How to secure Public Sector Contracts

18th September 2013

• Introduction to the buyers • The public procurement context and

opportunity• Business Perspective – Your Views on

securing public sector business • Smarter tendering – Tips for securing that

contract – Q & A • Existing Support – Social Enterprise

Network• Meet the Buyer – An opportunity for

networking

The agenda for today

The Buying Organisations

• Derby City Council – Ray Poxon

• Derby Homes – Tony Billingham

• Erewash Borough Council – Howard Lane

• Derby University – Andy Brown

www.derby.ac.uk

Procurement at The University of Derby

www.derby.ac.uk

www.derby.ac.uk

Andy Brown Head of Procurement 01332-592400a.brown4@derby.ac.uk

Jane Brailsford Senior Procurement Officer 01332- 592401 j.brailsford@derby.ac.uk

PROCUREMENT CONTACTS

www.derby.ac.uk

Key Facts and Contacts

Annual Non Pay spend of approximately £40M 50% of supply base within the Midlands Procurement Team set the framework and manage all high value tenders Departments order own items

Key Departments: Information Technology Services - Neil Williams Director of IT Services Estates Management -Ian Willgoose Director of Estates Halls of Residence – Mark Travers Operations Director

Key Commodities

IT Hardware – servers, desktops and laptops, audio visual equipment, networking equipment, storage, consumables, telecommunications.

IT Software – vast range of enterprise level and bespoke software Estates items – building maintenance, cleaning services and consumables,

building consumables, ironmongery, electrical, plumbing, office and classroom furniture.

Estates Development – professional services, demolition, refurbishment works, interior fit out, new build.

Halls of Residence – refurbishment works, building maintenance, mechanical and electrical, residential furniture.

www.derby.ac.uk

How the University Buys

Tendering via University of Derby intend site https://in-tendhost.co.uk/derby/aspx/Home look at recent tenders list.

Via National Government Framework Government Procurement Service.

Via University Frameworks North Eastern Universities Purchasing Consortia NEUPC http://www.neupc.ac.uk/ and other national frameworks

www.derby.ac.uk

Current and Future Tenders

Current – CCTV, automatic door and barrier maintenance. occupational health,

Future Tenders - Frameworks for professional services and construction activities, student travel

promotional products, smartcard technology.

www.derby.ac.uk

Context Policies and Objectives

DCC Objectives:

A thriving sustainable economy People achieving their learning potential A skilled and motivated workforce

Other authorities have similar objectives

DCC

40% contracts Derbyshire 65% East Midlands 39% suppliers Derbyshire 52% East Midlands

DCC’s aim is to increase these numbers but we must remain compliant and achieve VFM. Suppliers need to play their part.

Context Economics

Need to balance the above with the benefits of sourcing locally.

Severe public sector budget cuts and spending pressures

Most Economically Advantageous Tender (MEAT) rather than Lowest Price

Collaborative buying by authorities – purchasing consortia

Rationalisation & Framework Agreements, Contract Bundling

Price & Value for Money (VfM) VfM is the optimum combination of cost, quality and fitness for purpose to meet the buyer’s requirements

Reduction of public sector in-house management; overheads, potential for increased outsourcing

Context

Technology

E-Procurement: Public sector bodies are increasingly using electronic based procurement systems and processes: E-Portals E-tendering E-auctions Purchasing (VISA) Cards (pCards) E-contract management and reporting

Context Procurement rules

ContextPublic Procurement regulations

Public procurement regulations apply to all public sector contracts with specific rules for those over set values, or 'thresholds‘

£173,934 for Goods and Services £4,348,350 for Works

The Regulations are designed to ensure free and fair access to, and competition for, public sector contracts. They set down procedures and standards for choosing tenderers and awarding contracts.

