SUPPLY LONDON

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SUPPLY LONDON
SUCCESSFUL TENDERING
June 2003 Mary Edwards Email
mjedwards_at_bl4london.com June Ryan Email
jryan_at_bl4london.com
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INTRODUCTION

• Business Link Supply chain team
• Guest speakers
• You and Your Business
• Why are you here
• Specific experiences with tendering

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WHY THIS WORKSHOP

• Broaden Public Sector Supply Base

• Diversity in Supply Chain

• Enable Supplier for Public Sector supply

• Where to find opportunities

• Tendering process and procedure

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Why tender for public contracts?
Pros
Cons

• Process can be cumbersome
• Hurdles may seem insurmountable
• Perceived expense

• Consistent and on-time payment
• Tenders from SMEs are encouraged
• Ethical and legal
• Prestige

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WHAT IS A SUPPLY CHAIN
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SUPPLY CHAIN
Product flow average time from raw materials to
consumer
WEEKS
MONTHS
DAYS
WEEKS
PRODUCTION SUPPORT
TIER 1
TIER 2
TIER 3
TIER n
DESIGN
PAPER MILL
PACKAGING
MANUFACTURER
INGREDIENTS
FOREST
RETAILER
TRADERS
inc, lactose, salt, whey, veg fat, hydrolysed
milk, flavourings, skimmed milk powder, egg
white, emulsifiers, flavourings, red cocoa,
sugar, glucose, protein, etc
CONSUMER
RAW MATERIALS
SUPPLY SIDE
DEMAND SIDE
B
A
C
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SUPPLY CHAIN
Product flow average time from raw materials to
consumer
WEEKS
MONTHS
DAYS
WEEKS
PRODUCTION SUPPORT
TIER 1
TIER 2
TIER 3
TIER n
DESIGN
PAPER MILL
PACKAGING
MANUFACTURER
INGREDIENTS
FOREST
RETAILER
TRADERS
inc, lactose, salt, whey, veg fat, hydrolysed
milk, flavourings, skimmed milk powder, egg
white, emulsifiers, flavourings, red cocoa,
sugar, glucose, protein, etc
CONSUMER
RAW MATERIALS
SUPPLY SIDE
DEMAND SIDE
B
A
C
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SUPPLY LONDON

• Free 5 day programme
• Workshops
• Individual diagnostic
• Tailored specialist advice
• Mentoring
• SupplyNet

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SUPPLY LONDON Promoting competence and diversity
in the London Supply Chain
Public Sector
Private Sector
London SMEs
The Competence Gap

• Quality Processes
• Health Safety
• Environmental
• Equal Opps
• Financial
• E enablement

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SUPPLY LONDON Promoting competence and diversity
in the London Supply Chain
Public Sector
Private Sector
London SMEs
Meet the Buyer, Business events and marketing
activities
Tendering for Public contracts Workshop Part
I Workshop Part II
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SUPPLY LONDON Promoting competence and diversity
in the London Supply Chain
Tendering for Public contracts Workshop Part
I Workshop Part II
SupplyNet Web Portal
Procurement diagnostic resulting in capability
report

• Brokered Supplier Assessment and Mentoring
• Conducted by BL4L BAs and SC advisers
• Quality Processes
• Health Safety
• Environmental
• Financial
• E enabled

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SUPPLYNET
What is SupplyNet?

• An easy to use low cost Internet site for
  London
• On line trading marketplace for London business
• A tool to support the Supply London Programme

www.businesslink4london.com/supply
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Where are the opportunities?

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Break
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KEVIN TREEBY

• Director of ProcurementHouse of Commons

Tel [phone] E-mail treebyk_at_parliament.uk
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PUBLIC SECTOR PROCUREMENT

• WORKING WITH EU DIRECTIVES

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WHAT DIRECTIVES ?

• 92/50/EEC
• Public Service Contracts Regulations 1993
• 93/36/EEC
• Public Supply Contracts Regulations 1995
• 93/37/EEC
• Public Works Contracts Regulations 1991

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MORE DIRECTIVES !

• 93/38/EEC
• Utilities Contracts Regulations
• Remedies Directive
• Acquired Rights Directive
• TUPE/TURER Regulations

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SINGLE DIRECTIVE

• Remedies
• - overturning signed contracts (Alcatel)
• E-procurement
• Competitive Dialogue (but no negotiation !)
• Framework Agreements

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COMPLYING WITHEU DIRECTIVES

• Public Sector funds which may make their way into
  the private Sector, in amounts of 100K, will by
  and large be subject to the Public Procurement
  Directives.

