Free Webinar: Social Value in Procurement

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Calling all buyers! Social Value has been part of procurement legislation since 2013, but what is it? And, more importantly, how should these types of questions appear in your procurement documents?

If you would like a firmer understanding of the topic then join our Head of Training and Consultancy, Gemma Waring BA (Hons), for this FREE webinar.

Wednesday 28 February, 1.00pm til 1.45pm

The webinar will cover:

• A high level overview of the Social Value Act 2012

• An explanation of how it can be implemented in procurement documents

• Examples of Social Value questions

• Advice on how to evaluate them objectively

Book your space

Free Webinar: Social Value in Tenders

Millstream Social Value Webinar

Social Value has been part of procurement legislation since 2013 yet it is just starting to filter down into tender documents on a regular basis – sometimes accounting for up to 20% of the total evaluation.

But what is it? And, more importantly, how can you prepare for it?

If you would like a firmer understanding of the topic then join our Head of Training and Consultancy, Gemma Waring BA (Hons), for this FREE webinar.

Tuesday 27 February, 1.00pm til 1.45pm

The webinar will cover:

• A high level overview of the Social Value Act 2012
• An explanation of how it is being implemented in the public sector
• Examples of Social Value questions that have been seen in recent tenders
• Advice on how to prepare for answering social value questions in tenders

Book your space

 

 

Guest Legal Blog: Are regulations making procurement easier for SME’s?

Suzanne Hardie_Morton Fraser

Suzanne Hardie is a partner at independent law firm, Morton Fraser and advises on procurement matters. Here she looks at how procurement regulations are seeking to make the process easier for SMEs.

  1. How effective are the most recent procurement regulations in levelling the playing field for SMEs?

Greater access for SMEs to public contracts was one of the policy aims sitting behind the 2014 EU Directive on Public Procurement, which has now been implemented into national legislation. The CBI’s second report on Procurement Reform (published before the latest round of legislative changes) stated that half of UK Central Government’s £40bn spend was placed with just 39 suppliers, so it is not surprising that this issue received the attention of legislatures. The main barriers to SME involvement have traditionally been seen as a lack of transparency, complexity of procurement process and the size of advertised contracts.

So, how much progress has been made since the latest round of legislative changes came into force?  Before considering the effectiveness of those changes, it is useful to remind ourselves of what they were:-

  • Under the new Regulations, Contracting Authorities now have to actively consider splitting larger contracts (those above the EU threshold) into smaller lots and have to justify their decisions if they choose not to do so. It is also open to Contracting Authorities to limit the number of lots that a single contractor can be appointed to, provided they do so in an objective and non-discriminatory way.
  • Contracting Authorities have to evaluate bids based on the tenderer’s “capacity and ability” to perform the contract, which means that excessive requirements, not linked to the type or value of the contract, are not permissible. In particular:-
    • minimum turnover requirements for bidder qualification cannot be more than twice the contract value, unless there is a justifiable reason for doing so. The previous thinking on this was for 3 times the contract value, so there has been a reduction there in favour of SMEs.
    • minimum PI levels required for bidder qualification need to be objectively justifiable based on the type and value of the contract.
  • The new Regulations introduced the amended qualification process, which brought in the standardised European Single Procurement Document (ESPD) and the ability for bidders to self-certify the information provided. Now only the winning bidder is required to provide the documentation supporting their statements in the ESPD. The European Commission estimated that the change in the qualification procedure would reduce the administrative burden on companies by over 80%.  Scotland has introduced the new Scottish ESPD but it has not yet been implemented in any meaningful way in England, NI or Wales.
  • More generally there has been a drive to further improve transparency through better record keeping and auditing of procurement processes.

As we have only been working with the new regime for a short while, Contracting Authorities, as well as bidders, are still very much in the learning process and there will, inevitably be a period of time before full compliance is achieved across the sector.  The European Commission is focussing on buyer training as a means to ensure compliance.

Some of the changes are more easily implemented than others.  Contracting Authorities had already been working with guidance on minimum turnover and PI requirements and the new Regulations are more of a codification of existing rules than a step change in that regard.

Other changes may take a little longer to be fully embedded.  A quick review of the tender portals will, for example, show that bidders are not always given reasons for a contract not being split into lots, or if they are, the reasons are not particularly specific.  It is also rare to see a limit being placed on the number of lots that a single contractor can be awarded.  The reason for this could be that there is a perceived conflict in being able to demonstrate best value whilst at the same time splitting a contract so as to lose the economy of scale, or saying that a certain lot has not been awarded to the bidder who submitted the most economically advantageous tender because of a cap on the number of lots that it can be awarded.

