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Meeting social value criteria: 5 Steps

Social Value

The Social Value Act came out as legislation from 2012 and has recently hit the headlines again via the Crown Commercial Service.

The act concerns the benefits you, as a supplier, can bring to a public sector contract to improve the local area you are working in. This can be in many different forms such as providing apprenticeships, working on charitable projects or supporting local enterprise development.

From now on, social value is now becoming a weighted part of the evaluation criteria in tendering: what was originally 60% price and 40% quality will more than likely now be moving to 50% price 40% quality and 10% on social value. In fact social value might make up to 20% of the evaluation criteria as has been noted in the strategic approach of local councils such as Knowsley and Manchester.

Suppliers will also have to effectively manage and monitor their social value activity to prove the promises listed in their tender documents come to fruition.

How do you prepare for social value evaluation?

1. Understand the concept

Some suppliers fall into the trap of thinking they can shoehorn their existing environmental and sustainability actions to fit and this will rarely prove effective. Read these examples from the Crown Commercial Service to gain an insight into social value in practice.

2. Engage with your key buyers

Ask direct questions pre-procurement such as ‘What are your important areas of work in social value?’ You might find synergies between buyers and your company ethos.

3. Look at your work

Sometimes suppliers may be fulfilling the social value criteria but don’t record it or recognise it. For example: Do you employ locally? Support local suppliers in the supply chain? Offer apprenticeships? Do any community or charity work?

4. Look at gaps and practicalities of implementing new processes

Suppliers need to fill in any gaps they have in social value activities. But, think through the implications of any additional social value measures you might want to put in place. For example, offering apprenticeships will affect your HR team, line managers and the wage bill.

5. Document it

Your social value activities are only as valuable as your ability to prove you have done them and that they have been effective. You need to have case studies, data and statistics to quote in your tenders to demonstrate that you have done what you said you would and that it has made a positive impact socially.

 

Additional sources of info on The Social Value Act

https://www.gov.uk/government/publications/social-value-act-information-and-resources/social-value-act-information-and-resources

http://inspiringimpact.org/

https://socialvalueportal.com/social-value-taskforce/

http://www.socialvaluehub.org.uk/

If you require any further support or guidance get in touch on 01224 650 772 or email gemma@proactis.co.uk

www.tendersdirect.co.uk/training-courses

E-communication: what does it mean for buyers?

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UPDATE: As of 18th October 2018 all public procurement exercises require e-communication between buyers and suppliers unless there are specific circumstances that make it impractical. In this blog we outline the requirements that buyers are now subject to.

What constitutes electronic submission?

E-communication became mandatory for Central Purchasing Bodies (CPB) in April 2018 and has now been rolled out to all purchasing authorities in the public sector.

This has brought an end to hard copy communications by requiring all interactions between buyers and suppliers relating to a procurement exercise to be conducted through a secure and auditable online system.

Regulation 22 of the Public Contracts Regulations 2015 states that electronic submissions from suppliers must use a tool where the exact time and date of submission is provided and that access rights are limited to authorised persons only.

Why has this change been implemented?

The overall rationale for the change is that e-communication is commonly agreed to help streamline and strengthen the procurement process for both buyers and suppliers.

The new rules are intended to improve transparency and auditability, make public contracts more accessible to suppliers, promote cross-border tendering, and reduce administrative costs.

What does this mean for buyers?

In order to comply with the regulations buyers must ensure that communication with suppliers is secure and that there is a comprehensive audit trail of all interactions.

This must be a dedicated tool with inbuilt safeguards – a secure electronic postbox – rather than a generic email system. Purchasing authorities need to have access to a platform that supports this.

Want to find out more?

myTenders Pro provides all the required functionality to allow buyers to publish tender notices, conduct competitions, manage contracts, and guarantee compliance with all applicable regulations including those relating to e-communication. Call us on 0800 222 9009 for more information.

 

Developing a bid strategy in a challenging marketplace

How to develop a bid strategy in a challenging marketplace

Recently, Millstream highlighted the strength of Virgin’s approach to business development in our article featured on Energy Voice’s website. Virgin have championed diversification across sectors to generate more business opportunities: taking people to space, running the railways and providing healthcare services are just a few examples of Virgins product range.

This approach to business has resulted in staggering financial rewards for Virgin and other companies who are able to operate as primes in the prime/sub model.

The prime/sub model is when a large contractor wins the tender and are the prime contractor to the buying authority, they subcontract out elements of the tender to other suppliers, usually locally based SMEs.

So what impact does the prime/sub model have on SMES?

We all know there has been a massive drive from the government to support SMEs to benefit from the wealth of opportunities in the public sector.

