Bob Moodie NJM European, Economic & Management Consultants Limited

1. Selling to the Public Sector – helping Leicestershire SMEs unlock their potential Bob Moodie NJM European, Economic & Management Consultants Limited

2. Navigating the Public Procurement Maze • The Procurement Context & Process • Identifying tendering opportunities in the local economy • Developing a strategic approach to bidding • Pre-Qualification Questionnaires • Invitations To Tender

3. The Procurement Context & Process

4. The Procurement Context: Regulatory Framework EU Procurement Directives (Competition Policy) Government Strategy Statutory Requirements LA Procedures, Statutory Requirements Local Agreements

5. EU Procurement Thresholds

6. Context: Legal • Regulatory Framework • Search and rescue helicopter service: Privatisation bid process is halted Reason: Preferred supplier, admitted it had access to commercially sensitive information from Department for Transport and Ministry of Defence (MoD).

7. Context: Policies • The Comprehensive Spending Review (2010) • SME Concordat • Equality of Access (SME & Third Sector) • Coalition Government’s aspiration to award 25% of central contracts to SMEs • Leicestershire County Council’s Sustainable Commissioning & Procurement Strategy (2009-13) • % expenditure with SMEs • No. of local SMEs submitting Pre-Qualification Questionnaires to ESPO when expressing an interest in Council requirements • Leicester City Council et al - Selling to the Public Sector: Helping SMEs in Leicester and Leicestershire Win Public Contracts

8. Context: Economics • Price & Value for Money (VfM): VfM is the optimum combination of Cost and Quality - Most Economically Advantageous Tender (MEAT) rather than Lowest Price • Collaborative buying by authorities – purchasing consortia • Rationalisation & Framework Agreements, Contract Bundling • Reduction of public sector in house management overhead and increase in outsourcing • Pressure on contractor margins • Declining markets – big companies going for small contracts

9. Context: Society & Environment • Corporate Social Responsibility • Sustainability & Equality • Innovation & non contractual outcomes (Added Value) • Local Government Act 2000 – Wellbeing Powers • Leicestershire County Council’s Sustainable Commissioning & Procurement Strategy (2009-13) performance measures: • No. of contracts with a Total Value exceeding £1m that include a Social Clause • No. of high risk contracts where environmental considerations are included in the contract award (weighting 15% or more)

10. Context: Technology E-Procurement:Transition from paper based to electronic based systems and processes: • E-Portals • E-tendering • E-auctions • Iprocurement • Purchasing Cards (pCards) • Real time reporting • Payment and Servicing

11. Procurement Procedure

12. Procurement Procedures: The formality of the procedures and process increases in line with the contract value and risk. Lower value contracts • Advertising not essential • Officer discretion • Approved supplier lists • Verbal and Written Quotes common or formal tender process • Easiest to compete and win – harder to find Higher value contracts • Advertised • Formal Tender process only • Essential above EU Thresholds • Framework agreements • Easiest to find – harder to win

13. Identifying Tendering Opportunities in the Local Economy

14. Opportunities: Public Sector • UK Public procurement is estimated at over £175 billion per annum (13% of UK GDP). • Leicestershire County Council spends over £300 million each year on goods, works and services. From 2011-12 to 2014-15, the Council will need to make savings of around £82m, including £22m from commissioning and procurement. • Leicester City Council’s estimated procurement budget for the Authority was £260 million p.a. (2007-2008). From 2011-12 to 2014-15, the Council will need to make savings of around £100m from its total annual budget of circa £1bn. • NHS Leicestershire & Rutland Procurement Partnership influences spend of approximately £250 million on goods and services each year.

15. Opportunities: Public Sector 9 Local Authorities: • Leicestershire County Council • Leicester City Council • North West Leicestershire District Council • Charnwood Borough Council • Melton Borough Council • Blaby District Council • Harborough District Council • Oadby & Wigston Borough Council • Hinckley & Bosworth District Council • 3 Universities: Leicester, Loughborough, De Montfort • 7 FE colleges: Stephenson, Loughborough, Brooksby Melton, North Warwickshire & Hinckley, South Leicestershire, Leicester, Loughborough University School of Art & Design • Schools Other: • NHS (subject to major review) • Housing Associations / RSLs • The Emergency Services

16. Leicestershire County Council Procurement Expenditure (2008-09)

17. Local Procedures

18. Finding Opportunities • Where should you look / who should you know?

19. Contract Notices

20. Finding Opportunities: e-portals • Identify a number of key tender websites • Familiarise yourself with the website format and content • Register and or publish company details • Set up for Alerts service, newsletters etc • Appoint key individual(s) to monitor regularly for new contract opportunities • Apply filters to your search words (decide which opportunities to focus on)

