Transcript How to Prepare Effective PQQs & Tenders

Selling to the Public Sector – helping
Leicestershire SMEs unlock their potential
Preparing Effective
PQQs & Tenders
Bob Moodie & Vicky Byers
NJM European, Economic & Management Consultants Ltd
Preparing Effective PQQs & Tenders
 The Procurement Context & Process
 Identifying tendering opportunities in the
local economy
 Developing a Strategic Approach
 Preparing effective PQQs and Tenders
The Procurement Context: Regulatory Framework
EU Procurement Directives
(Competition Policy)
European
National
Government Strategy
Statutory Requirements
Local
LA Procedures,
Statutory Requirements
Local Agreements
EU Procurement Thresholds
Supplies
Central Government
plus some ‘Quangos’
(see Schedule 1 List)
Other Public Sector e.g.
Local Authorities,
Universities, FE, etc
Services
Works
€125,000
€125,000
€4,845,000
(£101,323)
(£101,323)
(£3,927,260)
€193,000
€193,000
€4,845,000
(£156,442)
(£156,442)
(£3,927,260)
Thresholds relate to Total Contract Values (including any extension options),
are applicable from 1st of January 2010 and are NET of VAT
Principles: Open competition, non-discrimination, equal treatment and
transparency.
Note: Exchange Rates
A New Procurement Environment
Policy/Legal
Economic/Financial
EU Competition Policy (Procurement)
Price & Value for Money (VFM) & M.E.A.T.
Coalition Govt. / Local Govt.
(Transparency – LAs must publish details
of all Invoices of £500+)
Comprehensive Spending Review
Rationalisation & Framework Agreements
Coalition Govt’s aspiration to award 25% of Contract Bundling (Economy of Supply)
central Govt. contracts to SMEs
Ability to deliver economies and efficiency
Leicestershire County Council’s
savings
Sustainable Commissioning & Procurement
Strategy (2009-13)
Social
Technological
Corporate Social Responsibility
E-Portals
Sustainability, Equality & Diversity
E-tendering & E-auctions
Innovation & non contractual outcomes
Real time reporting
Procurement Procedure
Procedure
Characteristics
When the procedure is adopted
Open
All qualified applicants must be
given the opportunity to bid
For lower risk procurement where supplier
capability is less important or where the
focus is on price
Restricted
Two stage process with facility to
shortlist (PQQ + Tender)
Where capability of supplier is key
determining factor in the delivery of the
contract, market response likely to be
huge to allow short-listing
Negotiated
Two stage process with facility to
negotiate at second stage
Specification is not clear or some creative,
artistic or expert input is required.
Competitive
Dialogue
Two stage process with facility to
enter into a dialogue with potential
suppliers to consider potential
solutions and refine specification
before invitation to tender
Complex procurement where suppliers
expertise has significant impact on the
development of the specification
Framework
Agreement
Stage One: Suppliers selected
through open/restricted procedure to
a panel of suppliers for given period
Stage Two: Call-Off or Mini
competition will be held when
services/goods required
Capability and Capacity is important and
is generally a recurring/constant
requirement (max 4 years; including
extension options)
Procurement Process Overview
Procure
Contract
Notice
EOI
Tender
Commission
Review
PQQ
Manage
Award
Evaluate
Identifying Opportunities:
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.
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
Local Procedures
Public Sector
Organisation
Leicestershire
County Council
Blaby District
Council
University of
Leicester
Threshold
(Goods & Supplies)
Procurement Process & Source
<£1k
£1k – £20k
>£20k – £100k
1 Oral / Written Quote
3 Written Quotes or www.sourceleicestershire.co.uk
Request for Quotation www.sourceleicestershire.co.uk
>£100k – EU
threshold (£156,442)
Formal Tender Process www.sourceleicestershire.co.uk
Or www.espo.org
£0 – £1.5k
Officer discretion
>£1.5k – £5k
2 Written Quotes
>£5k – £50k
3 Written Quotes
>£50K - EU threshold
(£156,442)
Formal Tender process (min. 4 organisations invited)
£5k - £25k
>£25k – EU threshold
(£156,442)
3 Oral / Written Quotes
Formal Tender via departments or www.in-tend.co.uk
Finding Opportunities
 Where should you look / who should you know?
