1. Procurement Approaches Jonathan Jones Programme Manager Smarter Procurement - IEWM

2. Collaborative Contracting  What did we originally set out to achieve? And did we achieve it?  Does the original business case still apply?  What is the current state of the supply market? (any changes?)  Are we all getting a good deal out of the arrangement (or just some?)  Is the greater good still delivering?  Will we repeat the contract or now do something different?  Is it over or under utilised and why? Fundamental Questions

3. Advantages  Larger volumes will most of the time improve prices  Collaborative arrangements provide greater strength over the market  Collaboration will save resources and duplication of effort  Most of the time local authorities are commissioning similar items Disadvantages  Can sideline SME’s or small local suppliers (politically bad)  Generic requirements rather than bespoke to your service requirement  Can be a lot of work for little reward Aggregation Benefits

4. Legal and Transparency  Following Standing Orders and Financial Regulations  Not falling fowl of EU law  Aggrieved suppliers doing; formal complaints, FOI, legal letters, challenge, etc, etc Value for Money  The “S” word  Exposure to competition What worries procurement?

5.  Open  Restricted  Negotiated  Competitive dialogue  Frameworks  Dynamic purchasing systems Different tendering procedures or arrangements

6. The open procedure Format  One tendering activity open to all  Minimum 52 day timescale (reduced by 5 days for full electronic access)  First port of call for EU (or any tendering) Advantages  Bids made against EU OJEU advert  Highest level of transparency Disadvantages  May generate a large number of tenders  Under the Remedies Directive could generate admin  May reduce opportunity for innovation

7. The restricted procedure Format  Two stage process; requests to participate / tendering  37 days PQQ / participate and 40 days receipt of tender  Heavily used by NHS, complex projects and construction  Selection and award criteria separated Advantages  Utilises a Pre-qualification process for early de-selection  Assessment of financial, technical and economic elements  Can allow for specification development (transparent) Disadvantages  A longer two stage process  Can be misused when open procedure is acceptable  Now holds a Remedies Directive requirement

8. The negotiated procedure Format  Criteria for use  Frowned upon but good procedure Advantages  Applicable when final outcome is not clear  Used in emergency situations  Used when a procurement has failed  Opportunity to full OJEU advertise (technical, artistic or exclusive rights by bidder) Disadvantages  Open to challenge if not advertised (Remedies Directive)  Must meet the criteria for use  Not always now deemed as good practice  The EU doesn’t recognise bad planning

9. Competitive dialogue Format  Can be approached via several options i.e. notice for bidders or BAFO’s  Strong project management approach required  Procedure one or procedure two Advantages  Allows dialogue with the bidders to develop one or more suitable alternative solutions capable of meeting the requirements  Used when contracting authority seeks to award a particularly complex contract  Used when the use of the open or restricted procedure will not allow the award of that contract.  Complexity is defined as “technical” (not able to specify), “legal” or “financial” Disadvantages  Can prove restricting and cumbersome  Can prove to be a lengthy process

10. Frameworks (general) Format  Sets out the general terms of the contract  Mini competitions can be run against framework categories (call off’s)  Frameworks should now be in place for four years maximum  Can break down requirements into various lots  Can follow; open, restricted, negotiated or competitive dialogue award process  The estimated maximum quantity or value of the goods, works or services for which call-offs are to be placed is generally clear. Advantages  Allows for an overarching procurement to reduce procurement resources later  Can provide advantages of big spend whilst providing no direct commitment Disadvantages  May not always secure the best value for money (contract)  Now limited to four years duration which may limit return on investment for supplier and not therefore obtain best terms  There can be issues around “scope” and “variation” of requirements to specification a four year duration

11. The framework agreement Format  Will be clearly advertised in OJEU notice as a “framework agreement”  Will include all contracting organisations entitled to call-off under the terms of the framework agreement (named or a generic description may be used)  Framework agreements can be concluded with a single supplier or with several suppliers, for the same goods, works or services. Advantages  There is no commitment to buy from the agreement  Final specific terms and conditions can be agreed  Standstill period optional when mini-tendering Disadvantages  The length of the framework agreement will be a maximum of four years unless there are justifiable exceptional circumstances (under Article 32);  May not always secure best value (mini competition requirement)  Under the Remedies Directive if standstill is not applied the is still a potential for ineffectiveness

12. The framework contract Format This a contract concluded between a Contracting Authority and an economic operator for the purpose of laying down the essential terms governing a series of “specific contracts” to be awarded during a given period, in particular as regards;  The duration  The subject  The prices... Advantages  Improved supplier pricing due to potential quantities and commitment agreed  Used for specific pieces of project work (Construction / partnerships) Disadvantages  Can be a “one size fits all” scenario you are obligated to

13. Dynamic purchasing systems Format  Like a framework agreement except during its life other economic operators (suppliers) may submit indicative bids and if they meet the published criteria, join the system.  Must use the open procedure and should be limited to a maximum duration of 4 years duration period.  It is a completely electronic provisioning process aimed at the supply of standardized and widely used goods and services.  Any provider which satisfies the selection criteria and submits an indicative tender may join at any point in its duration period.

14. Dynamic purchasing systems Disadvantages  Still a new and highly experimental procedure  May generate a large number of tenders (like an open procedure)  Under the Remedies Directive could generate admin  May reduce opportunity for innovation at meeting a criteria  DPS is entirely electronic and commissioning organisations may need to undertake extensive development work with the provider sector to ensure that it is able to respond Advantages  The DPS provides a list of registered suppliers that developes and grows  It is an entirely digitalized process  Provider offers may be improved in successive stages of the process  Supports transparency, flexibility and competitiveness of the procedure

15. Part A and Part B Services Part A services (Annex II A) Are categories 1 to 16 and are traditionally advertised in OJEU with supporting CPC or CPV reference codes. Part B services (Annex II B) Are categories 17 to 27 and are traditionally not advertised in OJEU, however, award notices are published for statistical purposes. Key features are; Locally delivered services (hotel, rail, people placement etc) 25 health and social services (CPC 93) (CPV 74511000-4 / 85000000-9 +) 27 other services

16. Selection and award criteria Selection Criteria  Assessment of provider capability  Assesses their economic or financial ability to deliver contract  Assesses technical or professional ability – relevant expertise and experience Award Criteria  This considers the merits of “eligible” tenders  To assess which tender is “most economically advantageous  Using only using criteria linked to the “subject matter” of the contract

17. The Remedies Directive Came into force December 2009 giving more power to the supplier to challenge any perceived weaknesses within a public tendering exercise, as follows; Top six mistakes (1)Mixing up the selection and award criteria (2)Award criteria and weightings (3)End stages of competitive dialogue (4)Frameworks (illegal access) (5)Moving goalposts (re-negotiating) (6)Negotiating in restricted procedure Bidders will generally feel more able to challenge due to the recession, greater knowledge of their rights, more feeling of “formality” with less fear of “rocking the boat”. Warning! Don’t show to the marketplace any perceived weaknesses!

18. Material change occurs where there is evidence of intention to renegotiate fundamental contract terms where:  It is so substantial, different providers would have bid  The winning bidder would have been different  These are effectively new services or products  The risk/reward balance tipped in favour of contractor Material Change

19. Items to consider for a new contract;  What lessons have been learned? (factor in)  What should the new specification look like?  Have we consulted the market / suppliers? (what’s new)  Are we all still committed to this?  Do we have a clear vision of what we want to achieve? Going forward

20. Thank You jjones@westmidlandsiep.gov.uk