Tender Awareness Session 11 th May 2012

1. Tender Awareness Session11th May 2012 Claire SmartDirector Strategic Procurement

2. Agenda 9.00 – 9.30 Registration 9.30 – 10.00 Procurement: An overview of the rules 10.00 – 10.30 Awareness of staffing issues in tendering 10.30 – 11.00 Short listing and PQQ’s 11.00 – 11.20 Break 11.20 – 12.00 Invitations to tender. The contract Miscellaneous 12.00 – 12 .30 Demonstration of the Supplying the South West tender portal 12.30 Close

3. 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

4. Where we advertise • Regional Portal – Supplying the South West • OJEU • Web pages

5. Benefits of the Portalwww.supplyingthesouthwest.org.uk • 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

6. Governments Transparency Agenda

8. When is procurement not procurement? • Commissioning = the alignment of services to meet needs. • May or may NOT include procurement • Grants = Gifts • This is not procurement. • Procurement = buying goods or services from a 3rd party.

9. Market Intelligence • Early market engagement • Shaping existing markets • Creating markets • Market Sounding • Project feasibility • Supplier perspectives • PIN • Supplier assessment (selection and award)

10. Degrees of freedom (when can you get the most help or have the most input) Pre contract investigation / research / market testing Ability to influence outcome Contract advertisement Evaluation Award

11. How much help can we give suppliers / tenderers ? During the tender a formal process must always be followed. Questions must be addressed in the form specified in the tender, normally electronically through the tender portal. Answers will normally be shared with all other tenderers. We normally have no way of changing the process once it is in progress. Our only recourse is to stop and start again.

12. Public Sector Procurement Tendering

13. THE RULES – where do they come from ? • INTERNAL • STANDING ORDERS • ACCOUNTING INSTRUCTIONS • PROCUREMENT GUIDANCE • EXTERNAL • EUROPEAN REGULATIONS • UK LEGISLATION

14. Rules – Internal • 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. • 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.

15. Rules – External (Regulations) • The Public Contracts Regulations 2006 (SI No 5) & The Public Contract (Amendments) Regulations 2009 (SI No 2992), derived from EU Directives • 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 £113,057 - Councils’ threshold is at £173,934 - All “works” thresholds are set at £4,348,350

17. What needs tendering? • 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 • Part A services, as stipulated in the regulations and would include services that could be provided across member states. • Part B services may be excluded from full EU tendering as they have special considerations for a country rather than the EU. e.g.: legal services/personnel placement

18. What already exists ? • If a local contract already exists there is an expectation that the contracted supplier/suppliers would be used. • There may be a framework in place • 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. • Set formats apply for OJEU tenders but often the same sets of forms will be used for local and OJEU tenders.

19. MAX Technical control of goods/ Functional services specifiedPerformance MIN max Time to create min max Performance risk min min Contractors innovations max Outcome Specifications

20. Types of tender process • Open • One stage • Restricted • PQQ (pre-qualification questionnaire) • ITT (Invitation to Tender) • Competitive dialogue • Negotiated

21. Public Sector Procurement Short listing This will only be done on a 2 stage or restricted process

22. Tendering – Pre-qualificationHow to get your details across… • At Pre-Qualification stage each public sector organisation is trying to get details on how a potential supplier operates in general. • The more financially stable the supplier is and, the closer the requirement matches the supplier’s current work, the less risk for the public sector and the more likely the supplier will manage the requirement through the life of the contract period.

23. Why do we shortlist? It’s not compulsory. Short listing 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.

24. What can we shortlist on ? • 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

25. How we shortlist Pre-qualifying questionnaire Ensure suppliers are asked to provide the right information about their capability, capacity and organisational situation Set evaluation criteria Hurdles: i.e. minimum size Graded: i.e. 5 most experienced organisations go through to next stage.

26. Reasons you can be ‘disqualified’ (before the ITT stage) • 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: e.g. security guard with an arson conviction; • Winding up order against supplier • Suspension from trading: e.g. bankruptcy of a director • Legal problems: e.g. patent rights • Found guilty of organised crime, corruption or fraud

27. Public Sector Procurement Evaluation (Invitation to Tender – ITT)

28. Tendering – ITTHow good are you for what we need? • Answer each point as accurately as possible, with sufficient detail to explain each point without wandering off the question. • If you have supporting documentation please add this in where asked to do so, e.g. as appendices. • Send all of your responses back in the format requested and for the time needed. • Where does full cost recovery fit with tendering ?

29. What do we advise companies? • 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.

30. How do we evaluate? • 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

31. Evaluation considerations • 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.

32. Evaluation considerations • Total evaluation The whole evaluation may include a variety of methods – e.g. references, certification/registration (e.g. 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.

33. Reasons you can be ‘excluded’(After submission of bid) • After evaluation of the product or service there is an unacceptable price, delivery or terms (usual evaluation criteria to assess bids) • Improper approaches: e.g. canvassing • If it is subsequently discovered reasons for disqualification that would have disqualified a bidder at the PQQ stage had the information been known.

34. Public Sector Procurement Award, De-brief and Contract

35. 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

36. The process We will notify any supplier and has submitted a bid, successful or otherwise of our 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.

37. Debriefing Available to unsuccessful tenderers Can help supplier 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.

38. The Contract 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.

39. Public Sector Procurement What’s New

40. Changes to EU Procurement • Reconciling part A & B • Thresholds • Toolbox, accelerated procedure • Negotiation • Short listing and ITT • Regulate subcontracting • SME friendly (lots, pre-qualification)

41. Social Value in Public Service Contracts • 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. • Local authorities, when entering into public procurement contracts, to give greater consideration to economic, social or environmental wellbeing during the pre-procurement stage.

42. Dynamic Purchasing Systems • 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.

43. Two forms of consortia 1) Created only by contractual agreement, remains a group of independent suppliers working collaboratively. Needs to establish a lead consortium member, to submit the tender and to contract, on the basis of the collaborative agreement. 2) A more advanced form involves the collaborative group creating a new consortium company, to be operated in accordance with a contractual agreement. Can itself submit a tender.

44. Sustainability Economy Society Environment

45. Sustainable Procurement • 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.” • It’s our responsibility • It makes business sense

46. Environmental Sustainability • Environmental prosecutions • Environmental Policy • Environmental Management Systems • Waste & recycling • Carbon emissions • Energy efficiency

47. Social Sustainability • Apprenticeship Schemes • Working with local colleges • Local sourcing and employment • Monitoring of Supply Chain

48. Economic Sustainability Sustainable business is ever more important Cost benefits Resilience Staff moral Marketing

49. Equalities Implications of the public sector EQUALITY DUTY

50. Implications to GCC and our Contractors • 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.