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EU DIRECTIVES

• Threshold values
• 100,410 - goods services
• 154,477 - as above, for OPSBs
• 3,861,932 - works

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Definition Includes

• Public funding paid to private sector contractors
• Private sector organisations made responsible for
  spending public sector funds
• Public sector organisations spending private
  sector funds
• PPP contracting - where public funding amounts to
  more than 50

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DIRECTIVES REGULATE ...

• Advertising
• Qualification Criteria
• Tendering Timetable
• Probity

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PROBITY

• Even-handed Processes
• Transparency
• Non-protectionist
• Remedies Directive
• Nil (Less) Corruption

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EU Directives

• OPEN
• 52 days from OJEC to return of tender
• 6 days to issue ITT
• RESTRICTED
• 37 days to register interest
• 40 days to tender

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EU Directives

• NEGOTIATED
• 37 days to register interest
• ACCELERATED
• 15 days to register interest
• 10 days to tender

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OTHER KEY DIFFERENCES

• Open - All OJEC respondents may tender
• Restricted - Right to pre-qualify applicants
• Negotiated (Open/Closed) - Failed Rest or Open
  need to negotiate price highly
  complex/specialised sole source.
• Accelerated - Cause for delay is outside buyers
  control

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QUALIFICATION CRITERIA

• Technical capability
• Financial standing
• Legal compliance
• taking account of proximity
• Policy relevance
• appropriate to delivery

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ADVERTISING

• Supplement to the Official Journal of the
  European Communities - OJEC
• OJEC first
• No omissions
• Limited size - 650 words
• Sets out submission selection criteria
• Form of tender
• Reference number/CPC

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PRIOR INFORMATION NOTICE (PIN)

• OJEC Notice
• Scheduled programme/lump of work
• 464K
• Notice to follow between 52 days - 1 year
• Effects tender duration period
• Open from 52 days to 36
• Restricted from 40 days to 26

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SHORT-LISTING(Restricted Procedure)

• Either the notice or ITT must indicate the range
  of bidders - starting at 5
• EU maximum is 20 - UK Departments would normally
  aim for a figure around 7

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DEBRIEFING

• EC Directives entitle all parties to a debrief
• including the successful bidder
• Debriefs should be written (for audit) - but
  delivered orally
• Maintain confidentiality of all other bids

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CHOOSING A SUPPLIER
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ADVERTISING - or SUPPLIER SOURCING

• LOW VALUE
• Yellow Pages/Kellys
• Trade directories
• Trade associations
• Past providers
• MCD (Consultants)
• Web sites

• HIGH VALUE
• OJEC
• GO/Contrax Weekly
• National/local press
• Trade publications
• House journals
• Web sites

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LOW VALUE PURCHASES(below 50,000)

• Below 1K 1 oral quote
• 1K-3K 2 oral quotes
• 3K-5K 2 written quotes
• 5K-10K 3 written quotes
• Above 10K 3 or more formal tenders

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LOW VALUE PURCHASES(Consultancy Services)

• Up to 2.5K
• (or 1 or 2 days work) 1 written quote
• 2.5K-6K
• (or 3 to 5 days work) 2 written quotes
• 6K-10K
• (or 5 to 9 days work) 3 written quotes
• Above 10K 3 or more formal tenders

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SUPPLIER SELECTION

• Basis and means
• Questionnaire
• Experience of doing work
• Size/capacity of company
• Legal compliance
• Financial stability
• review of accounts/DB/bank guarantee
• User/customer reference
• Site visit
• Interview

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SUPPLIER SELECTION

• Capability
• resources, quality, support, location, industrial
  relations
• Financial capacity
• cash flow, profitability, assets, turnover, acid
  test
• Availability
• current commitments

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SUPPLIER SELECTION

• Past performance
• for you, for others
• technical, management, administration
• flexibility, co-operation, extra-contractual
  claims
• Cultural fit
• similar policies (staff, safety, environmental)
• Social benefits
• local community relations

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SINGLE TENDER ACTION

• To be avoided wherever possible
• Allowed where work is an extension of a recently
  completed contract
• Allowed where the necessary expertise or product
  is only available from one source

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FORMAL TENDERING
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ITT

• The specification / scope of work / statement of
  requirements
• Price schedule
• price breakdown
• like-for-like comparison
• Legal forms plus terms and conditions
• Administrative instructions
• Instructions to tenderers

