Following on from our recent blog regarding the changes to the PQQ stage in the new 2015 Procurement Regulations we are going to look at what has changed at the ITT stage and what suppliers need to be aware of when tendering to the public sector.
The most important changes to the ITT stage for suppliers are:
1) There is now greater clarity regarding the rules on social and environmental aspects being taken into account in tenders meaning that:
- social aspects can now also be taken into account in certain circumstances (in addition to environmental aspects which have previously been allowed);
- contracting authorities can require certification/labels or other equivalent evidence of social/environmental characteristics, further facilitating procurement of contracts with social/environmental objectives;
- contracting authorities can refer to factors directly linked to the production process.
The caveat to this is that any factors taken into account must be reasonably achievable for all suppliers so as not to favour larger companies or specific methodologies. We would encourage suppliers to keep a check on your key buyers to see what policies they have in these areas and how they are likely to implement these new rules. For example do they have a big drive on apprenticeships or carbon emissions you could support them on? In general it would be a good idea to start gathering data, case studies and evidence of your company’s positive social and environmental impacts to use in your responses going forward as the level of detail asked for in these questions is only going to increase.
2) Full life-cycle costing can be taken into account when awarding contracts; this could encourage more sustainable and/or better value procurement which will hopefully save money for tax payers in the long term.
This is a welcome step as it will prompt buyers to look at long term quality rather than short term cost savings but how it will be measured and implemented it still not clear. It is heavily linked to social, environmental and sustainability initiatives and again suppliers need to have a good grasp of what this means for their company and how they can evidence it.
3) Legal clarity has been given to explain that contracting authorities can take into account the relevant skills and experience of individual staff members at the award stage where relevant (e.g. for consultants, architects, etc).
This will have implications for your bidding strategy as you need to effectively plan your resources and name names in your bid documents. You can’t bid for three contracts all starting at the same time and promise them all the A –Team anymore! Again, it is unclear how this will be practically implemented and enforced- if for example you win a number of contracts could you then have them removed if you don’t have the exact staff member you named in your bid or will an equally qualified and experienced staff member be allowed to replace them?
The changes to the ITT stage do appear to be more far reaching than the changes to the PQQ stage but the concern for many suppliers will be the lack of clarity on how these changes will be implemented in practice and also the fact that they are open to interpretation by each contracting authority. The danger being that companies who bid for work across a number of authorities will end up having to respond to questions that all interpret key issues such as life-cycle costing and social value differently and will end up having to meet a variety of standards and expectations from their current business model. A situation which will no doubt be costly and time consuming.
As with all aspects of the legislation, more guidance will be given by the Crown Commercial Service in the coming months but it will be very interesting to see how these far reaching issues will be practically harnessed so they can be applied meaningfully to the tendering process. The main challenge for the contracting authorities will be implementing these changes without them becoming a burden to suppliers especially SMEs who have limited resources and for whom the new regulations were supposed to benefit.