Public Sector Procurement Claire Smart Director of Strategic Procurement Gloucestershire County Council
Agenda l l l What we buy Where we advertise Tendering – the rules Frameworks Shortlisting Invitations to tender Award and contract What’s New Sustainability Equalities Ten most common tendering mistakes
Gloucestershire Procurement Partnership A collaborative public sector approach to procurement in Gloucestershire Gloucester NHS Gloucester City Homes Gloucestershire County Council Gloucester City Council Forest of Dean District Council Stroud District Council Cotswold District Council Tewkesbury Borough Council Cheltenham Borough Council
NHS – Maternity Ward
County - Schools
District – Leisure Centres
NHS - Nurses
County – Fire & Rescue
County – South West Bypass
County - Weddings
District – Rubbish Collection
County – Rubbish Disposal & Recycling
NHS – Stop Smoking Campaign
County – Farms
NHS - Ambulance Service
District – Planning & Development Services
Districts – Council Housing
County – Bus Services
District – Pest Control
District – Management of Elections
County – Meals on Wheels
County – Care for the Vulnerable
Where we advertise l l l Regional Portal – Supplying the South West OJEU Web pages
Benefits of the Portal www. supplyingthesouthwest. org. uk l l It’s Free It’s easy It’s a one stop shop – you register, it alerts you to opportunities in your business area It gives you access to multiple organisations across the South West
Governments Transparency Agenda
Market Intelligence l Early market engagement l Market Sounding l Supplier assessment (selection and award) • Shaping existing markets • Creating markets • Project feasibility • Supplier perspectives • PIN
Public Sector Procurement Tendering
Rules – Internal l Each organisation is a statutory body and has rules which cover how it is set up, the delegation of authority or reservation of powers, and tendering levels and procedures to be followed. l Each organisation has set a level at which competitive quotes or competitive tendering takes place. An example may be £ 5, 000 for quotes and £ 25, 000 for tendering.
Rules – External (Regulations) l The Public Contracts Regulations 2006 (SI No 5) & The Public Contract (Amendments) Regulations 2009 (SI No 2992), derived from EU Directives l European threshold varies for different public sector organisations and for goods & services versus works contracts. It generally changes every 2 years and is based on the Euro. - NHS threshold is set at - Councils’ threshold is at - All “works” thresholds are set at £ 113, 057 £ 173, 934 £ 4, 348, 350
What needs tendering? l The Value of contract must be considered over the life of the contract. This is the total spend for the organisation over a period usually of 3 - 5 years l Part A services, as stipulated in the regulations and would include services that could be provided across member states. l Part B services may be excluded from full EU tendering as they have special considerations for a country rather than the EU. eg: legal services/personnel placement
What already exists ? l If a local contract already exists there is an expectation that the contracted supplier/suppliers would be used. l There may be a framework in place l If no current contract exists or is due to expire a full tendering process may be applicable, either locally for a lower level contract or via OJEU (Official Journal for the European Union) for higher values. l Set formats apply for OJEU tenders but often the same sets of forms will be used for local and OJEU tenders.
By framework we may mean three things l One we might develop for ourselves • E. g. Gloucestershire Building Framework, major works and consultants l l One we might develop for ourselves and other named users One that someone else has developed that we are allowed to use
What is a Professional Buying Organisation ( PBO) A purchasing agent for members PRO 5 - joint Committee of Local Authorities ◦ ESPO ◦ CBC ◦ WMS ◦ YPO ◦ NEPO Government Procurement Services (GPS) And many more……
Why do we use frameworks l l l l Quicker to use Safer More efficient than everyone tendering Partnership / collaboration agenda Shared expertise Long term relationships with suppliers Combined purchasing power
Opportunities & threats for suppliers l l l l Larger tenders Less individual tendering opportunities Fewer contracts let Usually more business if you do get on frameworks but it is not always guaranteed Know where to look for opportunities Understand the tendering requirements Consortia
Public Sector Procurement Shortlisting
Why do we shortlist? It’s not compulsory. Shortlisting is about identifying suppliers who have the right skills and experience for the requirements, to take through to the next stage. The number of suppliers taken forward may need to be reduced to a manageable number.
What can we shortlist on ? l l l Exclusions - evidence of unsuitability such as bankruptcy, criminal convictions, failure to pay tax etc Economic and financial standing Professional and technical capability • Adequately equipped to do the job • Satisfactory track record
How we shortlist l Pre-qualifying questionnaire • Ensure suppliers are asked to provide the right information about their capability, capacity and organisational situation l Set evaluation criteria • Hurdles: i. e. minimum size • Graded: i. e. 5 most experienced organisations go through to next stage.
Reasons you can be ‘disqualified’ (before the ITT stage) l l l l l No evidence of capability to meet specification Financial instability or where you are not deemed capable to perform a contract of the value envisaged Misleading information provided or failure to disclose Unpaid taxes or social security payments Criminal offences relevant to the contract: eg security guard with an arson conviction; Winding up order against supplier Suspension from trading: eg bankruptcy of a director Legal problems: eg patent rights Found guilty of organised crime, corruption or fraud
Public Sector Procurement Evaluation (Invitation to Tender – ITT)
What do we advise companies? l l Evaluation criteria is specified in the documents issued by all public sector organisations, often in the invitation to tender pack of documents. The criteria may state a pass/fail, a scoring and weighting evaluation or a priority list with minimum standards.
How do we evaluate? l - - We evaluate offers by: checking through the tender return itself seeking references or visiting reference sites using trials or tests, samples etc setting up presentation sessions to investigate offers in more detail
Evaluation considerations l Priorities – Total cost is important due to our need to provide value for money for public funds. However, other considerations also come into play in Value for Money, such as technical ability, quality, training etc. Minimum standards may exclude some offers from further consideration.