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Instructions to Tenderers

• How to complete various forms
• What additional submissions needed
• Notice of pre-tender briefings
• Where to send tender
• Date and time for receipt
• Special packaging instructions

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FORMS

• Part I - Declaration
• Bona fide bid
• Open for XX days
• Part II - Qualifications
• Changes to ITT (esp. legal terms)
• Part III - Parent Company Guarantee
• Commitment Support

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TERMS CONDITIONS

• Legal terms conditions
• Protect the parties - manage the risk
• Set responsibilities, obligations, limitations
  and liabilities
• Ensure legal compliance
• Define the terms used

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TERMS CONDITIONS

• Designed to meet Departmental statutory and
  regulatory obligations
• GAR, Audit
• Protection of the Crown
• Indemnities, insurances, break
• Up-holding national laws departmental policies
• Discrimination acts, insurances, anti-corruption

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TERMS CONDITIONS

• Legal terms conditions (2)
• Supply provision of materials
• Manner of carrying out the work
• Variation procedures
• Invoice and payment procedures
• Inspection of work
• Contractor personnel (TUPE)

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TERMS CONDITIONS

• Legal terms and conditions (3)
• Contractor to inform himself
• Assignment
• Sub-contracting
• Audit rights
• Recovery of monies owed
• IPR - Ownership and breach
• Confidentiality

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TERMS CONDITIONS

• Legal terms and conditions (4)
• Breach
• Liabilities
• Suspension termination
• Force majeure
• Insurance
• Permits

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TERMS CONDITIONS

• Legal terms and conditions (5)
• Compliance with buyers procedures
• Compliance with discrimination law
• Offers of employment
• Notices
• Severability
• Governing law
• Hand-over

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THE SPECIFICATION

• Should be clear, concise and unambiguous
• Focus on service/product required
• Do not over-specify
• Should be output performance based
• State what is needed not the method of delivery
• Future is for outcome based specs

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SPECIFYING A SERVICE

• Services are packages
• Core or fundamental - that which you cannot
  remove without destroying the nature of the
  package
• Support - those parts that enhance the core and
  differentiate
• For specific tasks, duties or whole functions
• Services people

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PRICING SCHEDULES

• Designed to evaluate like-for-like
• Maybe for evaluation purposes only
• Include only necessary cost elements
• Exclude detailed breakdowns if not needed
• Opt for Firm, Fixed, Firm/Fixed or Total prices

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EVALUATING TENDERS PRESENTATIONS
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TENDER EVALUATION

• Conformance to ITT specification
• delivering what you ask for
• Compliance with ITT requirements
• providing the right submissions
• agreeing to the legal terms
• Affordability
• is it within allocated budget

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EVALUATION ISSUES

• Time delivery factors
• Service/product quality
• Reports/management information needs
• Security of premises data
• IPR
• Environmental impact
• Contingency

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TENDER EVALUATION

• Each member to have own copy of the bid and
  evaluate independently
• Each member starts with a different bid
• Wash-up meetings with entire team to list
  according to the qualitative score
• Over-lay budgetary constraints and note areas of
  non-compliance

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TENDER EVALUATION

• 0 - 5 Score System
• 3 Acceptable
• 4 Above acceptable/introduces innovation
• 5 Excellent/delivers more than envisaged
• 2 Less than acceptable/lacks any innovation
• 1 A detrimental solution/will cause problem
• 0 Failed to address

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PRESENTATIONS

• See only those with a chance of award
• Critical for service contracts to assess
• Personal chemistry
• Communication skills
• Presentability
• Will inevitably be more subjective than earlier
  evaluation stages and likely to come down to our
  confidence in presenters ability to perform

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POST-EVALUATION

• Seek all necessary clarifications, additional
  information and confirmation of statements
• Negotiate best and final ONLY with the preferred
  supplier
• If preferred supplier BF is rejected, approach
  2nd-placed bidder
• DO NOT re-open discussions with rejected bidders

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VFM CALCULATOR

• Bidder A
• evaluation score 125
• price 120
• Bidder B
• evaluation score 100
• price 100
• Bidder C
• evaluation score 120
• price 125

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Ensure Compliance

• Follow Instructions carefully
• Is the tender bundled
• Innovative bids
• Price according to the model
• Respond by the correct date and time
• Do not attempt to canvass
• Look carefully at the evaluation criteria

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ANY QUESTIONS?

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THANK YOU
mjedwards_at_bl4london.com
jryan_at_bl4london.com