Paying attention to EU procurement rules so you don’t have to

The Cabinet Office has released a Procurement Policy Note (PPN) discussing the latest results of negotiations in Brussels about changing the procurement rules which ultimately define public sector tenders. These EU rules can be a bit obscure and so it is interesting to get a window into the process and progress of these discussions.

There are a few specific areas of interest to bid writers within the document.

Reducing minimum timescales

The government has supported proposals to reduce the minimum timescales for responding to advertised procurements and preparing tender documents. So far a reduction from 40 to 35 days has been agreed upon, under the open procedure.

Increasing the use of self-declarations

Regular readers of this blog will have seen several articles about government initiatives (not to mention scandals and complaints from business) surrounding the length and requirements of public sector tender PQQ documents. The latest response is to increase the use of self-declarations, whereby only the winning bidder must submit documents and certificates proving their status, while self-declarations of compliance must be accepted by the procurement officers up to that point. This will be a welcome change for SMEs and smaller bidders, if it isn’t open to abuse.

Financial Requirements for SMEs

The Cabinet Office has continued to argue that SME business should be encouraged by breaking large bids into lots, at the discretion of the purchasing authority. It also wants to reduce the turnover requirements relative to contract size. Together with proposals in favour of “innovative public service delivery-agents” such as employee owned “mutual”, these are further moves in favour of diversifying the pool of bidders from which governments and public sector purchasing authorities draw their contracts.

The final results of these discussions will probably be adopted in early 2013. Win that Bid can help bid writers keep up to date with the latest public sector tender developments.

Qualifying the Bid

The G4S debacle we discussed in the last post raised a big issue for bid writers: how to qualify your bid. Is that astonishing £300 million tender opportunity going to turn into a real disaster for your company? Less melodramatically, are your bid writers going to waste weeks of sleepless nights filling out PQQs trying to win a bid you weren’t ever going to win?

Don’t go for every bid

Setting aside an apparent opportunity isn’t the same as wasting one. Trying to win a tender opportunity means putting in an enormous investment in time and energy. Much better to put that effort into a quality proposal than spreading it across dozens of failed prospects.

Before you choose which bids to aim for, read the tender contracts in detail and consider:

  • Are you qualified for the bid? Do you have the right accreditation, the right resources, the right documentation to get through the PQQ? More to the point, can you demonstrate that to the procurer?
  • Is the bid right for your business? Can you demonstrate prior work for clients in the same sector?
  • Do you understand the bid requirements? That unclear pricing structure could really hurt you after the contract is won, as happened to G4S!
  • Who is the buyer? Do you have a relationship with them? Will you be able to establish a dialogue with them? Will they ask you to provide five times the number of personnel you were contracted for at the last minute, and do you have contingency plans if they do?
  • Who are your competitors? Can your bid writers demonstrate why it is that your company will be a better choice?

Get some sleep!

The answers to those questions aren’t always as obvious as they sound, particularly in tender contracts with long or arcane PQQs. Win that Bid has a lot of experience in helping people to get those winning contracts, but also in avoiding two of the great curses of bid writing: wasting time on failed bids, or winning bids that the company was never suitable for in the first place.

How will the Public Services (Social Value) Act 2012 change your bid?

There have been some recent changes in the way that public bodies can take social considerations into account when procuring public contracts. The new Public Services (Social Value) Act 2012 aims to clarify the issue a bit.

The Act (applied to public service contracts) creates a statutory requirement for public authorities to have regard to economic, social and environmental well-being in connection with public services contracts and for connected purposes. However, the Act also states that these decisions must also be directly relevant to what is being produced in the first place. This is roughly equivalent to what the EU procurement regime already allowed for.

From the bid writer’s point of view, the main thing is to look at where the question of Social Value will come up in the tender writing process:

Before the public sector tender is issued: the contracting authority will try to identify non-commercial, social value considerations before they commence the procurement process. This will have a big impact on the technical specifications of the project that a bid writer should take into account.