All procurement activity must demonstrate transparency, equal treatment and be non discriminatory

Mandatory minimum timescales for procurement process. Potential penalties for the Council for non compliance Public Service (Social Value) Act

We cannot discriminate in favour of local suppliers

Context Internal Rules

Each organisation has its own rules

The formality of procedures increases in line with the contract value and risk (DCC):

DCC may also procure via frameworks, inc those awarded by other public sector bodies e.g. Government Procurement Service, ESPO, and other Local authorities:

http://gps.cabinetoffice.gov.uk/ http://www.espo.org/Value Process

Under £5,000 Budget holder decision

£5,000 to £30,000 Minimum 3 Quotes (at least one local)

£30,000 - EU threshold Tenders to be sought via open advertisement - Source Derbyshire

Over EU Thresholds EU tender processSource Derbyshire & OJEU (http://ted.europa.eu/TED/main/HomePage.do)

Procurement Process Overview

ProcureContract Notice

EOI

Tender

EvaluateManageReview

Commissioning

PQQ

Award

Procedures

Process Description

Quotation A less formal process for below £30,000

Open Single stage process. All bidders submit a priced tender

Restricted Two stage process:

(1) Pre-qualification questionnaire (PQQ) to select tender shortlist

(2) Invitation to Tender (ITT) to shortlisted bidders – priced tender required.

Use of framework Further competition from the ‘panel’ of suppliers

Competitive Dialogue Rarely used

Completing the paperwork

1. Pre-qualification stage - Evaluation of your organisation

Finances, Insurance, Previous Experience / past performance, References, Quality, Equality and Sustainability

These are selection criteria

2. Invitation to Tender Stage - Evaluation of the bids

State how your proposal meets our current and future requirements

These are award criteria. Buyer will state the criteria and weightings

Public Sector opportunitiesDerbyshire

Local Authorities Derbyshire County Council Derby City Council 8 District Councils

Housing Associations

Education University and FE Colleges Schools

Emergency Services NHS

Business Perspective

• Finding the opportunities• Don’t know where they are advertised• Don’t have contact details for buyers

• Limited bid writing capability and time to complete• Don’t understand the documents / clauses /

requirements• Don’t know how to complete the tender• Unclear tender questions and instructions• Lowest Price chosen every time

Your views on barriers to securing public sector business (1)

Business Perspective

• Your views on barriers to securing public sector business (2)

• No local weighting or acknowledgement for current local delivery and known track record

• Contracts are seemingly being awarded to organisations out of the City

• Nothing prior to opportunities being announced for local organisations to be clear about what the opportunity is and what the Local Authority are looking for

• Certain parts of the City Council do not work within an integrated commissioning ethos

• Given that local providers are consistently being unsuccessful in gaining public sector contracts, nothing is being done with local providers about putting good tenders together.

Business Perspective

• Inability to deliver all the activities and outcomes required

• Not able to meet ‘unnecessary’ PQQ criteria• Having to fill in PQQ for every tender• Lots are often too large for SMEs• Long term frameworks used• Too many large companies bidding for smaller jobs• Lack of previous public sector experience• Lack of ISO accreditation• Unrealistic cost expectations

Your views on barriers to securing public sector business (3)

Addressing the Barriers

Top Tips for Securing the Contract

Howard Lane

Be Prepared

Identify potential public sector customers Many publish Contracts registers or forward

procurement plans on their website Attend ‘meet the Buyer’ events

Review contract award notices to identify sub-contract opportunities

e.g. DCC has outsourced its IT function so doesn’t buy PCs directly but via the contractor.

Be PreparedFind and register with Sources of opportunities in advance:

Be Prepared

Create a “Go / No go” matrix as emotions often run high, so determine beforehand if the opportunity really is suitable

Download / print off ALL PQQ / tender documents and read them carefully:

Is the specification relevant to your business activities? Do you have a track record in the area? What % of turnover does the contract represent – 30% rule? What are the risks, who are your competitors and what is the % chance of

success? Is there an incumbent? Can you answer each question with the information required? Do you have the supporting documentation in place for compliance? Can you make commercial sense of the advertised contract value? Do you have the in-house resources to deliver – do you need partners /

subcontractors? Do you have the time / resources to prepare the bid by the deadline?

Be Prepared

Be ready to tender – Prepare: Financial information – Accounts, Insurance, Check

credit rating Policies – Quality Management, Equality and

Diversity, Health and Safety, Environmental Management

Business activity statement / Unique Selling points (USP)

Referee Contact details for recent contracts Subcontractors Case studies / examples of work

Preparing a response

The scores on the doors……………

Before you even consider responding to a tender have a look at the evaluation criteria:

Can you meet the Pass/Fail criteria? Prioritise the sections with the highest weighting Ensure you answer all the questions – Don’t assume

the buyer has prior knowledge of your organisation

Preparing a response

Get the right people involved If you need to collaborate with other

organisations, prepare in advance

Consider having a regular review of tenders pending, tenders in progress and tenders submitted

Consider accreditation (eg. Constructionline, CHAS, ISO, IiP etc.)

