Presented by David Hall&Heather Hodgins

PUBLIC PROCUREMENT

25 OCTOBER 2012

PROGRAMME OBJECTIVE

To provide an overview of Public Sector

Procurement,

To assist in the understanding of what is

involved and what is needed to present a

creditable submission for a public sector

contact.

Business with the:

Consumer

Private Sector

Public Sector

DOING BUSINESS

– that part of business activity that is organised and

controlled by the government or its agencies on behalf of the nation as a

whole

The Public Sector

THE PUBLIC SECTOR INCLUDES

Local Authorities

GLA, LOCOG, LLDC

Central Government

NHS

Transport (TfL)

Emergency Services (Blue Light)

THE “PUBLIC SECTOR” INCLUDES

Housing Associations

Colleges & Universities

Quangos

PPP

Approximately 74% of expenditure is Central Government and 26% local government.

PUBLIC EXPENDITURE

ADVANTAGES OF SUPPLYING THE PUBLIC SECTOR

Large amount of business available(Public Sector £675 billion in 2013)

Generally good payers and proper contractual arrangements

Chance to get involved in exciting or unusual projects

Recession resistant – (to some extent, but not immune)

Subject to public procurement legislation

Unlikely to go bankrupt

Not beholden to cash flow problems

Looking to “go local” (Environmental & Local development agenda)

Chance of innovative projects

Chance to demonstrate flexibility

Transparent

Subject to statute (e.g. OJEU)

ADVANTAGES OF SUPPLYING PUBLIC SECTOR

Cash flow being paid on time

Obliged by law to pay within 30 days of receiving a valid invoice, in most cases

the council pays before the statutory 30 days

Barking & Dagenham– 20 days

Waltham Forest – now aiming for 10 days

Feedback

Under the EU procurement Directives - required to provide feedback

If it is requested, even for contracts below the EU threshold

Do not have to give any details of competing bids

DISADVANTAGES

Risk

Cost of process to win work

Time to make decisions

Different paperwork

Poor coordination

Unexpected impact of political decisions (Local Authority)

The Greater London Authority

£0 - 4999 Purchase Order£5000 -14999 Three quotes£15000 - 24999 Three written quotes£25000 – 49999 Mini Tender£50000-£154000 Full Tender£154000 plus EU Tender

Greenwich Council£0 – 10,000 One written quote – from approved list/Concordat£10,000 - 25,000 Two written quotes - from approved list/Concordat£ 25,000 -100,000 Three written quotesOver £100,000 Full Tender - Framework agreement£154000 plus EU Tender

FINANCIAL REGULATIONS

BARRIERS & CONSTRAINTS Not understanding public procurement

Not enough experience or track record (references)

Policies (the core four plus one)

Accreditations & Certifications (e.g. NICEIC, CHAS, Constructionline, ISO,

etc.)

Financial capacity (not having 2/3 years accounts)

Workload capacity

Systems & procedures (Sub contractor/supplier evaluation procedures)

Processes involved in submissions/bidding are complex and costly

Lack resource to submit public sector PQQ’s of tenders

How to find out about opportunities

The Development of e-procurement

BUYERS OBJECTIVES

Purchasers/procurers are looking for a variety of things (and the criteria will vary) but in simple terms the decision is

likely to be in finding a supplier that is:

Qualified and capable (meets the requirements)

Has relevant experience

Provides an acceptable level of risk

Providing Value For Money (or Best Value). HM Treasury: Value for money is the

combination of whole-life cost and quality to meet the user’s requirement.

Has a level of financial soundness.

IMPORTANT TO THE BUYERWhat is important to the Buyer?

Better sources of supply

Increased competition = lower costs

Increased competition = innovation

Help to overcome shortages

Suppliers with understanding of local issues

Also require:

Vetted suppliers

Supply base which is reflective of local community

Opportunity to review and improve

SOME CONSIDERATIONS FOR THE SUPPLIER

• Awareness of the Supply Chain

• Accessing Opportunities

• Considering the risk & Addressing the areas of Risk

• Assessing capabilities, qualifications and references

• Policies and certifications

• Presenting your business

“READINESS TO SUPPLY”

BREAKPRACTICAL WORKSHOP

PRIORITISING RESOURCESCost of seeking public sector work. (Direct and Indirect costs)

Don’t under estimate the time to prepare your business to be RTS.

Certifications. Are they worth it?. (ISO’s, CHAS, SafeContractor, etc.)

Policies & Procedures. Developing and maintaining.

Consider carefully what you want to “go for”

Do you need to consider enhanced staff training?

Costs for on-going monitoring/searching for published opportunities

When you are submitting, make sure you leave plenty of time.

