Supporting Small Providers in Procurement Challenges Seminar

1. Supporting People Seminar The RepBirmingham 30 January 2008

2. Background • CLG – concern about impact on small providers of:- • Concentration of the market • Spread of procurement approach • SITRA – specialist technical resource agency for providers and commissioners • HACT – Housing Associations Charitable Trust. A history of working to support small providers neadonconsultingltd

3. The Programme • CLG – follow-up to Value Improvement Programmes – a series of good practice resources for commissioners • SITRA – “A Provider’s Guide To Procurement” and a series of training events • HACT – Capacity-building pilot programme to:- • Explore a range of ways in which small providers can maintain a place in the market • Work with 6 projects providing a budget and facilitation support • Evaluate, write up, produce materials and disseminate neadonconsultingltd

4. The pilots – where? • Durham • Liverpool • Redbridge • Rotherham • Southend • Suffolk neadonconsultingltd

5. The pilots – a typology • Large provider with one small specialist subcontractor • Six characters in search of a lead agency • A coalition of sub-contractors • Conventional “lead agency” consortium • Bidding vehicle neadonconsultingltd

6. The pilots – where they are at present • LSP – Main contract already awarded – discussions about terms of sub-contract and start-up costs. • “Six Characters” – Discussions with two possible lead agencies – both RSLs • Coalition– Three potential partners lined up – awaiting release of tender documents; developing common infrastructure systems • Consortia– one has won 6 contracts; the other has successfully passed PQQ stage • Bidding vehicle– Independent Local Services launched November 07 – working on detail; awaiting details of Framework Agreement and tender documentation neadonconsultingltd

7. Key themes 1- establishing the group • Who’s in and who’s out? • What are you looking for – specialisms, capacity, infrastructure, local presence/reputation, quality? • How big is the pot, and what is commissioner looking for? • How strong is the commitment to collaboration? • Trust, good personal relationships, transparency are essential – backed up by MOU, confidentiality agreement etc. • External facilitation can help groups deal with potentially fissile issues neadonconsultingltd

8. Key themes 2- Defining the USP • Each group has to understand and communicate how it can add value • Points to emphasise include:- • Connectedness • Ability to lever in resources • Strategic relevance • Don’t rely on added value to make up for weaknesses in other areas neadonconsultingltd

9. Key themes 3 – Role of commissioners • Enabling small providers to remain part of the mix requires a proactive approach. • Obvious barriers include bidding and organisational capacity • Unintended barriers can include:- • Rules around access to Framework Agreements • The “20%” rule • Suspicion of consortium approach – cost and communications • Is competitive tendering required? Creative use of waiver powers neadonconsultingltd

10. Good practice in commissioning • Analysis and understanding of the market • Encouragement of collaborative approaches – workshops, capacity building • Allow time for relationship building • Helpline for small providers • “Meet the partners” sessions • Design of method statements and scoring frameworks • Active management of sub-contracting • Change management and exit strategies for unsuccessful tenderers neadonconsultingltd

11. Good practice in bid assessment • There’s a huge amount of variation • Get the quality:price ratio right or go for fixed price • Base bid documents on a vision of what a really good service would look like:- • Integrated into a wider network of provision • Able to mobilise resources within the community • Contributes to broader strategies – e.g. sustainable communities, crime and disorder reduction • Ensure that items such as strategic relevance, partnership & joint working and added value are given a heavy weighting neadonconsultingltd

12. Implications for small providers • Bidding strategies • Go it alone and argue for a waiver • Gear up for tendering as a sole provider • Gear up for tendering as part of a consortium • Look for larger partners to sub-contract with • All of these constitute high stakes gambles, with greatly increased uncertainty in funding and potential collateral damage. • LAAs mean that there is a strategic choice between specialisation and integration into local service networks neadonconsultingltd

13. Queries • How replicable are these models? • How do SP commissioners see their role in managing the market, and sustaining a competitive pool of providers? • How can CLG/RIEPs promote good practice in commissioning/ procurement? • Will LAAs work in favour of local providers, against unpopular groups, or both? • Will LAAs lead to a longer term downward pressure on costs which will drive out small providers? neadonconsultingltd