21. Be Systematic & Get Organised • What is your target market? • In your target market who are the key buyers - Personnel at Department level and Procurement Officers (important for low value contracts that are not formally advertised)? • Engage procurement personnel - make sure they know you exist, seed ideas • Find out about approved (accredited) supplier lists however note that authorities are moving towards framework agreements • Register and publish on tender e-portals • Network (buyers/commissioners, meet the buyer events)

22. Be Systematic & Get Organised • Set up internal processes and individual(s) to monitor tender portals, alerts, sources and review feedback • Search for potential business partners / collaborators / subcontractors • Develop / improve your key policies e.g. Make them relevant and articulating business benefit • Accreditation (e.g. CHAS, ISO, IiP etc) • Bid writing is a skill – invest the time in developing the capability

23. Developing a Strategic Approach To bid or not to bid?

24. Strategic Decision Making • Is the tender a good fit in relation to your company’s activities? • Can you meet the eligibility criteria (technical qualifications, policy compliance e.g. Quality Assurance, Insurance) ? • Do you have a good track record in relation to the opportunity? • Do you have the trading history (e.g. 2 years Accounts)? • Do you have the capability and capacity to deliver the contract if successful? • Can you make sense of the budget and can you deliver the contract on time?

25. Strategic Decision Making • What are the risks? • Who are your competitors? • What percentage of your turnover does the contract represent? • Do you need a partner(s) or will you use subcontractors? • What is the percentage chance of success? • Do you have the time and resources to devote to preparing a good bid?

26. Strategic Decision Making Solo or Collaborative Bidding? • Form a consortium if: • You don’t have the capability or capacity • You can’t meet the 20% rule • Options: • Consortium • Joint Bidding • Lead Contractor & Subcontractor • Legal basics – will you be jointly and severally liable? • Memorandum of understanding (MoU) / Partnership agreement / (Non Disclosure agreement (NDA); Agreement not to compete in other tender) • Service level agreement (SLA)/contract • NB. consortium should be properly led, constructed and managed

27. Consortia

28. Converting Opportunities Pre-Qualification Questionnaires (PQQs) & Invitations To Tender (ITT)

29. Procurement Process Overview Procure Contract Notice EOI PQQ Tender Commission Manage Evaluate Review Award

30. Procedures Pre Qualification Questionnaire (PQQ): • Evaluation of organisation • Are you safe and appropriate choice? • Compliance • Past performance / track record • Selection criteria (short-listing) Invitation to Tender Stage (ITT): • Evaluation of bids • Your service / product / works offer • Future performance • Award criteria

31. Get Bid Ready: Preparing the Documents • Make note of instructions, word limits and submission format • Try to understand what each question is asking and why they are being asked. Be compliant! • Note the scoring / weighting of criteria and spend time / effort on your response accordingly • Make careful note of the deadline and make sure you submit well in advance of the deadline (avoid last minute submissions) • Anything you are not sure of, contact the buyer (but be aware that any question you ask will be notified to other suppliers) • Answer all questions honestly and be keen and positive in your responses (emphasise your USP). • Double check your response / second pair of eyes • Ensure you complete and submit all the documents required

32. PQQ Information General Business Information • Business Details • Status (Sole contractor / consortium) • Ownership • Business Probity • Professional Conduct Documentation required may include: • Company History • HR Information • Administrative Information (Company Registration/VAT Number) • Quality Standards Accreditation / Certificates

33. PQQ Information Financial & Insurance Information: • Turnover • Accounts • Insurance Documentation Required may include: • Audited accounts, Management accounts, Parent company accounts • Bankers statements & accountants’ references • Financial projections, including cashflow forecasts • Details of previous contracts and values • Capital availability • Certification of Incorporation, Certificate of Name Change • Insurance Certificates NB financial vetting is based on sound business judgement and not just the application of financial formulae

34. PQQ Information Business Activities, Track Record, References • Business Activities • HR Information (FTEs / Training Records / CVs) • Referee Contact Details for recent contracts • Relevant Contract Performance • Subcontractors • Capability Statements • Case Studies • References (norm = 3 recent referees) • NB Make sure information supplied is relevant to PQQ & Tender Specification

35. PQQ Information Essential Policies: • Quality Management • Equality & Diversity • Health & Safety • Environment Management & Sustainability Others Policies: • Business Ethics • Corporate Social Responsibility • Business Continuity • Sub Contracting PQQ may require you to supply: specific responses, outline of strategy, copy of statements, copy of certifications etc