There is little doubt, however, that the standardised approach to the qualification process through the ESPD is starting to reap benefits for bidders, from both a time and a cost perspective.  This is likely to be the biggest win for SMEs from the most recent changes in legislation.

 

2. Is there anything more that can be done in a regulatory way to enhance the opportunity for SMEs to engage in public procurements?

It is likely that legislatures would want to give Contracting Authorities a period of time to adjust to the new Regulations, before making further changes.  That said, the EU Commission is keen to make sure that buyers fully understand the new rules and use them in a way to create innovation in the economy, which can be done through greater use of SMEs.  The EU Commission published a consultation on “Guidance on Public Procurement of Innovation” seeking to help buyers feel more confident in specifying more innovative ways of delivering contracts, without fear of challenge.  The consultation closes this month (January) and we can expect published Guidance to follow on from that.

At the moment Contracting Authorities are being “encouraged” to design their procurement processes with SMEs in mind, but they are afforded a fairly wide discretion in how they do that.  Based on their current powers under the EU Directive, there are additional measures that Member States already have in their kit bag, should they feel that the current regime is not achieving the policy aim of increasing SME involvement.

As an example, the Directive allows Member States some discretion on the implementation of the lotting rule, so that Government could at some point make it mandatory that contracts of a certain size or type be split.  Government could also choose to extend these current rules so as to apply to lower value contracts, through separate national legislation.

Speed of payment in the supply chain has also raised concerns for SMEs, especially in the construction industry.  The Directive makes clear that Member States should be free to provide mechanisms for direct payments to be made to sub-contractors (who are more likely to be SMEs).  As an example of how this can be achieved, the Scottish Government has now instructed all Scottish organisations covered by the Public Finance Manual to use Project Bank Accounts in high value construction contracts to allow direct payments to sub-contractors.  If this proves to be successful then we may see a further roll out to other industries or to lower value contracts, but this would have to be weighed against the cost of administration.  There is also statutory in guidance in England & Wales about prompt payment of undisputed invoices within 30 days, with a stated aim of paying 80% of invoices within 5 working days.

The Scottish Government has also introduced the Scottish ESPD as well as standardised statements for use alongside the ESPD which Contracting Authorities must use for routine requirements in the qualification process.  This further standardises the process for bidders and will ensure that the policy aims of making the ESPD a reusable document are better achieved.  It may be that this is something considered by other jurisdictions.

We do have to recognise that any attempt to legislate in favour of a certain groups of providers such as SMEs, almost by definition, prejudices other providers in the sector.  Government therefore has to use its powers with caution so as not to make the process anti-competitive, when the aim of the game is to run an open, transparent and fair process for all.  That said, the measures that have been introduced do help to at least make sure that SMEs are given a fair opportunity to compete in the first place.

New Public Procurement thresholds 2018/2019

New Public Procurement thresholds 2018/2019

New Public Procurement thresholds 2018/2019

The European Commission has confirmed the new financial thresholds to be applied to public procurement. The new thresholds will apply from 1st January 2018 and be in place until the end of 2019.

Could this be my last blog on EU thresholds before Brexit?

Who knows, but here it is…

When procuring goods or services over the financial threshold a public authority must do so under the Public Contracts Regulations 2015 in England, Wales and Northern Ireland and the Public Contracts (Scotland) Regulations 2015. These regulations transposed the European public contracts directive (2014/24/EU) into national law.

The main point of interest from our readers’ perspectives is that buying organisations must advertise any requirement over the new thresholds in the Official Journal of the European Union (OJEU), rather than just advertising it nationally. The calculation of the estimated value of a procurement shall be based on the total amount payable, net of VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts as explicitly set out in the procurement documents.

Between the 2016/2017 thresholds and the 2017/2018 thresholds we have seen a small increase in the thresholds in both Pounds Sterling and Euros. Due to the relatively small increase it is unlikely that buyers or suppliers will notice much change in the size of contracts advertised at European level.

PUBLIC CONTRACTS

Supply, Services[1] and Design Contracts Works Contracts[2] Social and other specific services[3]
Central Government[4] £118,133

€144,000

£4,551,413

€5,548,000

£615,278

€750,000

Other Contracting Authorities £181,302

€221,000

£4,551,413

€5,548,000

£615,278

€750,000

Small Lots £65,630

€80,000

£820,370

€1,000,000

n/a
[1] With the exception of the following services which have different thresholds or are exempt:
– Social and other specific services (subject to the light touch regime) Article 74.
– Subsidised services contracts specified under Article 13.
– Research and development services under Article 14 (specified CPV codes are exempt).
[2] With the exception of subsidised works contracts specified under Article 13.
[3] As per Article 74. Services are listed in Annex XIV.
[4] Schedule 1 of the Public Contracts Regulations lists the Central Government Bodies subject to the WTO GPA. These thresholds will also apply to any successor bodies.

