Procurement Landscape

The VFM Agenda

Gary Amos

Head of Procurement

Salford City Council

The Northwest

3 COUNTY

4 UNITARY

15 METROPOLITAN

24 DISTRICT

1 NATIONAL PARK

Annual revenue spend: £17 billion +

% Of Spend With North West Suppliers: 70%

• 25% of spend with suppliers who supply more than 1 council

• 25% of spend within Local Authority boundary

ConstructionSocial Care

Local Authorities aren’t . . .

Three Aspects:

1. Finance

2. Drivers

3. Modernisation

Finance

• Emergency Budget– Restricted spend– Tighter controls– Whole life costing

• Collaboration between authorities

• Joint service delivery

• Drive towards aggregation vs. ‘small is beautiful’

Drivers

• Local economy• Community benefit• Environmental issues• Sustainability• EFFICIENCY

Modernisation

• The big ‘e’

• The Chest (https://www.thechest.nwce.gov.uk/cms/cms.nsf/vHomePage/fSection?OpenDocument)

• Supplier development

• Co-ordination

Summary

• Reduced costs• More controlled, co-ordinated approach to

procurement• Easier routes to information• Easier contact with the buyers• Co-operation, not confrontation• Work with suppliers

An appeal from Buyers everywhere:

• Be on time

• Read the specification

• Provide the information as requested

• Complete the tender / quotation document!

• Be on time!

HOW TO BID AND TENDER

Linda Mickleburgh

Managing Business Opportunities Ltd

07771 734107

WHY WORK WITH THE PUBLIC SECTOR

• Spend budgets set in advance

• Good payers

• Agreed requirements

• Huge spend = huge potential market

PUBLIC SECTOR SPENDING

• Europe - €1500 billion pa• UK - £175 billion pa• Local Government £27 billion• Estimated 800,000 suppliers

– high % SME’s

NORTH WEST LOCAL AUTHORITY SPENDING

£6 – 6.5 BILLION ish

WHATS THE PUBLIC SECTOR

• Bodies Governed by public law & procurement rules• EU Institutions• Central Government Departments and Agencies• Armed Forces• Police Service & Prisons• Local Authorities• Universities and Colleges• NHS• Certain Utility Companies - Water, Energy, Transport &

Telecommunications Sectors• Other Quangos……

REGIONAL/LOCAL PUBLIC AUTHORITIES

• Regional Development Agency• Over 40 Local Authorities• Local Education Authorities• Universities• Schools

WHAT PUBLIC SECTOR BUYS

• Works:– Buildings - Roads– Infrastructure

• Supplies– Stationery - Furniture– Clothing - Surgical Equipment– Computers

• Services– Cleaning - Chauffeurs– Catering - Insurance– Legal - Professional Advice/Consultancy– Recruitment - Gardening

WHAT CAN SMALL FIRMS OFFER

• Greater competition

• Lower Costs

• New Ideas

• Responsiveness

• Flexibility

• Quality of Service

• Specialisation

FIRST STEPS - DECIDE

• What you deliver?

• Who to?

• Size of contract?

• Geography of delivery?

• Know your supply chain? (how extensive is it? Its limitations?)

• What are your Unique Selling Points?

• IF YOU HAVE NOT DECIDED, HOW CAN YOU SELL?

WHERE TO FIND OPPORTUNITIES

• Local, Regional, National Newspapers & Trade Magazines

• Networking events

• Join Central & Local Government supplier lists/catalogue

• Local Authority/other agency websites • Register on e-portals

NEWSPAPERS AND MAGAZINES

• Your not just looking for tenders advertised

• What is on the horizon

• What is about to happen

• Changes to buying organisation structures

NETWORKING EVENTS

• Do I need to cover this – your all here

• People buy people first

• Keep your company in peoples minds

• Find out what’s about to happen

• Pick up contacts

APPROVED SUPPLIER LISTS

• Some Authorities utilise lists of potential suppliers

• No cost to register• Often a Pre-qualification process• Rotating lists often utilised• No guarantee of work• Once on list, keep on selling

NORTH WEST AUTHORITIES CHEST

www.thechest.nwce.gov.uk

• Online Business Portal• Single point of contact for NW councils contract

opportunities (50% councils post opportunities on this site)

• Automatic notification of tender opportunities• Buyers can see prospective supplier details• E-procurement process• Available 24/7 • COMPLETELY FREE

NATIONAL, REGIONAL & LOCAL OPPORTUNITIESwww.supply2.gov.uk

• Free to register for a quick and easy way to access lower-value public sector contract opportunities in your local area e.g. Greater Manchester

• Lists Procurement events• Provides online searching service • 24/7 access to contract opportunities• Daily alert service to your e mail• Buyers can identify your services • Guides to selling to various Government Departments• Upgrades to opportunities Regionally, Nationally, and higher-

value contracts on a set fee basis

2012 OLYMPICS OPPORTUNITIES

www.competefor.com

• Business opportunity information

• Business events

• Online registration of details

• Access to tier 1, tier 2 and below supply opportunities

TENDERS ELECTRONIC DAILY

Scan The European Union Tender website

• Official Journal European Union (OJEU)

– Tenders Electronic Daily (http://ted.europa.eu )

OTHER E – PORTALS/SITES

• Salford City Council www.salford.gov.uk • NWDA www.in-tendhost.com/nwda/asp/home.asp• GM Fire www.manchesterfire.gov.uk• GM Police www.gmp.police.uk• Fire Service www.bluelight.gov.uk • Charities www.charitiesbuyinggroup.com • NHS Northwest Procurement Hub

www.nwcca.nhs.uk & www.nwcph.nhs.uk • MOD www.contracts.mod.uk • Etc………………………….