This has been seen through their commitment to spend 33% of central government money with SMEs and also through the changes to the selection criteria in 2016 making it easier for SMEs to bid.

The question is – when huge prime contractors are winning huge contracts and replacing existing smaller providers, how is the government’s agenda being achieved?

The answer is it usually isn’t: when a prime contractor wins a public sector contract they are ultimately responsible for delivery and are looking to make profit. This often has a negative impact on the finances for SMEs as the prime contractor seeks to find efficiencies and cost savings through the supply chain to increase their own profit.

When a supplier is faced with the potential of the prime/sub model taking up a chunk of their business or taking away a business critical tender, many SMEs may feel they have no option but to join the supply chain if they are to survive.

However, that might not be their only option to succeed! Facing your Goliath means you have to find your inner David and seek out a new way to do business.

So what is the answer?

The answer is simple – have a strategy in place. Nothing stays the same in business and this is the next big challenge smaller providers are facing. There are a number of proactive steps suppliers can take to ready themselves for any impending changes:

  • Pre- Engage with the Contracting Authorities

    in these situations waiting for the tender is too late. The only way suppliers can influence hearts and minds is to engage in advance of the tender being released. Use Tenders Direct to search for contract award notices (CANs) to find out when a contract is due to end, or to gain contact details from key buyers. You can also keep an eye out for prior information notices (PINS) which notify you of a future procurement exercise and give you plenty of time to pre-engage with the contracting authorities.

  • Form a consortium

    rather than get swallowed up into the jaws of a prime contractor, suppliers can meet with other local providers to see if they can form a consortium or a special purpose vehicle and bid together. These groups of suppliers can then trade on their established infrastructure and wealth of experience and be able to trade on their own terms.

  • Join the team

    some may relish the prospect of joining a supply chain. Suppliers will lose a lot of responsibility and liability when it isn’t their name on the contract, and some may prefer to operate with a lower steak in the contract with less risk rather than nothing at all.

These potential strategies translate across industries and sectors. Millstream meet with suppliers every day and as a qualified bid manager, I am constantly surprised how many do not have a documented and thought out bidding strategy.

I encourage suppliers to be proactive and take control of their destiny.

Working in the public sector can offer suppliers long term, well-paying business opportunities, and these deserve just as much time and attention as an internal strategy.

If you want to analyse your own bidding strategy or even create one from scratch, you should join our half day Success Simplified courses in London and Manchester and make sure you are deciding on your business’s future and not leaving it in the past.

Brexit: A “historic moment from which there can be no turning back” – but what does it mean for public procurement?

eu-1473958_1920After the referendum result last June and the resulting legal challenges, parliamentary debates, votes and royal assent (not to mention the debates down at the pub and on social media) Prime Minister Theresa May has finally triggered Article 50 notifying the European Council of the UK’s intention to withdraw from the EU. Whichever side of the debate you found yourself on one thing is now clear – the UK is leaving the EU and that is likely to have a huge impact for us all.

Unfortunately, but unsurprisingly, the PM’s letter to the European Council triggering Article 50 made no specific reference to public sector procurement – it’s unlikely to be at the top of any agenda – but point v.i. of her “suggested principle” for the negotiation deals with trade.

If any major change is to come in relation to public procurement it will be as a result on the outcome of the negotiations relating to trade between the EU and the UK. It is important to note that at present and until the negotiations are complete and the UK leaves the EU, the procurement regulations will remain the same. The European Council’s Directive on Public Procurement has been transposed into UK and Scottish law by the current Public Contracts Regulations 2015 and Public Contracts Regulations (Scotland) 2015 respectively. After exiting the EU, the UK will have the option of amending or replacing these regulations but it seems unlikely that they will change drastically.

All EU member states have roughly the same ambitions when it comes to public sector procurement – openness, transparency, fairness, VfM, increasing access for SMEs – and therefore the current regulations were designed with these in mind.

If you were hoping for a removal of perceived EU “red tape” in public sector tendering I believe you’ll be disappointed. Indeed, you may instead experience some “red, white and blue tape” as the UK lawmakers amend the relevant regulations whilst ensuring that all the principles of good public procurement processes remain in place.

If the UK is to become part of the European Economic Area, a status held by the non-EU countries of Iceland, Norway and Liechtenstein then very little is likely to change. The EEA countries are bound by their membership agreement to follow the principles of EU public procurement and all three countries advertise their above threshold procurement requirements in the Official Journal of the European Union (OJEU).

Even if the UK does not join the EEA, it is still a signatory of the World Trade Organisation’s Government Procurement Agreement, which imposes the principles and practices of fair procurement on all its members. The public sector will still need to purchase what it does today and will need to advertise it openly. This may just mean that the opportunities are advertised on national platforms rather than in the OJEU. Either way you can be sure that Tenders Direct will be picking them all up and distributing relevant opportunities to our members!