Social and other specific services are subject to the ‘light touch regime’ as described in a previous blog.

UTILITY CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Utility Authorities £363,424

€443,000

£4,551,413

€5,548,000

£820,370

€1,000,000

DEFENCE AND SECURITY CONTRACTS

Supply, Services and Design Contracts Works Contracts Social and other specific services
Defence and Security authorities

 

£363,424

€443,000

£4,551,413

€5,548,000

n/a

 

 Points of clarification:

CONCESSION CONTRACTS

For the first time Concession Contracts are covered in EU Law under a separate directive and therefore separate regulations in the UK.

The EU Directive is found here: http://eur-lex.europa.eu/legal-content/GA/TXT/?uri=celex:32014L0023

The UK regulations here: http://www.legislation.gov.uk/uksi/2016/273/contents/made

The UK Directive gives instruction on how the value of a concession contract should be calculated: http://www.legislation.gov.uk/uksi/2016/273/regulation/9/made

The thresholds for publication in the OJEU refers to Article 8 (1) of the EU Directive which is:

  1. This Directive shall apply to concessions the value of which is equal to or greater than EUR 5 548 000.

The Sterling equivalent is £4,551,413

CALCULATING ESTIMATED VALUE

The calculation of the estimated value of a procurement exercise shall be based on the total amount payable, net of VAT, as estimated by the contracting authority, including any form of option and any renewals of the contracts as explicitly set out in the procurement documents.

CONTRACTS SUBSIDISED BY PUBLIC FUNDS

All applicable contracts which are subsidised by 50% or more of public funds must be advertised in the OJEU. From time to time a public body may part fund a project and request that the recipient of funding must advertise the procurement in line with public contracts regulations even if their contribution is less than 50% of the overall value. As such any recipient of public funding on a project should verify with the funding body what is expected of them in procuring for the project.

WHAT ARE SMALL LOTS?

My colleague Line recently wrote a blog to clarify this question: https://blog.tendersdirect.co.uk/2017/01/06/procurement-terminology-what-are-small-lots/

HOW DO I KNOW IF A CONTRACT IS CLASSED AS WORKS?

Many contractual requirements are a mixture of works and services. Whichever element is the highest in value should be taken as the contract nature when determining what threshold to apply. If you are unsure whether a specific element is classed as works or services then you can refer to Schedule 2 of the regulations which lists all activities which constitute works by CPV code:

http://www.legislation.gov.uk/uksi/2015/102/schedule/2/made

If the CPV code which fits your requirement is not in that list then it is not classed as a Works contract.

I hope you find this blog useful. If you want more help with understanding thresholds and other public sector tendering procedures, Millstream’s Training and Consultancy team are available to answer any of your questions. Or, leave us a comment below.

Meeting voluntary standards to maximise the triple bottom line

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The new ISO 20400:2017 focuses on ensuring procurement has a positive environmental, social and economic impact.

Although this new standard is voluntary, sustainable procurement and careful management of supply chains are vital to achieving a triple bottom line ‘people, planet and profit’.

Millstream’s General Manager, Penny Godfrey, comments further at infrastructure-intelligence.com

New Webinar – An Introduction to Public Sector Tendering

Millstream_Training_webinar

Looking to start tendering in the public sector? Join our Head of Training and Consultancy, Gemma Waring BA (Hons), for our Introduction to Public Sector Tendering webinar to learn more about basic industry terms and practices.

Date: Friday 27 October
Time: 1.00pm – 2.00pm

Topics covered include:
– The legislation governing procurement in the UK
– Procurement procedures and the tendering stages
– OJEU and thresholds
– Basic rules for writing tenders

Plus, you’ll also have the opportunity to ask Gemma any public sector tendering related questions during the session.

Book your space today

 

 

Tender Forecasting

deadline-stopwatch-2636259_1920A little heads up can go a long way in the world of public sector tendering. Suppliers usually rely on Prior Information Notices (PINs) to give them a heads up that a contract was soon to be out there to bid on.

PINs are a great way to prepare for a bid response, but the time a supplier has to prepare their bid off the back of a PIN can vary: some PINs can be live for as little as a month before the contract notice comes out.

The longer the supplier has, the better position they are in to make a successful bid. That’s why Tenders Direct has launched Advance Tender Alerts.

Advance Tender Alerts provide suppliers with notifications of tenders, related to their business, up to six months before they expire – covering both above and below threshold opportunities.

Continue reading “Tender Forecasting”

Why we love low value tenders

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Low value tenders are those which aren’t published in the Official Journal of the European Union (OJEU) as they are below the EU threshold set at £106,047.

More information can be found about thresholds in our blog post, but what are the key benefits of low value tenders?

