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PUBLIC PROCUREMENT25 October 2012 Presented by David Hall & Heather Hodgins
Programme Objective To provide an overview of Public Sector Procurement, To assist in the understanding of what is involved and what is needed to present a creditable submission for a public sector contact.
Business with the: Consumer Private Sector Public Sector DOING BUSINESS
The Public Sector – that part of business activity that is organised and controlled by the government or its agencies on behalf of the nation as a whole
The PUBLIC SECTOR includes Local Authorities GLA, LOCOG, LLDC Central Government NHS Transport (TfL) Emergency Services (Blue Light)
The “PUBLIC SECTOR” includes Housing Associations Colleges & Universities Quangos PPP
PUBLIC EXPENDITURE Approximately 74% of expenditure is Central Government and 26% local government.
Advantages of supplying the Public Sector Large amount of business available(Public Sector £675 billion in 2013) Generally good payers and proper contractual arrangements Chance to get involved in exciting or unusual projects Recession resistant – (to some extent, but not immune) Subject to public procurement legislation Unlikely to go bankrupt Not beholden to cash flow problems Looking to “go local” (Environmental & Local development agenda) Chance of innovative projects Chance to demonstrate flexibility Transparent Subject to statute (e.g. OJEU)
Advantages of supplying PublicSector Cash flow being paid on time Obliged by law to pay within 30 days of receiving a valid invoice, in most cases the council pays before the statutory 30 days Barking & Dagenham– 20 days Waltham Forest – now aiming for 10 days Feedback Under the EU procurement Directives - required to provide feedback If it is requested, even for contracts below the EU threshold Do not have to give any details of competing bids
Disadvantages Risk Cost of process to win work Time to make decisions Different paperwork Poor coordination Unexpected impact of political decisions (Local Authority)
FINANCIAL REGULATIONS The Greater London Authority £0 - 4999 Purchase Order £5000 -14999 Three quotes £15000 - 24999 Three written quotes £25000 – 49999 Mini Tender £50000-£154000 Full Tender £154000 plus EU Tender Greenwich Council £0 – 10,000 One written quote – from approved list/Concordat £10,000 - 25,000 Two written quotes - from approved list/Concordat £ 25,000 -100,000 Three written quotes Over £100,000 Full Tender - Framework agreement £154000 plus EU Tender
Barriers & constraints Not understanding public procurement Not enough experience or track record (references) Policies (the core four plus one) Accreditations & Certifications (e.g. NICEIC, CHAS, Constructionline, ISO, etc.) Financial capacity (not having 2/3 years accounts) Workload capacity Systems & procedures (Sub contractor/supplier evaluation procedures) Processes involved in submissions/bidding are complex and costly Lack resource to submit public sector PQQ’s of tenders How to find out about opportunities The Development of e-procurement
Buyers Objectives Purchasers/procurers are looking for a variety of things (and the criteria will vary) but in simple terms the decision is likely to be in finding a supplier that is: Qualified and capable (meets the requirements) Has relevant experience Provides an acceptable level of risk Providing Value For Money (or Best Value). HM Treasury: Value for money is the combination of whole-life cost and quality to meet the user’s requirement. Has a level of financial soundness.