In the terms of the Contract: if the contracting authority does decide it wants to place emphasis on a particular social need, it might include “special” conditions.

The selection stage: the contracting authority could well reject applicants who don’t meet the non-commercial needs of the contract. Bid writers should make sure that their bid meets those requirement.  For instance, the contracting authority might want to fulfil an environmental consideration and choose a company with a proven record in that area.

The Act states that the selection criteria must be non-discriminatory, proportionate and linked to the subject matter.

Need help writing a public sector tender? Contact one of our team today on 0203405 1850 and we can help.

New procurement rules in Scotland

The Sustainable Procurement Bill passing through the Scottish Parliament aims to open up new public sector opportunities by making the public sector tender process more standardised and transparent.

Complaints in the construction industry were a major driving force behind this bill. Industry leaders have been complaining that the existing construction tender rules were unfit for purpose and exacerbating the decline of the sector.

The Scottish government claims that the Sustainable Procurement Bill would ensure that:

  • contract opportunities are advertised or awarded through Public Contracts Scotland;
  • public bodies adopt streamlined procurement processes friendly to Scottish businesses;
  • smaller and medium companies have more opportunities to win public sector tenders.

Alex Neil (MSP) also emphasised that community benefit clauses will be an important part of the new procurement rules. He stated that the “bill will seek to ensure that major public contracts deliver training and employment opportunities”.

If it passes this bill will obviously offer advantages to Scottish businesses aiming for construction tenders. However, the simpler public sector tender processes ought to make it easier for other companies as well, especially those that emphasise their CSR and training programmes.

Have you been paid yet?

Recently an alliance of small business lobbying groups sent a letter to the Business Minister Mark Prisk, highlighting one of the biggest problems facing companies tendering for contracts in the UK today: late payment.

The numbers present a clear picture of the both the scale of the problem and who the mostly likely perpetrators are.

  • Large companies are responsible for 48% of late payments and account for most of the £24 billion owed to small and medium suppliers in the UK.
  • Late payments for UK Government tenders or charity work constitute just 9%, less than public/private concerns.
  • Both the public and the third sector have improved their record in recent years .
  • Prominent excuses given include a lack of payment authorisation and reports that the “cheque is in the post”.

Encouraging Prompt Payment?

Businesses can be scared to “name and shame” large corporations who mess around with their tender contracts, despite the fact that late payments break businesses. In these circumstances, it can be difficult to know exactly who to complain to. A poor UK government tender PQQ structure can be flagged up for the Cabinet Office to look into, but what about a multinational?

You could try encouraging prompt payment by the tender issuer. The letter to the Business Minister suggested a clampdown on “prompt payment discounts”, a strategy in which suppliers offer discounts on products in exchange for guarantees of payment on time. Several business advice websites suggest doing just that to incentivise punctual payments for commercial tenders. A company considering this should ask themselves whether they want to be paying the buyer extra to do what they claimed they were going to do on the tender contracts.

What can businesses do?

The best answer – and unfortunately the most complex to implement – is to make your business more resilient in times of unexpected cash flow problems relating to late payment. We can help you transform the capabilities of your business. Firstly, it’s important to consider how many sources of income the company has. It is dangerous for a company to rely on just one major contract or tender.  Another important safeguard to pursue is a high credit score. Being transparent about the financial state of the company can be helpful in other aspects of winning bids, especially for new companies who may not be able to provide the several years of financial data requested by most UK government tender PQQs. Win that Bid’s Bid Management service can help you assemble the right documents.

Don’t let yourself get pushed around.

Companies should also research the organisation issuing the tender. The sources of information aren’t always immediately obvious. This is an area in which a consultancy like Win that Bid can really help you in assessing whether to pursue an opportunity. Carrying out credit checks on potential customers is a good start. Communication between the supplier and the customer is always important: You should be clear about what the payment terms of the tender contract are and request clarification if they aren’t clear. And if the customer does try to change the terms of the contract, a supplier should make it clear that it expects something in return.

