Procurement & Tendering Flashcards
What is procurement?
the overall act of obtaining goods and services from external sources (i.e. a building contractor) and includes deciding the strategy on how those goods are to be acquired
What is tendering?
a phase in the procurement strategy and is the bidding process, to obtain a price; and how a contractor is actually appointed
Process/ key stages of Procurement and Tendering
Procurement strategy is agreed (sets out budget, client requirements, procurement route, tendering strategy). At this stage declaration of interest must be provided for all participants
PIN is issued, EOI, SSQ and then ITT are undertaken (depending on tendering strategy this will determine if these are applicable). Declaration of interest is updated at this stage & one is included in tender docs for all bidders
Tender period is identified based on size/ complexity of project.
Tenders are evaluated, sometime with contractor clarification meetings, and consensus meetings held amongst the evaluators to reach an agreed score for each bid. The highest scoring bid is selected as the contractor.
In our company a contract award recommendation must be approved via the appropriate governance channels and the notice of award is then published. As part of the CAR submission the DoI must be again updated for all participants in the procurement & tender process.
There is usually a standstill period to allow any objections prior to the contract commencing with the preferred bidder.
Government tender guidance on what tender documents must include:
Tender documents must include;
- a mature specification,
- clear draft conditions,
-tender evaluation strategy,
- the tender evaluation criteria with marks and weightings,
- management tools you will be using through the process such as Purchase to Payment (P2P)
Government SSQ guidance
Part 1 of the standard Selection Questionnaire covers the basic information about the supplier.
Part 2 covers a self-declaration regarding whether or not any of the exclusion grounds apply.
Part 3 covers a self-declaration regarding whether or not the company meets the selection criteria in respect of their financial standing and technical capacity.
You must not include a pre-qualification stage in any procurement below the EU thresholds for supplies and services.
The questions included in Part 3 of the standard Selection Questionnaire should be adopted across all relevant procurement procedures over the threshold.
governance process for procurement authority (contract award, variations)
New assurance process split into 3 approval;
Line of assurance 1a- line manager approval
Line of assurance 1b- Head of Procurement approval
Line of assurance 2 (over £1m)- CAM
What is procurement authority?
The authority to buy (third party expenditure)
What are frameworks & mini-competitions
A framework agreement allows a client to invite tenders from suppliers of goods and services to be carried out over a period of time on a call-off basis as and when required.
One or more suppliers are selected and appointed. When specific projects arise the client is then able to simply select a suitable framework supplier and instruct them to start work.
Where there is more than one suitable supplier available, the client may introduce a secondary selection process (mini-competition) to assess which supplier is likely to offer best value for a specific project without having to undertake a time-consuming pre-qualification process
What is a Prior Information Notice (PIN)
Public notices used by government buyers of complex products and services. PINs signal to the wider market that the buyer has a specific upcoming commercial need that will require support from one of more external suppliers.
These should be published on UK find a tender 35 days – 12 months prior to issue of the ITT
It provides high level detail on what the project/ works are
What is a Standard Supplier Questionnaire (SQQ)
Supplier selection is a key stage in public procurement where you gather information on and make assessments of the prospective bidders’ credentials, before considering tenders. It is used when there is the potential for a large number of bidders.
Procurement/ tendering documents
Procurement strategy
PIN
EOI
SQ
ITT
What is a Procurement Strategy
outline how each contract and framework call-off that is required by the project will be procured
What is an Expression of Interest
a submission made by a prospective tenderer in response to an advert (or contract notice) for the supply of goods or services. One way that a client can compile a list of potential suppliers that it may invite to tender
Types of Procurement Route
Traditional
Design & Build
Management Contracting
Contract Management
Traditional Procurement
separating design from construction. The client first appoints consultants to design the project in detail and a contractor is then appointed for the construction of the project.
Advantages of traditional procurement
The client retains responsibility; quality control is maintained; and there is certainty of price.
Disadvantages of traditional procurement
it is longer due to fragmented design & construction process; potential for over design and/or over engineering and the contractor is not involved in the design process.
Design & Build procurement
Design & construction is with one company.
Advantages of D&B
It benefits from speed of delivery; single point responsibility and cost certainty.
Disadvantages of D&B
The initial price may be higher; post contract variations can be more expensive; and there is only limited scope for the client to make changes to his requirements.