Preparing a response

Understand the rules and timelines… Understand the process for each tender Word limit Presentation

Font size Use of colour Hard copy, soft copy or both Use tender envelope / label if provided Adhere to the timelines given – Avoid last minute

submissions Late tenders won’t be accepted

Preparing a response

Understand the requirement, if in doubt ASK

Buyers will circulate clarifications to all bidders so check correspondence regularly

Don’t assume the buyer wants the ‘same as last time’

Don’t price for a ‘Rolls Royce’ service when a ‘Mondeo’ has been specified

Budgets are tighter than ever before Bid for the specified requirement and if there are

opportunities for efficiency or alternative solutions which offer a benefit offer these as an option.

Preparing a response

Ensure that all information explicitly requested is provided Refer to the actual question e.g. Q3.1.2 Where appropriate, add well referenced appendices Read and interpret the tender carefully and address the

implied issues Avoid ‘cut and paste’ Double check that all attachments are included and

documents signed where necessary

Preparing a response: Buyer Preferences

Opportunities for learning

• Free On-line ‘Learn Direct’ Course Winning the Contract

Free! Would you like to win public sector business contracts? This course provides an introduction to the public sector, explains the procurement process and offers practical advice to help you identify new business opportunities

http://www1.learndirect-business.com/business-courses/winning-the-contract/

Local suppliers

Being local on its own is not an advantage. But stress the potential

benefits:

Less distance to travel (carbon impact?) Quicker response time (better service

offering?) More flexible (change your order....) Lower overheads Understand local issues/communities Local supply chains

After the award notification

Request feedback

even if you won the tender there may still be room for improvement;

If you didn’t win, make sure you learn why.

Keep on selling

Use your usual sales techniquesPhone and ask

Build networksPhone and ask

Send carefully targeted, concise informationPhone and ask

Be brief, be focused, be reasonablePhone and ask

Remember you are one of many!

A Successful supplier will be……..

Compliant Tender Format & Requirements Policies, Insurances, etc.

Persuasive USP – Unique Selling Point Added Value and/or Innovation Competitive Quality Price

Business Perspective – Have we provided the answers?

Finding the opportunities Don’t know where they are advertised - YES Don’t have contact details for buyers - Meet them later

Limited bid writing capability & time to complete – Plan ahead Don’t understand the documents / clauses / requirements - ASK Don’t know how to complete the tender – ASK DNCC / FSB / CA Unclear tender questions and instructions – ASK the buyer Lowest Price chosen every time – NO – MEAT chosen

Business Perspective – Your Views on barriers to securing public sector business Continued 2

No local weighting or acknowledgement for current local delivery and known track record – Local bias not legal – track record is scored

Contracts are seemingly being awarded to organisations out of the City – 40% awarded to Derbyshire organisations

Nothing prior to opportunities being announced for local organisations to be clear about what the opportunity is and what the Local Authority are looking for – Buyers to note

Certain parts of the City Council do not work within an integrated commissioning ethos – More information needed to respond

Given that local providers are consistently being unsuccessful in gaining public sector contracts, nothing is being done with local providers about putting good tenders together. Todays event?

Business Perceptions – Your Views on barriers to securing public sector business (continued)

Inability to deliver all the activities and outcomes required – Form consortium to bid?

Not able to meet ‘unnecessary’ PQQ criteria – Query before submission date but remember buyer must protect against risks

Having to fill in PQQ for every tender – East Midlands standardised PQQ

Lots are often too large for SMEs – Buyers to note – Suppliers to form consortium? Highways example

Long term frameworks used – buyers to note – suppliers to consider bidding for frameworks

Too many large companies bidding for smaller jobs – tenders are open to all

Lack of previous public sector experience – stress relevant experience

Lack of ISO accreditation – not always essential

Unrealistic cost expectations – review cost model and bid accordingly

Existing Support

Helen Carter – DNCC

Tenders Alert serviceBusiness Advice Website D2N2 LEPSource Derbyshire

Existing Support

Matt Allbones - Community Action

Social Enterprise Network project

This ERDF funded project supports individuals, groups and organisations to be:

Less grant-reliant Tender ready Sustainable

Through: Effective support, guidance and mentoring Network events Sharing Services Bulk purchasing opportunities Consortia development

Close of formal session

George Cowcher - DNCC

Please now take the opportunity to ‘Meet the buyers’