How to Find Tenders

People often ask us how to find tenders for their business.  There are hundreds of portals in the UK – some generalist, some specialist.  Some charge a membership fee and others are free.  This article sets out a few ways to find yourself some great tendering opportunities.

Contracts Finder
Contracts Finder is a free new service for businesses, government buyers and the public. This service comes from the Government and you can find:

· live contract opportunities

· closed tender documentation

· contract awards and contract documents

TED (Tenders Electronic Daily)
TED is the online version of the ‘Supplement to the Official Journal of the European Union (OJEU)’, dedicated to European public procurement. Public procurement in the UK and European Union is governed by a number of Directives and Regulations and all tender opportunities above a certain monetary threshold must be published in the OJEU. TED provides free access to business opportunities. It is updated five times a week with approximately 1500 public procurement notices from the European Union, the European Economic Area and beyond. Register on the TED website for free to get started.

Where to find Global Sporting Opportunities

Where to find Local Authority opportunities

It is worth finding out how your local authorities manage their tenders however we find that in the majority they use their own online portals, advertise in local papers and/or use an external company like Exor to manage their preferred supplier database.

Central Government

Try these for size

NHS

The Department of Health is divided into a number of business units for purchasing purposes, each with their own budgets.  We have selected a few ways to monitor different tendering and business opportunities

Specialist

Each sector often has its own specialist portals and we have put together a list of some of them

What do you think of our How to Find Tenders list – have you got a favourite to add?

Questions to ask yourself before starting down the Tender Writing route

When about to embark on the long journey towards winning a tender, we think that these questions are important discussion points for your team.  Even if you think that the PQQ is quick to complete, this is only the tip of the iceberg.  To ensure that you are in the best position to win your next tender or proposal you must ask yourself these questions before beginning the tender writing process:
Can my company exactly match the buyer’s needs?
  • You may look at a contract and think that your company can do most of the work but if there are areas that it cannot manage, your chances of qualifying or winning are seriously reduced.
  • Limiting areas include specification, geographical location and coverage, mandatory accreditations etc.
  • Is the contract the right size for my business?
  • You shouldn’t bid if the contract value is more than 25% of your turnover. Buyers will be checking that the tender contract value does not exceed 20-30% of the tendering company’s turnover to be sure the contract value will not be too much for the company to handle.
  • The size of your company dictates the maximum size of contract it is likely to win.
Can I show relevant experience?
  • Buyers like suppliers who can prove they can do the job, therefore references from similar organisations for similar work are ideal.
  • If you haven’t got these, you will need to show you have ‘transferable skills’ from customers with similar needs.
  • If the work you are bidding for is not a ‘core competence’ (i.e. it represents only a small element of your company’s overall turnover) it can reduce your chances of success.
Has my company got sufficient trading history?
  • Public sector buyers generally ask for (audited) accounts from the last 3 years (although sometimes 2 years is enough). This means that start-ups are not always in the best position to win bids.
  • Has the business seen year on year growth and if not is there a valid explanation for why not?
Has my company got enough time and expertise spare?
  • Will this project clash with any existing or upcoming work?
  • Tender writing is time consuming – you will need to invest a significant amount of your time and resources to create a winning bid
  • Tendering can also be a daunting task, especially if you do not have the right skills or expertise readily available
Is it a Framework Agreement?
  • If it is, how likely are you to get work that will make your application worth it?
  • Will I have to subcontract?
  • If you do, are you sure that this is the kind of work you want?
  • How will the subcontracting part or parts of the contract be viewed by the client?
  • Can you demonstrate supply chain quality assurance is achieved?
  • What is your subcontractor recruitment policy?
  • Is there an effective management process for subcontractors?

If you are still not sure and need help with your tender writing then do call us on 0203 405 1850 to help you evaluate your next big opportunity.