PUBLISHED
UNPUBLISHED SOURCES
Tender websites & Supplier
portals
Networking / relationship building
Organisational / Sector websites Procurement Teams / Category
Managers
Tenders Electronic Daily (TED)
Operational departments and units
Local / National press / Press
releases
Market analysis / competitor intelligence
Trade Press
Partners / sub contractors
Meet the buyer events /
briefings
Second / Third Tier Contractors /
Supply chains
Contract Notices: Key Websites
Name:
Source:
Used by:
Source Leicestershire
www.sourceleicestershire.co.uk LAs, NHS in Leicestershire
Eastern Shires Purchasing www.espo.org
Organisation
LAs, NHS in Leicestershire, OJEU
tenders
Leicestershire County &
Rutland NHS
http://www.lcr.nhs.uk
NHS
Voluntary Action
Leicestershire
www.valonline.org.uk
Contract opportunities for
voluntary sector
In-Tend
www.in-tend.co.uk
Universities, Colleges, Schools,
LAs (some in Leicestershire and
nationally)
Blue Light
www.blpd.gov.uk
Police, Fire & Rescue Services
(including Leicestershire
Constabulary & across UK)
Supply to Government
www.supply2.gov.uk
www.supply2health.nhs.uk
Lower value government tenders
(*website will be replaced by
‘Contracts Finder’ March 2011)
OJEU
www.ted.europa.eu
Any public sector contract above
EU Threshold
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 your details on tender e-portals and set up for
Alerts service, newsletters etc
Be Systematic & Get Organised
 Set up internal processes and individual(s) to monitor
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
tender portals, alerts, sources and review feedback
Network (buyers/commissioners, meet the buyer
events)
Competitor analysis (New Transparency - £500+)
Search for potential business partners / collaborators /
subcontractors
Develop / improve your key policies so that you comply
with public sector tender competition requirements
Accreditation (e.g. CHAS, ISO, IiP etc)
Developing a Strategic Approach
To bid or not to bid?
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?
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?
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
Consortia
Benefits:
Risks:
Increase capacity and scope to bid e.g.
Overcome PQQ impediments
Partner selection and getting Agreement / legal
document
Shared trade history (combined capability
and capacity)
Trust relationship (how well do you know your
partner – can you be confident they can and will
deliver)
Business Development: Access new
clients and markets
Complex decision-making, loss of autonomy,
compromises and concessions
Spread risk
Sharing sensitive information
Mutual learning and innovative
approaches
Logistics (Co-ordinating bid)
Delivered additional added value (the
Logistics (Contract delivery)
whole is greater than the sum of the parts)
Improve chance of success
Pre-Qualification Questionnaires
The First Hurdle
 Evaluation of your organisation
 The aim of the PQQ is to check that your company is
(for the contract term)
 Technically competent
 Financially sound
 Legally compliant
 Gives the buyer a means of short-listing
interested organisations on the basis of fair and
objective criteria
PQQ: Example Scoring Framework
Section
Score Weighting
1
Organisation Details
N/A
2
Financial Information
N/A or Risk Based Assessment
Pass/Fail
3
Insurance
4
Business Activities
15%
5
Business Practices
30% (Total)
Pass/Fail
Health & Safety
5-10%
Quality Assurance
5-10%
Environmental Management
5-10%
Equality
5-10%
6
Requirement - specific
40%
7
Experience & References
15%
8
Professional & Business Standing
Pass/Fail
Example ‘Scoring’ Criteria
Score
Response Type
Reason indicated for Score
0
Non-compliant response
No relevant information / solution provided in response
to contract requirements.
1
Unacceptable response
Partially compliant response but with serious
deficiencies in solution offered, indicating serious
difficulties / inability to deliver contract requirements.
2
Unsatisfactory response
Partially compliant response with shortfalls in solution
offered, indicating not all contract requirements could
be met and thus difficulty in delivery of the contract.
3
Acceptable response
Compliant response, indicating basic contract
requirements are met but not exceeded. Contract could
be delivered.
4
Good response
Compliant response, clearly indicating entire delivery
can be met and solution offers some limited benefits
beyond stated requirements.
5
Excellent response
Compliant response, bidder illustrated comprehensive
understanding of contract reqs. Proposed solution
provides significant additional benefits beyond stated
reqs.