Management Contracting
contractor employed to manage the works contractors, the client has contract with the management contractor only.
Advantages of management contracting
Beneficial for fast track complex projects with a single point for contractual and payment and there is great scope for the client to make changes.
Disadvantages of management contracting
cost increases can be substantial.
Contract management procurement
contractor employed to manage trade contractors, but the client has direct contracts with each trade.
Advantages of contract management
The client is more in control of the process and has better cost and budgetary control
Disadvantages of contract management
the project needs to be sufficiently large or complex to be cost effective and it requires the client to have the skills and capacity to undertake the procurement process and payment process for each trade contractor
Types of tendering
Single stage
two stage
negotiated
Single stage tendering
The most common type of tendering strategy. ITT documents are issued to a number of competing contractors who are all given the chance to bid for the project based on identical tender documentation. These are then analysed, in terms of cost and quality, before a single contractor is declared the preferred contractor. This is usually done at RIBA Stage 4 so that the tendering contractors receive the most detailed information to base their bid on.
Two stage tendering
- more common in recent years and used where time is constrained (as it enables design and tendering to overlap). It is also used if the design process would benefit from the technical input of a contractor in the later design stages. The process involves first-stage tender enquiry documentation being issued to bidding contractors at RIBA Stage 2 or 3. The preferred contractor is chosen on the basis of the quality of their bid, team and their preliminaries price, overhead and profits allowances. The contractor then joins the design team on a consultancy basis working with the professional team to complete the design, usually to RIBA Stage 4, before presenting a bid for the works at this stage.
Negotiated tendering
a single-stage tender with a single contractor who returns with an initial price. This is then negotiated with the client’s professional team. The benefit of this route is the speed with which a price can be obtained for the works. However, the competitive advantage of a formal bidding process is compromised. Many public bodies and government departments will not allow negotiated tenders except in exceptional circumstances.
Contractor selection techniques
Open tendering
Selective tendering
Single contractor selection
Open tendering
this allows anyone to express an interest to tender. The proposed tender opportunity is usually advertised in journals or on websites.
Selective tendering
this can be in the form of a shortlist drawn up by the project/client team or may be drawn from a pre-agreed framework/ approved-suppliers list. The key difference between this and open tendering is that selective tendering is not open to everyone and the list of suitable contractors is chosen by the project team.
Single contractor selection
this works hand in hand with negotiation as a tender technique. A contractor is selected and then the negotiation process begins.
Procurement Regulations
Public Procurement Regulations 2015
Utilities Contract Regulations 2016
Concessions Contracts Regulations 2016
How I must comply with public regulations
The public procurement regulations set out the thresholds of when a procurement must comply with the regulations and the process it must follow in terms of publishing the procurement, inclusion of SME’s etc.
It is my responsibility to ensure I comply with the appropriate public procurement regulations when undertaking a procurement/ tender (usually UCR 2016)
The majority of above-threshold contract opportunities are to be advertised across the UK on Find a Tender (FTS), the UK’s new e-notification service, and also on Contracts Finder (above £25k unless exemptions apply).
Public contracts 2015 procurement thresholds
Works- £5.4m
Goods & services- £215k
Utilities contracts 2016 procurement thresholds
Works- £5.4m
Supplies & services- £430k
Concessions contracts 2016 procurement regulations
£5.4m
Post-tender negotiation
a separate exercise from Tender Clarification. PTN is contact between the procurement officer and the bidder(s) to refine and improve the bid(s) received in order to ensure that prices, delivery or associated terms of the contract are competitive.
Benefits of electronic tendering
Electronic portals can be used to issue tender documentation be it PIN, EOI, SQ, ITT.
It allows an audit trail of all communications and has the ability to issue notices straight to find a tender, or to client frameworks as appropriate.
It is faster then posting out documentation, and also less costly.
What is a consensus meeting
individual evaluators read the proposals prior to evaluation sessions and make notes of proposed scoring, observations of strengths and weaknesses, and questions regarding the proposal. Once all proposals have been scored individually the panel will meet at a consensus meeting to develop consensus scores for each bidder.
Tender evaluation protocol
initial proposals should be scored individually, based on the information provided, with no bias to any bidder. If any information is missing this should be fed back to the individual managing the process. All tender clarifications should be issued to all bidders. I have undertaken tender evaluations and managed the process, collating tender clarifications and chairing consensus meetings, advising evaluators on the appropriate process for evaluating bids.
