost What is your track record / prior experience Compliance References
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
Preparing the Tender Managing the preparation of your bid 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
Preparing the Tender Tender Design: What is the Buyer looking for? Design a clearly structured tender response aligned against each tender requirement and criteria (e.g. core, gateway and specific). Ensure compliance! Demonstrate a clear understanding of the brief (i.e. the challenges are understood and addressed) Methodology: clearly show who (CVs) does what, why, when, how and benefits from buyers perspective – illustrate with diagram (Gantt) 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? Contract management and communication (i.e. how you interface with the client to monitor project)
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 Presentation Preparing the Tender
Case Studies: Example Structure Client Name & Contract Title Work of same/similar nature, scope and scale What, When and How you did it Client Benefit (Outputs & Outcomes) Innovation & Added Value Contract Value/Price Reference confirming work was performed to client satisfaction and to schedule NB Be concise and relevant
Preparing the Tender: Costing Your Proposal Follow Instructions in Tender re presentation of costs/fees/prices For services: Charging Rate(s) (Daily/Hourly) & Time & Personnel 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
Value for Money and Best Value (VfM) 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)
Risk: What is your Approach Risk identified for: Mitigation (i.e. what will you do) Impact (High, Medium, Low) Classification of risk: Reputation (R), Operation (O), Finance (F) Client Delivery Supplier
Exercise As a local company, how might you emphasise that you have a number of advantages?
Exercise: Example Answers Wrong Answer: The Council should give contracts to local companies as a matter of course, because it retains profit in the area and improves local employment levels. Right answers: Lower Cost Base Close proximity to client : Allows customers to change their requirements at short notice Local knowledge: Specialised knowledge of local issues or local communities Fast response time, leading to better and more flexible service Improved environmental impact of shorter travel distance; potential economies of expenses Commitment to sustainable procurement (Investing in Local Supply Chain) Corporate Social Responsibility (Community Investment & Involvement)
Preparing the Tender: Bid Writing Language & Style: Write in plain English: short sentences and paragraphs; Avoid jargon and unexplained abbreviations Use active verbs, refer to we and you In your response try to reflect key wording as found in the tender specification Punctuation and spelling really matter Lay-out: Use clear headings aligned to tender specification; standardise fonts, illustrate where possible Aim for clarity, brevity, readability and persuasion
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
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 Dos & Donts
Concluding Remarks Make note of instructions, word limits and submission format Be compliant! Try to understand what each question is asking and why they are being asked. Answer the Question Note the scoring / weighting of criteria. Spend time / effort on your response accordingly 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 Make careful note of the deadline and make sure you submit well in advance of the deadline (Avoid last minute submissions) If unsuccessful (or successful) ask for a debrief
Be... Compliant Tender Format & Requirements Policies, Insurances, etc Persuasive USP Added Value and/or Innovation Competitive Quality Price