IT requirements?

Be prepared for the long haul

PRE-QUALIFICATION (1)

Demonstrate that your organisation is a creditable

potential supplier Experience and capability

References, track record

Trade membership or quality standards

Staff capabilities

Capacity

Organisation and legalities

Appropriate insurance policy documents

Certificate of Incorporation

Staff structure

Staff turnover rate

Essential Policies for the Public Sector:

•Health & Safety (OHSAS 18001)

•Environmental (ISO 14001)

•Equalities & Diversity

•Quality Assurance (ISO 9001)

•Business Continuity (BS25999)

PRE QUALIFICATION (2)

PRE-QUALIFICATION (3)

Financial status

Two/Three Years accounts

Bank reference

Statement of continued trading

Best practice

Environmental Awareness

Social Responsibility

Training Plans

Recruitment

CRB Checks

Resident Communication Systems

SUSTAINABILITY & the ENVIRONMENT

• High on the Government agenda• Local Councils wish to ensure that their suppliers are committed to

sustaining the environment• Environmental awareness is a “Good selling point”• Opportunities, e.g. CERT• Can you demonstrate your business is environmentally aware?• What positive steps have you taken to manage the impact you

business has on the environment. (Materials, Energy, Water)• Have you an Environmental Policy in place?• Have you an Environmental Action Plan & Management System in

place?• What does your business proactively do regarding reducing, re-using

and re-cycling?• How do you communicate/promote sustainability requirements to your

staff?• Have you a waste procedure in place?• Can you confirm that your suppliers have a sustainability culture?

THE MOVE TOWARDS E-PROCUREMENT

Electronic procurement (e - Procurement) is the purchasing of goods and services

utilising the Internet.

Most large organisations are moving towards greater electronic sourcing, ordering

and transactions (e.g. Payment methods).

The challenge to SMEs is not just to be online, but to be able to respond to

electronic opportunities, invoicing and data interchange.

•Identifying/Finding Opportunities

•Responding to Opportunities (Expression of Interest, Prequalification Questionnaires and Invitations To Tender)

E-Procurement

FINDING OPPORTUNITIES

A website designed to publicise new opportunities within the London 2012

supply chain

Originally Funded by the LDA and the Regional Development Agencies (no

longer since July 2012)

Maximise the economic benefits of the 2012 games

There are 125,000 published companies nationally

30,000 businesses registered in London

45% of companies of the 125,000 are published and until you are, you will

not get anywhere – you have to publish

CompeteFor

FINDING OPPORTUNITIES: E.G.

Public sector contracts under £100K, register atwww.supply2gov.uk

Advertised tenders above EU threshold (c £154K)http://ted.europa.eu (Tenders Electronic Daily “TED”)

http://www.villagesupplychain.com/index.phphttps://www.sell2wales.co.uk/

http://www.govopps.co.uk/www.pasa.doh.gov.uk/sid/

https://www.in-tendhost.comwww.sopo.org.uk

www.espo.orgwww.cbconline.org.uk www.bluelight.gov.uk

SELL YOURSELF WITHIN PQQSME’s have:

Lower cost base

Innovative

Responsiveness

Flexibility

Quality

Specialise

Brings greater competition

Use your USP’s:

Why are you the best

Fast response –better service

Improved environmental impact

Local issues

Give the benefits as well as the

features of your business

Quality of your bid not the service

BALANCED SCORE CARD

1. Within geographical area2. Proportionality3. References4. Accounts (number of years)5. Years of experience6. Trade accreditations7. Policies 8. Need to sub contract (high/low)9. Etc as determined

For example

CARDINAL SINS- Things to avoid

1. Don’t participate unless you are totally dedicated to succeed. It is better to decline than give a poor representation of your business.

2. Late submissions. Failure to comply with timetable3. Spelling mistakes and poor grammar4. Forgetting to remove previous clients name from submission5. Not complying with all instructions, (e.g. format, number of copies, etc)6. Too much waffle and not enough substance. Avoid generic information7. Failing to ask questions of the buyer if unsure8. Exaggerating your business offer to succeed.9. Condemnation of competition10. Taking success for granted or offering bribes or inducements for work11. Failing to ask for de-briefs if unsuccessful12. Busting word limits.

ACCREDITATIONS & CERTIFICATIONS

Third party accreditation

Constructionline the UK's register of pre-qualified local and national construction and construction-related suppliers (DTI funded) - www.constructionline.co.uk

Exor - www.exorgroup.co.uk

Achilles - www.achilles.com

CHAS-

SafeContractor

THANK YOU

David david@courtenayconnect.co.uk.