36. PQQ Evaluation PQQ will be evaluated to select potential suppliers to invite to tender. Based on: • Business Probity • Technical Capability and Capacity • Financial Information • Contract Compliance • Policy Conformity NB: Evaluation includes: • Pass / Fail criteria • Financial risk based assessment • Criteria have different scores with weightings

37. PQQ: Example Scoring Framework

38. Example ‘Scoring’ Criteria

39. Invitation To Tender (ITT)

40. ITT Information • If you are shortlisted from the PQQ or for the Open Tender procedure • Invitation to Tender documents will normally identify the information required and how to structure your response. • The areas covered are usually as follows: • What are you going to do • How are you going to do it • How much will it cost • Who is going to do it • What is your track record / prior experience • Compliance • References

41. ITT Information Invitation to Tender (ITT) pack will include: • Instructions to Tenderers • Introduction from buyer who will set out the vision • The Specification • The Evaluation Criteria & Relative Weighting • Form of Tender • Draft Contract Terms and Conditions • Declarations / Bona Fide • Pricing Schedule

42. Preparing the Tender • Get your team together, appoint a bid manager and conduct detailed review and interpretation of tender requirements. • Determine whether you require clarification of any aspect of the tender and ask the question(s) allowing enough time for a response. • Check regularly to see if any questions/answers have been submitted by competitors. Be aware that any question you ask will be notified to other suppliers) • Prepare work plan & allocation of roles/tasks/milestones with reference to tender & submission deadline. • NB: Build in time to review, refine and style bid

43. Preparing the Tender What is the Buyer looking for? • Demonstrate a clear understanding of the brief (i.e. the challenges are understood and addressed) • Design a clearly structured tender response aligned against each tender requirement and criteria (e.g. core, gateway and specific). Ensure compliance! • Methodology: clearly show who does what, why, when, how and benefits from buyer’s perspective). • Identify and demonstrate clearly your capability and the innovation of your offer (USP) - can your offer exceed the contract requirements and provide additional benefits, outcomes?

44. Preparing the Tender Standing Out from the Crowd • Have you articulated ‘Why choose us?’ • Have you fully defined the key features, quality and benefits of your approach? • Have you used and made the most of recent and relevant case studies to illustrate your track record? • Have you gone the extra mile in manifesting your understanding of the brief and the design of your solution? • Conduct a mock assessment against the evaluation criteria and relative weighting

45. SMEs: Make a virtue of your size • Lower Cost Base • Innovation • Proximity to client or service point & responsiveness • Flexibility • Consistency of service and personnel • Specialist and Local Knowledge • Commitment to Sustainable procurement (Investing in Local Supply Chain) • Corporate Social Responsibility (Community Investment & Involvement)

46. Preparing the Tender Costing Your Proposal • Personnel & Tasks • Charging Rate(s) (Daily/Hourly) & Time • Fixed Cost / Variable Cost • Expenses & Disbursements • Contingency • VAT • Innovative Cost Proposals • Discounted Cost e.g. 5% early payment, economies of scale and efficiency savings linked to contract term and/or number of contracts (Lots) awarded • Buyer comfort: Offer 10% Contract Price Withheld until completion

47. Preparing the TenderDo’s & Don’ts • Do not attempt to find an “inside track” (canvassing) • Respond by the correct date + time (electronic, electronic + post, post?) avoid last minute submissions • Ensure the submission is complete AND signed including copies of requested documentation, e.g. insurance certificates, policies, audited accounts etc • Use tender envelope/label if provided and check if there is a tender reference • Look carefully at the evaluation criteria, scores and “weighting”. This should influence time and effort in preparation of answers

48. Preparing the TenderBid Writing Language & Style: • Write in plain English • Avoid jargon and unexplained abbreviations • Use ‘active’ and not ‘passive‘ verbs, refer to ‘we’ and ‘you’ • In your response try to reflect key wording as found in the tender specification • Short sentences and paragraphs; use introductory headers • Punctuation and spelling really matter Aim for clarity, brevity, readability and persuasion

49. Avoiding a Poor Score Common reasons for a poor score: • Failure to follow the instructions. • Writing by committee, no narrative flow and lack of control/ownership • Incomplete or missing answers/sections. • Supporting documentation incomplete • Repeating answers or referring to ‘see above’ (questions are rarely repeated) • Over emphasising what you sell, rather than what they are looking to buy • Recycling old tenders ‘Cutting & pasting’! • Generic PQQ/Tender response • Providing response on general capability instead as opposed to specific contract requirements.

50. Buyer Preferences