Charities working with the public procurement process
If only I had a pound for every time someone told me procurement exercises would be more efficient and straightforward if they were run outside the European OJEU process (that’s in accordance with the Public Contracts Regulations 2015 if you are a lawyer like me). But I have to say, I am not sure I agree.
OJEU is the Official Journal of the European Union rules and procedures for public procurement. It is the publication in which all tenders from the public sector that are valued above a certain financial threshold must be published.
The rules cover organisations and projects that receive public money and which would be undertaking the procurement. They would include local authorities, NHS Trusts, central government departments and educational establishments - all of which charities often seek to supply services to.
There are different thresholds for different types of contract and sometimes for different types of contracting authority. For the purposes of this article, being in relation to the sort of contracts charities would be tendering for, I think really that OJEU kicks in above a level as low as £164,176 for goods and services contracts.
It is true that the OJEU process imposes various rules, many of which are what you might call bureaucratic, around how contracting authorities buy goods, works and services. But it is also true that they ensure a degree of consistency across all public sector procurement processes, coupled with transparency, non-discrimination and equality. That has to be a good thing, right?
Well I think the rules are here to stay for the UK, whatever results Brexit brings; they are certainly due to continue covering the UK for the next two years. That being the case, let’s look at the benefits of the system as it is, and how charities can use it to their advantage.
The first point to make is that once an OJEU process has started, the principles of transparency and fairness prevent any contracting authority (that’s a state owned, controlled, funded or regulated body to you and me) speaking to any one participant in the procurement, without sharing details of that conversation with all other participants.
For that reason, completely open dialogue with a contracting authority once the process has begun is rare. That means it is important for contracting authorities to “soft test” the market before formally launching a procurement exercise.
I am a strong advocate of charities, and indeed any other suppliers to the public sector, seeking to engage with contracting authorities on their future procurement activities before the time comes for them to kick the process off. In that way, each party to the conversation can have a full and frank dialogue as to what is currently available on the market, supply issues, concerns with regulation, shortage of labour and the like.
This is your chance to influence future processes (legitimately!) in a way that might appeal to the way you do business. So be brave, go and talk to your potential employer clients well before they start their procurement process.
Outside OJEU procurement there is so much freedom and flexibility in the way a purchasing process can be run that you will not necessarily be able to play to your strengths when competing against other bidders. With OJEU, on the other hand, standard form prequalification questionnaires are now de rigour - so you know what to expect, and can have all details to hand and stored centrally, so they can be easily updated and mobilised each time a qualification opportunity comes along.
Contracting authorities must publish full details of their scoring criteria and associated weighting, which is often accompanied by their scoring methodology. This is not so different from my GCSE maths book back in the day, which had questions at the front and all the answers in the back.
Amazingly, however, people still fail to read the guidance that accompanies the bid documents, and fail to pay attention to these details. At risk of stating the obvious, if a tender is being run on a 30:70 quality to price basis, pricing of the bid is going to be more important than the quality of the solution, so if you know you have difficulty supplying a competitive price in all probability you may as well save your resources and wait for a better opportunity to come along.
Equally, if your success depends on an ability to produce a number of references evidencing your experience in providing similar services and you have no one to supply such references, well, then move on!
You should not waste words telling a potential client who they are by parroting the content of their tender, or indeed, by replicating the contents of your standard marketing collateral. Instead, you should be focused on trying to meet the scoring criteria, having one eye on the scoring methodology and another on use of words. Make sure you clearly tell the contacting authority why it is that your skills, resource and experience will help the contracting authority to better achieve its objectives. Which takes me on to another point…
Do you know what their objectives are and what they are looking to achieve as a result of the procurement process? If you don’t, then perhaps you ought to.
Tender processes will always have an initial period during which clarifications can be raised by bidders and answers sought to any unknowns and ambiguities in the tender documentation. A golden rule is therefore to read the tender documentation early on, even if only at speed, so you can identify any time periods that are applicable to the procurement. Do not make the mistake of reading the tender for the first time after the date for receipt of clarification questions has passed!
Once you have identified the deadline for clarifications, make sure you read the documents fully again in advance of the deadline so you can put in a strong bid having raised any questions to which answers are required in advance.
Although it depends on the nature of the procurement process, contracting authorities are usually prevented from making material amendments to their contract documents once the procurement process is well under way. They are also restricted from making further variations once a contractor has been appointed.
You should raise as soon as possible in the process, ideally during the course of clarifications, any concerns about commercial or drafting points in the documents. Generally speaking, contracting authorities will be reluctant to concede substantial changes favourable to a contractor, but they should be open and amenable to changes that could have a material impact on a charity’s ability to deliver - so read the draft contract carefully and identify these sorts of points as soon as you are able.
It can be very frustrating and awkward (not to mention legally questionable) for contracting authorities if bidders wait until they have been awarded a contract to point out all the things they don’t like about it – at that point, arguably, it is simply too late.
At clarification stage think carefully about whether circumstances may arise further down the line meaning some form of variation to the contract may be needed (possibly to keep pace with economic fluctuations or to account for market variations). If not already built into the contract, you may want to propose the introduction of a change control mechanism to facilitate this sort of amendment; it is likely to make life a lot easier in the long term.
Once clarifications are dealt with and your tender has been submitted, it’s then a waiting game to discover the outcome. If you are unsuccessful, remember that you are entitled to feedback. Don’t be afraid to query the contracting authority’s decision and ask for more information about why you were not successful and also understand the reasons for choosing the successful bidder.
Seeking feedback is always useful from a "lessons learnt" perspective, but it can also sometimes help identify if there were any irregularities in the procurement process that you may want to raise with the contracting authority. A decision to raise a formal challenge should never be taken lightly, but bidders should certainly be alive to the fact that procurements can occasionally be flawed, and that they – the bidders – actually play an important role as part of the checks and balances within the public procurement system.
Ultimately, when bidding for, contracting with or generally working alongside contracting authorities, charities should always keep in mind that contracting authorities are – like any business – looking to secure the best deal for the best value.
They are usually required to do so within the parameters of the public procurement regime, but these parameters are, in my view, more of a help than a hindrance in creating an effective business framework. The overarching commercial principles remain the same and charities should use these to their advantage to win the best bids.