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
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
PQQ Information
General Business Activities
 Overview of Existing Business Activities
 Overview of Main Areas of Expertise & Accreditation
 What percentage of your business is concerned with providing
services similar to the contract requirement
 HR Information (Number of Staff, Staff Profiles)
Contract Specification
 Explain and demonstrate your Capability and Capacity to fulfil the
contract requirement
 Case Studies (relevant to contract specification and demonstrating
your ability to fulfil the size, scope and complexity of this contract)
 Subcontractors
 Relevant References (norm = 3 recent referees) & contact details
PQQ Information
Essential Policies:
 Quality Management
 Equality & Diversity
 Health & Safety
 Environment Management & Sustainability
Why are they necessary?
 They are a legal requirement
 They are a purchaser requirement
 They help articulate the company’s values and principles for both
staff and clients
 They bring business benefits and are relevant to contract delivery
♪♫ Accentuate
♪
the Positive ♪♫♪
Do you have a Health & Safety Policy?
Weak Answer:
 “Yes, see Appendix 1”
Good Answer:
 “The Health & Safety of our staff and customers is a vital part of
the company’s quality process. We operate a comprehensive
Health & Safety Policy (see Appendix 1) covering all aspects of
our products (services) and operations and it is reviewed
biannually.”
 For an SME employing less than 5 people: “Although we are not
required legally to have a Health & Safety Policy, we take this
matter very seriously and have adopted a Health & Safety Policy
in the interests of our staff and clients (see Appendix 1)”
♪♫ Accentuate
♪
the Positive ♪♫♪
What Quality Assurance arrangements does your company
operate? If no accreditation is held please explain why not and
what alternative steps you take to ensure quality at work?
Weak Answer:
 “We operate our own quality system. We have determined that
formal accreditation is inappropriate to our company’s needs.
Complaints are the responsibility of the Managing Director.”
Good Answer:
 “We regard quality as a vitally important part of our business
activity and we operate a comprehensive and strict internal quality
assurance process covering all aspects of our business activity
(details can be found in Appendix 2). We are committed to a
process of continuous improvement and we are in the process of
applying for ISO 9001 (we expect to be assessed in May of this
year)”
Business Continuity



What is your Approach to Risk Management in terms of
Business Continuity?
Do you have a formal Business Continuity Management
Programme? If YES, enclose a copy of your
plan/programme document
Within the last 3 years have there been any occasions
when you business operation has been disrupted?
 If YES what were the circumstances and what was the effect
upon your customers?

Do you have a strategy for ensuring continuity of supply
from your critical suppliers?
Avoiding a Poor Score
Common reasons for a poor score:
1.
Failure to follow the instructions
2.
Writing by committee, no narrative flow and lack of
control/ownership
3.
Incomplete or missing answers/sections
4.
Supporting documentation incomplete
5.
Repeating answers or referring to ‘see above’ (questions are
rarely repeated)
6.
Over emphasising what you sell, rather than what they are
looking to buy
7.
Recycling old PQQs & Tenders: Beware ‘Cutting & pasting’!
8.
Generic PQQ/Tender response
9.
Providing response on general capability instead as opposed to
specific contract requirements
Invitation To Tender (ITT)
The Second Hurdle
 Evaluation of your detailed proposal
 What are you going to do
 How are you going to do it
 Who is going to do it
 How much will it cost
 What is your track record / prior experience
 Compliance
 References
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
Preparing the Tender
Managing the preparation of your bid
 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.
o NB: Build in time to review, refine and style bid
Preparing the Tender
Tender Design: What is the Buyer looking for?
 Design a clearly structured tender response aligned against each
tender requirement and criteria (e.g. core, gateway and specific).
Ensure compliance!
 Demonstrate a clear understanding of the brief (i.e. the challenges
are understood and addressed)
 Methodology: clearly show who (CVs) does what, why, when, how
and benefits from buyer’s perspective – illustrate with diagram
(Gantt)
 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?