SOURCING OPPORTUNITIES

Tips:

– Plan your approach, time is costly– Don’t be shy of making enquiries to public-sector

bodies about available contracts– Get registered on supplier listings– Look out for news and events in papers &

publications for your sector– Explore the internet for ‘selling to’ sites– Feel free to market your services to the public sector

just as you would to the private sector – (Don’t forget to have your profile ready – USP’s)

PROCUREMENT RULES

• EU Threshold - OJEU

• National ‘Best Value’ Rules (Fair, Honest, Professional, Best Value)

• Local Authority Thresholds & Contract Procedure Rules

E-PROCUREMENT

‘Ability to trade with all suppliers using e-mail and web technology.

Removes paper processes and reduces costs for both buyer and supplier, making trading simpler and more cost effective.’

National e-Procurement Project

E-PROCUREMENT

• Increasingly used by public sector

• Electronic methods in every stage of purchasing process

• Boosts efficiency

• Reduces tendering timescales

• Also benefits to suppliers

TENDERING PROCESS

Types:

• Quotes – lower value contracts• Open – all suppliers allowed to bid• Restricted – 2 stage process, PQQ for all and

then shortlist of suppliers to tender• Negotiated – buyer is allowed to negotiate with

one or more suppliers prior to awarding contract

TENDERING PROCESS

Types:

• Competitive Dialogue – buyer and potential suppliers discuss potential solutions prior to tendering

• Framework Agreements - Agreements between one or more contracting authorities and one or more buyers, used by buyers to establish potential delivery panels, beware no work guaranteed until a contract issued

EVALUATION AND SELECTION

• Published by Buyers in advert– Price, delivery date, quality, technical merit,

after sales service, technical backup, aesthetic or functional characteristics

• Guidelines to ensure a fair and objective process

• Buyers checking suppliers; financial standing, experience and capability

PASSING PRE-QUALIFICATION

• Experience and capability– References

• Able to demonstrate financial standing– 3 years of audited accounts– Turnover 3-4 times the contract value

• Demonstrate Business Probity

• All appropriate policies, procedures, insurances in place

DOCUMENTS REQUIRED

• Certificate of Incorporation

• Group/Company Structure Chart

• Audited Accounts (3 Years)

• Evidence to Support Technical Capability

• Evidence to Support Capacity

POLICIES REQUIRED• Health & Safety• Quality (ISO9001, CHAS, etc)

– Compliments, Comments, Complaints Handling– Continuous Service Improvement– Client Relationship Management– Resource Allocation– Management Information– Data Protection– Confidentiality

• Equal Opportunities– Recruitment– Training & Development (including CPD)

• Financial Management• Environmental Management (EMS, ISO14001, etc)

– Sustainable Procurement Policy/Plan– Green Travel Plans

INSURANCES REQUIRED

• Employers Liability

• Public Liability

• Professional Indemnity

AVOID WASTING TIME –SELECT THE BEST OPPORTUNITY

• Timescales• Buyer• Location• Technical/Specific requirements• Investment• Value

IS IT RIGHT FOR YOU

MAKING THE DECISION TO BID

Tips:

• Analyse the bid documents• Make sure the client is serious• Do you have the time and resources to bid?• Can you meet the technical, skill and experience

requirements?• How much will it cost to prepare your bid?• Do you have the capacity to deliver the bid? (expansion?

consortium? timescales?)• Would the work fit in with your strategy and positioning of the

business?• Estimate the costs of fulfilling the contract and whether or not

you’d make enough money to justify it• Can you resource and manage the delivery of the bid?

WRITING A WINNING TENDER

Key Stages:

• Management of the Process • Planning & Preparation• Collection of Relevant Information/Material• Drafting the tender• Evaluating & Editing the tender• Re-editing the tender• Final draft submitted on time, correct format

WRITING A WINNING TENDER

BE PREPARED

BEFOREHAND

WRITING A WINNING TENDER

• Read all the documentation thoroughly• What does the client want?• How is the response being evaluated? – points

make contracts• What do you need to do next?• What barriers are there to you responding?• Answer the clients questions• Respond in the format the client asks you to• Sell yourself appropriately• Unique selling points, added value, innovation

• Fail to understand service/specification• Lack of capacity, failure to judge extent of service/supply chain• Don’t comply with specification• Don’t answer the question asked• Financial stability raises concerns• ‘Padding out’ the bid with documents to make it look good/or fail to

provide sufficient information• Fail to show experience of similar work• Lack the time to complete tender and/or miss the deadline• Tender doesn’t hang together• Not turning up to supplier meetings• Expect buyer to significantly alter their contract terms

MISTAKES BIDDERS MAKE

• Start with conclusions and then go into detail• Audience may not be listening they need to be

stimulated• More information is absorbed through vision than any of

the other senses• As early as possible tell them what’s in it for them• Present benefits, not just features• Utilise lists• Keep the language simple

TENDER PRESENTATIONS

QUESTIONS