For SMEs and companies who have no experience of working in the public sector, low value tenders are a good starting point. Securing a few low value contracts allows smaller suppliers to build up a body of work that can help them go after high value OJEU notices in the future.

Here are the five key benefits of low value tenders:

Continue reading “Why we love low value tenders”

Top five considerations when bid writing

bid writing

bid writing

If you are a public sector supplier and you’ve found a tender that you want to go for – great news!

Often some areas of a bid response get overlooked in the buzz of bidding for new business. Millstream Training and Consultancy offer bespoke Consultancy to companies looking for tailored support for their tendering exercises. This can be anything from writing a bid response for you, to reviewing a bid response you’ve already written

One of our consultants, Nicola Bramwell (BSc, MCIPS, MSc, PRINCE2), has written her top five ‘must do’s to follow in your next bid response:

  1. Agree a response structure and consistent approach

This can include an overview, technical information, resources, and timeframe, so that the entire team uses a consistent style when preparing a response.

  1. Take advantage of the opportunity to ask clarification questions

Most tenders will provide bidders with a timeframe to which they are able to ask questions relating to the tender e.g. the clauses included in the terms and conditions. It is vital that bidders take advantage of this opportunity to clarify issues which are vague or unclear.

  1. Ensure that all team members adhere to response limitations

It’s common for tenders to include a word / pagination limit for each question so that all bidders are treated equally during the evaluation. If you don’t adhere to these, useful information can be discounted the tender could be deemed non-compliant.

  1. Do not provide non-requested attachments / supporting material

As above, tenders will also specify any additional documents that need to be submitted. No bidder is able to submit documents outside of those specified, if they do, a bidder runs the risk of being disqualified.

  1. Allow sufficient time for responses to be peer reviewed and / or proof read

When writing bids, it is easy for mistakes to be made, such as failing to respond to a certain point within a question or including typing errors or out-of-date information within a response. Get the entire bid to be peer reviewed and / or proof read by another colleague prior to its submission.

To help put these tips into practice, contact us today to find out how we can help you with your next tendering exercise.

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When a local tragedy highlights national public procurement concerns

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In light of the recent Grenfell Tower tragedy that shocked the nation, questions are being raised over local procurement policies across the country. Cost effectiveness and value for money are often the paramount objectives as local authorities continue to face budget cuts. It is paramount however that quality, and more importantly safety, is not jeopardised. Finding the right balance between cost saving and procuring services and products that are fit for purpose is key, but ultimately the welfare and well-being of the end user should be the priority.

Any buyer knows that cost doesn’t necessarily represent value or indeed quality but regardless, detailed specifications are there to be met and for a very important reason. What and who determines the specification, and exactly what this entails, is an important question and something buyers throughout the supply chain must be conscious of.

British safety regulations across many industries tend to be based on principle rather than set rules[1] which can create significant challenges to maintaining consistency and standards. Setting higher standards and adhering to best practice, rather than going with the cheapest bid which meets the specification, is something public procurement officers and regulators must consider.

This reinvigorates the debate over who should set these specifications and regulations. Should they be written by ‘experts’ from the relevant department of the contracting authority, or by that authority’s procurement officers? Or should this role be out-sourced to a third party within that particular industry and sector?

For example and in the case of the Grenfell Tower tragedy, there are no regulations stating fire-retardant cladding material should be used on the exterior of tower blocks and schools[2]. However, it has become clear that industry body, Fire Protection Association (FPA), has been lobbying for this to be a statutory requirement within local authorities and businesses.

Within just one area of local government procurement, say for instance housing and more specifically high rise residential buildings, the vast number of tenders and therefore specifications to be met, add to the complexity. Issues around accountability and quality rise as the procurement complexity grows. Combined with a need to cut costs, this becomes a significant challenge to overcome and get right. But get right all parties must.

In coming months as the impending public enquiry into the Grenfell Tower tragedy continues, more questions on how to improve the public procurement system will undoubtedly follow. Regardless of its outcome, more focus will be placed on the decisions that buyers make, transparency, and who is most qualified to set specifications.

Hindsight is a wonderful thing but nonetheless, there are some important lessons our sector can take away from this tragedy. Steps must be taken to ensure buying decisions are not considered a risk factor in the future.

I am keen to find out how you, as Buyers, feel about the responsibilities you encounter on a day to day basis and how you deal with this pressure. Please let me know your thoughts in the comments below.

[1] https://uk.reuters.com/article/britain-fire-cladding-idUKL8N1JD3YI

[1]https://www.theguardian.com/uk-news/2017/jun/16/manufacturer-of-cladding-on-grenfell-tower-identified-as-omnis-exteriors

 

 

 

 

 

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