 Contract management and communication (i.e. how you interface
with the client to monitor project)
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
 Presentation
Case Studies: Example Structure
 Client Name & Contract Title
 Work of same/similar nature, scope and scale
 What, When and How you did it
 Client Benefit (Outputs & Outcomes)
 Innovation & Added Value
 Contract Value/Price
 Reference confirming work was performed to client
satisfaction and to schedule
NB Be concise and relevant
Preparing the Tender:
Costing Your Proposal
 Follow Instructions in Tender re presentation of costs/fees/prices
 For services: Charging Rate(s) (Daily/Hourly) & Time & Personnel
 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
Value for Money and Best Value (VfM)
 VfM is the optimum combination of cost, quality
and fitness for purpose to meet the buyer’s
requirements (it is not about the lowest price)
 Local authorities are subject to the Best Value
guidelines
 Embraces the concept of the ‘price-quality’
relationship
 Selection usually will be made on the most
economically advantageous tender (MEAT)
Risk: What is your Approach
Risk identified
for:
Client
Delivery
Supplier
Mitigation (i.e.
what will you
do)
Impact
Classification
(High, Medium, of risk:
Low)
Reputation (R),
Operation (O),
Finance (F)
Exercise
 As a local company, how might
you emphasise that you have a
number of advantages?
Exercise: Example Answers
Wrong Answer:
 The Council should give contracts to local companies as a matter of
course, because it retains profit in the area and improves local
employment levels.
Right answers:
 Lower Cost Base
 Close proximity to client : Allows customers to change their requirements
at short notice
 Local knowledge: Specialised knowledge of local issues or local
communities
 Fast response time, leading to better and more flexible service
 Improved environmental impact of shorter travel distance; potential
economies of expenses
 Commitment to sustainable procurement (Investing in Local Supply
Chain)
 Corporate Social Responsibility (Community Investment & Involvement)
Preparing the Tender:
Bid Writing
Language & Style:
 Write in plain English: short sentences and
paragraphs;
 Avoid jargon and unexplained abbreviations
 Use ‘active’ verbs, refer to ‘we’ and ‘you’
 In your response try to reflect key wording as found in
the tender specification
 Punctuation and spelling really matter
 Lay-out: Use clear headings aligned to tender
specification; standardise fonts, illustrate where
possible
Aim for clarity, brevity, readability and persuasion
Buyer Preferences
LIKE
Don’t like
Concise and precise language
Wordy tenders, Inconsistencies and errors,
poor use of grammar
Clear structure (esp. Methodology)
Poor methodology (failure to define who
does what, where, when, why and how)
Challenges have been understood and
properly addressed
Deviation from defined requirements, lack
of understanding of client requirements and
failure to answer questions
Relevant background information
Lack of detail/explanation or ‘data dump’
Properly defined & appropriate resources
Unclear who will be involved in delivery
Systems & procedures
Exaggerated and unsubstantiated claims
Innovation – or the opposite (tradition)
Poor evidence of reliability
Risk assessment (mitigations)
No risk assessment
Case studies & references
Irrelevant case studies
Do’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
Concluding Remarks
 Make note of instructions, word limits and submission format
Be compliant!
 Try to understand what each question is asking and why they are being
asked. Answer the Question
 Note the scoring / weighting of criteria. Spend time / effort on your
response accordingly
 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
 Make careful note of the deadline and make sure you submit well in
advance of the deadline (Avoid last minute submissions)
 If unsuccessful (or successful) ask for a debrief
Be...
Compliant
• Tender Format & Requirements
• Policies, Insurances, etc
Persuasive
• USP
• Added Value and/or Innovation
Competitive
• Quality
• Price
Tender Sources
www.espo.org
www.sid4health.nhs.uk
www.sourceleicestershire.co.uk
www.construction-on-line.co.uk/
www.sourcenottinghamshire.co.uk
www.delta-ets.com
www.sourcenorthamptonshire.co.uk
www.ted.europa.eu/
www.sourcelincolnshire.co.uk
www.exor.co.uk
www.sourcederbyshire.co.uk
www.bluelight.gov.uk
www.CompeteFor.com
www.cbconline.org.uk
www.supply2.gov.uk
www.contraxonline.com
www.tenders.ac.uk
www.publictenders.net/tenders/region/east-midlands
www.in-tend.co.uk
www.dh.gov.uk/ProcurementAndProposals/fs/en
www.supply2health.nhs.uk
www.publicprocurement.co.uk
www.procurement.supplychain.nhs.uk
www.buyingsolutions.gov.uk
www.skillsfundingagency.bravosolution.co.uk
For one to one support contact:
 Email: [email protected] or [email protected]
 Tel: 0191 284 4949