Being Procurement Ready

Gareth White MCIPS

3rd Sector Procurement Officer

Lancashire County Developments Ltd

Introduction

• The public sector spends a huge amount each year and is always looking for new suppliers. However small your business, there are always opportunities to supply this market. Even if you are already supplying one part of the public sector, it is worth looking for opportunities in other areas.

What is the Public Sector

• The public sector employs more than 25% of the UK workforce and includes:

• central civil government departments and agencies; • the NHS and its local trusts; • the Ministry of Defence; • the Northern Ireland Assembly, the National Assembly

for Wales and the Scottish Executive;• Local authorities; • Universities; and Colleges• In the North West in 2002/03 the total identifiable public

sector expenditure on services was £40.9bn (NWDA).

Who are your Potential Customers?

• 467 Local Authorities in England & Wales• 131 Higher Education Institutions • 162 Further Education Colleges• 24,000 State & Independent Primary Schools• 3,500 Secondary Schools• 303 NHS Trusts• 42 Police Services• 39 Ambulance Services• 25 Government Departments

– Agencies attached: MOD 28

What are the benefits to you?

– Usually long standing, stable customers– Huge Public Sector spend– Good payers & proper arrangements– Keen to work with a broad range of suppliers– Chance to get involved in exciting projects

that you will not find elsewhere– Subject to public procurement legislation– You may also find that trading successfully

with the public sector can give added credibility with private-sector customers

What are the possible pitfalls?

– Can be a lengthy and expensive process to winning work

– Different formats and forms to private sector tenders

– Decision-making processes can take longer than in commercial organisations

– Pre qualifying criteria can be strict

Understand How Public Sector Procurement Works

• Public sector procurement must comply with UK law, EU Directives (International laws) and internal rules such as SO’s (standing orders) and SFI’s (standing financial instructions).

• If the total value of the contract (value is usually based on 3 year period) is above certain EU procurement limits then the public sector body must advertise the business throughout Europe in the Official Journal of European Union.

EU Procurement

• The current EU procurement limits as 31st January 2006 are:

• Supply and Service contracts £144,371. However, central government bodies which are subject to WTO GPA (World Trade Organisation Government Procurement Agreement) have a limit of £93,738.

• Works contracts £3,611.319.

• Utilities contracts £288,741.

• Please note that these threshold limits are net of VAT.

EU Tender Procedures

• Under the EU regulations there are three types of tender procedure available to procurement officers:

• Open Procedure. • Under this, all potential suppliers who express an interest

in tendering must be invited to tender. This particular procedure allows companies to apply without prior selection. The timescale for the open procedure is that companies have 52 days to return tenders.

EU Tender Procures Continued

• Restricted Procedure. • Under this the number of interested suppliers to whom

invitations to tender are sent may be restricted, but there must be no discrimination between suppliers on grounds of nationality or Member State. This is usually a two/three stage process in which companies will be shortlisted to receive tenders once they have passed certain pre selection criteria. The timescales for this procedure are 37 days for the companies to register an interest and 40 days from despatch of tender to return.

EU Tender Procures Continued

• Negotiated Procedure. • There are two types of Negotiated Procedure: with the

publication of a notice, and without the publication of a notice. There are strict rules concerning the use of the Negotiated Procedure and very few contracts qualify. One of the rules is that it may be used "when, for reasons of extreme urgency brought about by unforeseeable events, the time limits for the Restricted or Open Procedures cannot be met".

• Only chosen suppliers are invited to negotiate contracts.

EU Tender Procures Continued

• Competitive Dialogue Procedure.• Available for complex procurements where the

contracting body does not consider that the open or restricted procedures will allow the award of the contract. The procedure will allow the contracting body to enter into dialogue with bidders before seeking final tenders from them. It is expected that this procedure is appropriate for many cases where hitherto the negotiated procedure had been used.

Where are Opportunities Advertised?

• Public sector opportunities may be advertised in a wide variety of places. Contracts below the EU limit are often advertised in trade journals, increasingly on websites, and occasionally in national or regional newspapers. However, although encouraged to do so, some public-sector organisations do not advertise low-value contracts at all. You may benefit from identifying the appropriate individual in an organisation, and giving them information

about your business.

Where are Opportunities Advertised?

• Official Journal of the European Union (OJEU – formerly called OJEC)

• Almost all public procurement contracts for business worth more than an EU limit, which is roughly £144,371, must be published in the daily supplement to the Official Journal of the European Union (OJEU). This provides information on the current requirements and invites suppliers to express an interest, or to tender directly in some cases, depending on the contract procedure. It also sets out information about contracts that have been awarded.

Useful Websites

• Supply2.gov.uk• Supply2.gov.uk is a dynamic new government-backed service

designed specifically to give companies easy access to lower-value contract opportunities (typically worth under £100,000) offered by the public sector.

• This portal brings buyers and suppliers together for the first time and is the first portal of call for lower-value business opportunities.

• The Chest• Brings together buyers and suppliers making it easier for buinesses

to find out about sources of potential revenue and to grow and develop to the benefit of the local economy. Suppliers can register online and receive email updates on opportunities that match their capabilities.

What Next? - Responding to Advertised Contracts

• The contract advertisement/notice will invite companies to submit an expression of interest for a contract.

• Once expressions of interest have been received, companies may be required to submit supporting information either via a pre qualification questionnaire or within the ITT (invitation to tender) package.

Responding to Advertised Contracts

• It is important that suppliers provide all the information requested and respond by the due date otherwise they may be rejected from the process.

• The type of information required may include all or some of the following:

• Company details• Financial information• Management and business structure• Resources and staff training• Quality assurance• Environmental matters• Insurance cover• Equality and diversity policies• Health and safety practices• References

The Tendering Process

• The responses from the completed pre-tender questionnaire will be used to assess whether the company can meet the public sector bodies requirements for that particular contract. If the company can meet the relevant requirements they will be shortlisted and will receive an invitation to tender package or ITT.

Conclusion

• You may already be conscious of business opportunities that are out there. But you may not have felt that the processes of bidding to win service contracts, or the pitfalls of entering the contract culture, are for you. One message is clear from those who have followed this path before: the best course of action is to take one careful step into the field and to seek experience through a modest contract or sub-contract.

Thanks………….

•…for your time and for listening.

•Any questions?

Website Addresses

• www.ogcbuyingsolutions.co.uk• www.pasa.doh.gov.uk• www.dh.gov.uk• www.bipcontracts.com• www.supplyinggovernment.gov.uk• www.supply2.gov.uk• www.tendermatch.com• www.contraxweekly.co.uk• www.contracts.mod.uk• www.dcicontracts.com• www.constructionline.co.uk• www.cips.org• www.nearbuyou.co.uk• www.simap.eu.int• http://ted.publications.eu.int• www.tenders.co.uk• www.tendersdirect.co.uk

My details

Gareth White - MCIPS3rd Sector Procurement OfficerLancashire County Developments LtdPO Box 78PrestonTel: 01772 536600E-mail: gareth.white@lancashire.gov.uk