Important to the Buyer What is important to the Buyer? Better sources of supply Increased competition = lower costs Increased competition = innovation Help to overcome shortages Suppliers with understanding of local issues Also require: Vetted suppliers Supply base which is reflective of local community Opportunity to review and improve
SOME CONSIDERATIONS FOR THE SUPPLIER “READINESS TO SUPPLY” • Awareness of the Supply Chain • Accessing Opportunities • Considering the risk & Addressing the areas of Risk • Assessing capabilities, qualifications and references • Policies and certifications • Presenting your business
PRIORITISING RESOURCES Cost of seeking public sector work. (Direct and Indirect costs) Don’t under estimate the time to prepare your business to be RTS. Certifications. Are they worth it?. (ISO’s, CHAS, SafeContractor, etc.) Policies & Procedures. Developing and maintaining. Consider carefully what you want to “go for” Do you need to consider enhanced staff training? Costs for on-going monitoring/searching for published opportunities When you are submitting, make sure you leave plenty of time. IT requirements? Be prepared for the long haul
Pre-Qualification (1) Demonstrate that your organisation is a creditable potential supplier Experience and capability References, track record Trade membership or quality standards Staff capabilities Capacity Organisation and legalities Appropriate insurance policy documents Certificate of Incorporation Staff structure Staff turnover rate
PRE QUALIFICATION (2) Essential Policies for the Public Sector: • Health & Safety (OHSAS 18001) • Environmental (ISO 14001) • Equalities & Diversity • Quality Assurance (ISO 9001) • Business Continuity (BS25999)
Pre-Qualification (3) Financial status Two/Three Years accounts Bank reference Statement of continued trading Best practice Environmental Awareness Social Responsibility Training Plans Recruitment CRB Checks Resident Communication Systems
SUSTAINABILITY & the ENVIRONMENT • High on the Government agenda • Local Councils wish to ensure that their suppliers are committed to sustaining the environment • Environmental awareness is a “Good selling point” • Opportunities, e.g. CERT • Can you demonstrate your business is environmentally aware? • What positive steps have you taken to manage the impact you business has on the environment. (Materials, Energy, Water) • Have you an Environmental Policy in place? • Have you an Environmental Action Plan & Management System in place? • What does your business proactively do regarding reducing, re-using and re-cycling? • How do you communicate/promote sustainability requirements to your staff? • Have you a waste procedure in place? • Can you confirm that your suppliers have a sustainability culture?
The Move Towards E-procurement Electronic procurement (e - Procurement) is the purchasing of goods and services utilising the Internet. Most large organisations are moving towards greater electronic sourcing, ordering and transactions (e.g. Payment methods). The challenge to SMEs is not just to be online, but to be able to respond to electronic opportunities, invoicing and data interchange.
E-Procurement • Identifying/Finding Opportunities • Responding to Opportunities (Expression of Interest, Prequalification Questionnaires and Invitations To Tender)
Finding Opportunities A website designed to publicise new opportunities within the London 2012 supply chain Originally Funded by the LDA and the Regional Development Agencies (no longer since July 2012) Maximise the economic benefits of the 2012 games There are 125,000 published companies nationally 30,000 businesses registered in London 45% of companies of the 125,000 are published and until you are, you will not get anywhere – you have to publish CompeteFor
Finding Opportunities: e.g. Public sector contracts under £100K, register at www.supply2gov.uk Advertised tenders above EU threshold (c £154K) http://ted.europa.eu (Tenders Electronic Daily “TED”) http://www.villagesupplychain.com/index.php https://www.sell2wales.co.uk/ http://www.govopps.co.uk/ www.pasa.doh.gov.uk/sid/ https://www.in-tendhost.com www.sopo.org.uk www.espo.org www.cbconline.org.uk www.bluelight.gov.uk
Sell yourself within PQQ SME’s have: Lower cost base Innovative Responsiveness Flexibility Quality Specialise Brings greater competition Use your USP’s: Why are you the best Fast response –better service Improved environmental impact Local issues Give the benefits as well as the features of your business Quality of your bid not the service
For example Within geographical area Proportionality References Accounts (number of years) Years of experience Trade accreditations Policies Need to sub contract (high/low) Etc as determined BALANCED SCORE CARD
Don’t participate unless you are totally dedicated to succeed. It is better to decline than give a poor representation of your business. Late submissions. Failure to comply with timetable Spelling mistakes and poor grammar Forgetting to remove previous clients name from submission Not complying with all instructions, (e.g. format, number of copies, etc) Too much waffle and not enough substance. Avoid generic information Failing to ask questions of the buyer if unsure Exaggerating your business offer to succeed. Condemnation of competition Taking success for granted or offering bribes or inducements for work Failing to ask for de-briefs if unsuccessful Busting word limits. CARDINAL SINS- Things to avoid
Accreditations & Certifications Third party accreditation Constructionline the UK's register of pre-qualified local and national construction and construction-related suppliers (DTI funded) - www.constructionline.co.uk Exor - www.exorgroup.co.uk Achilles - www.achilles.com CHAS- SafeContractor
THANK YOU David firstname.lastname@example.org.