Evaluation considerations l Total evaluation The whole evaluation may include a variety of methods – eg references, certification/registration (eg gas installers) and financial and qualitative evaluations. Once this is complete we are ready to advise the tenderers who is the preferred bidder and why others have not been successful.
Reasons you can be ‘excluded’ (After submission of bid) l After evaluation of the product or service there is an unacceptable price, delivery or terms (usual evaluation criteria to assess bids) l Improper approaches: e. g. canvassing l If it is subsequently discovered reasons for disqualification that would have disqualified a bidder at the PQQ stage had the information been known.
Public Sector Procurement Award, De-brief and Contract
The criteria Award is either on the basis of lowest price or Various criteria that can establish the “most economically advantageous” tender (MEAT) * It is worth noting we have an obligation to achieve value for money
The process l We will notify any supplier and has submitted a bid, successful or otherwise of our • • l l l Decision to award the contract Or decision to award a framework agreement This notification will be in writing We will allow 10 days between the date of despatch of this notification and the date on which we propose to enter the contract. There may also be additional local standstill periods within authorities to allow local scrutiny of the process.
Debriefing l l Available to unsuccessful tenderers Can help supplier • • l Re-think approach Receive targeted guidance (especially to smaller / newer companies) Receive reassurance about process Receive better understanding of process Only a supplier’s own submission will be discussed. We cannot pass on commercially sensitive information about other suppliers.
The Contract l l Once we have awarded the contract we cannot negotiate on price or any fundamentally different terms. Throughout the contract supplier and purchaser will be building up their knowledge about the service and each other. Monitoring should be • • Proportional Relevant Recorded Used to effect improvements Exit must be managed as mutual dependencies may have arisen.
Public Sector Procurement What’s New
Changes to EU Procurement l l l l Reconciling part A & B Thresholds Toolbox, accelerated procedure Negotiation Shortlisting and ITT Regulate subcontracting SME friendly (lots, pre-qualification)
Social Value in Public Service Contracts l The Bill aims to strengthen the social enterprise business sector and make the concept of 'social value' more relevant and important in the placement and provision of public services. l Local authorities, when entering into public procurement contracts, to give greater consideration to economic, social or environmental wellbeing during the pre-procurement stage.
Dynamic Purchasing Systems l l l A fully electronic system for setting up / maintaining a list of providers from whom you can purchase as and when required. Providers need to pass relevant selection criteria and provide an ‘indicative tender’ which meets the customer’s specification. Providers can join during the period of the DPS. As requirements arise they must be advertised so providers not yet on DPS have opportunity to join. All providers on the DPS must then be invited to tender.
National Procurement Strategy l l l Quick Win Strategy 2010 Big Win Strategy 2011 National Steering Group National Advisory Group Local Government Collaborative Commissioning Group National Category Management
Sustainability Economy Society Environment
Sustainable Procurement l Sustainable Procurement Policy • “We will integrate the economic, social and environmental strands of sustainability into our procurement and commissioning decisions in a manner which supports the UK Government’s approach to sustainable development. ” l It’s our responsibility l It makes business sense
Environmental Sustainability Environmental prosecutions Environmental Policy Environmental Management Systems Waste & recycling Carbon emissions Energy efficiency
Social Sustainability Apprenticeship Schemes Working with local colleges Local sourcing and employment Monitoring of Supply Chain
Economic Sustainability l Sustainable business is ever more important l Cost benefits 140 120 l l Resilience Staff moral Marketing 100 Pence per Litre l PETROL PRICES 1989 - 2011 80 60 Premium unleaded 40 Diesel 20 11 20 09 20 07 20 05 20 03 20 01 20 99 19 97 19 95 19 93 19 91 19 89 19
Equalities Implications of the public sector EQUALITY DUTY
Implications to GCC and our Contractors l l GCC are legally responsible for complying with the Equality Duty in the undertaking of procurement. External contractors may be subject to the Equality Duty if carrying out a public function on behalf of the public authority. • Eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the Act • Advance equality of opportunity between people who share a protected characteristic and those who do not • Foster good relations between people who share a protected characteristic and those who do not.
Pre-Qualifying suppliers on Equalities GCC as a public authority must have due regard to equality considerations in order to meet our obligations under the Public Sector Equality Duty. [This will be relevant and proportional to subject matter] Contractors are therefore likely to be asked about: • Possessing an Equalities Policy • Provide training on equal opportunities • Comply with Equality Act • Any unlawful discrimination? • Steps taken http: //www. equalityhumanrights. com/advice-and-guidance/newequality-act-guidance/equality-act-starter-kit/
10 common mistakes made by tenderers!
1. Late Submission The return date and time are fixed. It is vital that you get your tender to the right location and on time.
2. Open envelope Make sure your envelope is sealed. If It is opened it could be disqualified
3. The wrong information on the envelope If the envelope isn’t clearly marked as a tender it may be opened at the wrong time or place, and can then be disqualified.
4. Canvassing individuals in the tendering organisation The tender process has to be fair and transparent. If you try to influence staff or try to obtain information outside the process your bid could be disqualified.
5. Alternative bids “We can’t do what you’re asking but we can do this…” Unless we specifically ask for alternatives we cannot accept them.
6. Qualified bids “We can give you this price, but only if…. . ” Unless we specifically ask for qualified bids we cannot accept them
7. Wrong information supplied Don’t tell us what you want us to know, tell us what we ask for, or anything that relates directly to the tender.
8. Gaps in information We are not allowed to make it up or guess, so please make sure that all information needed is supplied
9. Don’t assume we know you We have to assess you on the information that you supply for an individual tender, not on what we may know about you.
10. Be realistic about what you can actually achieve.
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