What is a Contract Award Recommendation
demonstrate that the recommended supplier offers the best prospect of delivering the objectives of the Procurement Strategy, UK Procurement Legislation has been followed and that budget is available to cover the commitment.
What is a notice of award
issued to each bidder, notifying who the awarded bidder is and feedback for unsuccessful bidders on why they were not awarded.
Contract notice
The award decision also must be published on Contract Finder within 30 calendar days of the award (contract signing) as required under the procurement regulations. The signed contract should also be published with any sensitive data redacted.
Standstill period
There is usually a standstill period (10 days) to allow any objections prior to the contract commencing with the preferred bidder.
What grounds does a bidder have to challenge a tender outcome on?
- problem with the evaluation of the tender e.g. changed the award criteria/ weightings after bids submitted
- failed to comply with the procedural requirements imposed by PCR e.g. failed to advertise a contract correctly
- problem with the way the tender was designed e.g. tender documents contain mistakes
When can a bidder challenge a tender?
- notify of challenge within the 10 days standstill period
- it must be for a tender which is regulated by PCR (government body) and above threshold
Steps for client if challenge to tender received
- 10 day standtill period must be followed for all contracts to give opportunity to challenge
- If challenge received and court proceedings issued the contract must not be awarded (unless court rules suspension to be lifted or challenger allows contract to be awarded)
- Should consult with the legal team and review the grounds for challenge
- Must then review this e.g. have the correct procedures been followed as per PCR? Is there an error in any documentation/ how the evaluation was undertaken?
- Provide a response with evidence on whether the challenge has any merits
When the suspension on awarding a contract due to a challenge can be lifted?
- No evidence that there is a serious issue to be tried
- If damages alone can remedy the challenge
- Look at the impact on the awarding party vs the impact on the challenger as a result of the suspension
How to prevent challenges to award?
- Be clear if the tender is subject to PCR
- If yes ensure all steps are followed e.g. how opportunities are published, information provided, timescales
- Ensure accurate drafting of tender documentation including a review period by another person
- Evaluation strategy is in place prior to issue of tender documents and all evaluators are clear on process so it is followed correctly as detailed to tenderers
- Ensure clear and detailed feedback is provided to unsuccessful bidders and the standstill period is complied with
How did I advise on the most appropriate procurement route & tendering process for PAS2?
I produced a procurement strategy which gave an overview of the project and set out the clients objectives.
I then set out the procurement & tendering options I had reviewed with detail on why each was discounted and why the selected option (Design & Build via a single stage framework mini competition) was most appropriate/ best met the objectives of the client.
How did you advise the project team on the mini competition process?
I set up a meeting prior to commencement of the mini competition in which I outlined exactly what the steps were:
- issuing the documents & what the documents would include
- how TQs would be managed ensuring fairness
- how site visits would be arranged ensuring no opportunity for collusion
- the evaluation protocol ensuring no bias from previous dealings or from each other
How did you advise on the suitable supplier for PAS2?
I produced a contract award recommendation which includes:
- an overview of the project, the procurement route and approach to market
- an analysis of each tenderers bid and a table showing high level scoring against the evaluation criteria
- a summary of why the selected bidder was awarded based on the evaluation scoring outcome (if anyone was removed & how they would appropriately deliver the works)
If there is an arithmetical error in a tender submission what would you do?
Firstly I would refer to the ITT to check what it states for this.
In some cases discretion may be able to be applied and the bidder could be given the opportunity to amend their error, however it must be checked that this only is corrected and they are not given the opportunity to improve or add to their bid.
However there is no obligation to allow for this and the tender could be discounted
What are the benefits/ changes being introduced in the Procurement Act 2023
The Procurement Act 2023 will come into force later this year replacing current public procurement regulations e.g. PCR & UCR.
It is looking to reform UK public procurement following exit from the EU with:
- Updated procurement objectives emphasising value for money, public benefit, acting with integrity, fair treatment of suppliers, and consideration of SMEs
- Updated procedures aimed at simplifying and enhancing flexibility
- Enhanced transparency through contract award notices and assessment summaries
- Implied payment terms ensuring timely payments throughout the supply chain, bolstering cash flow and financial stability.