Making your own luck

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We’re all familiar with the various thematic clichés associated with St Patrick’s Day celebrations: leprechauns, pots of gold, four-leafed clovers and good luck. But did you know that the phrase “luck of the Irish” does not necessarily refer to the good variety?

Continue reading “Making your own luck”

The tender matchmaker…

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It’s Valentine’s Day. That time of year when people pay attention to the special connections they have in life and take a bit of time to celebrate them. Or maybe you are still looking for some special connections? Still searching for that one relationship with long term potential, stability and plenty of money…

Of course, here we’re talking about your business connections – specifically your connections with public sector buyers and tendering. With contract life spans of three years plus, 30 day payment terms and a high chance of you retaining a contract once you’ve won it once – what’s not to love? Continue reading “The tender matchmaker…”

Public Procurement Thresholds 2017 – update

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* 2018/19 Public Procurement Thresholds Update Available here *

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  in Scotland.

The current thresholds are as follows:

Public contracts

Supply, Services and Design Contracts Works Contracts Social and other specific services
Central Government £106,047

€135,000

£4,104,394

€5,225,000

£589,148             €750,000
Other contracting authorities £164,176

€209,000

£4,104,394

€5,225,000

£589,148            €750,000
Small lots £62,842

€84,000

£785,530

€1,000,000

n/a

 

Social and other specific services are subject to the new ‘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  

£328,352

€418,000

£4,104,394

€5,225,000

£785,530              €1,000,000

 

Defence and security contracts

Supply, Services and Design Contracts Works Contracts Social and other specific services
Defence and Security authorities £328,352

€418,000

£4,104,394

€5,225,000

 n/a

 

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 5 186 000.

The Sterling equivalent is £4,104,394.

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?

See this blog.

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.

Questions? Leave a comment below.

 

 

Quirky Tenders: 2016’s most memorable tender notices

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Here ye, here ye, we’ve got some entertaining news.

2016 has drawn to a close. What happened in the 365 days that made up 2016?

Continue reading “Quirky Tenders: 2016’s most memorable tender notices”

The end of onerous practices in UK Procurement?

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On Monday of this week the Crown Commercial Service (CCS) released a Public Policy Note (PPN) on ‘Onerous Practices in Procurement and Contracting’. Put simply they are referring to procurement practices which place far too much risk on the supplier. This in

Continue reading “The end of onerous practices in UK Procurement?”

CPV codes – are they accurate?

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In October of 2016, the European Commission announced details of a study on CPV codes – Common Procurement Vocabulary codes – which tender notices are classified under.

There are around 10,000 CPV codes, and the list of codes was last updated in 2008. The codes range from very niche; animal ear tags (03340000); mange-tout (03221222); zirconium (14735000), to more common areas; building construction work (45210000); health and social work services (85000000) and computer supplies (302373000). The codes don’t reflect new technologies and computing mimicking the advance in technology in recent years, branding a lot of CPV codes out of date.

Despite this, buyers still list their contract notices under these codes in the hope of them being found by suppliers who want to bid for it.

The research carried out by the European Commission this October threw up some sobering news: in a sample of 405 notices tested, 23% had the wrong code associated with the scope of work tendered.

In around 10% of cases the code applied did not describe the work/supply/service procured; in some 8%, the code applied was too general, and in about 4%, the code was too specific.

So amidst this muddle of what code gets used where, what does this mean? In fact, it’s a pretty big deal for both buyers and suppliers.

If an incorrect code is used, a buyer is minimising the chances of there being a range of suppliers for them to choose from. They may not be able to choose from varying prices or scrutinise against the MEAT criteria: most economically advantageous tender. Public contracts can be awarded either on the basis of lowest price or MEAT, and buyers have to justify why they have chosen to spend a certain amount of money.

If they have very little to make comparisons on, buyers can end up spending more, either by using an expensive supplier due to lack of choice, or by using the cheapest supplier and getting a shoddy result which may have to be re-tendered for in the future.

For suppliers who supply works, services and supplies in a specific field, if a wrong code is used they are less likely to find contracts that they can tender for. CPV codes are a very specific classification and if the code isn’t correct, the supplier is missing out on opportunities which are destined for them. These could be SMEs who survive on providing specific services, and using the wrong CPV codes doesn’t benefit these niche businesses.

For example, for a contract ‘Collection of key qualitative and quantitative information on the European Commission’s merger decisions’ the code for ‘market research’ (code 79310000) was used, when in fact, something more appropriate like the code for ‘economic research’ (79311400) or ‘research services’ (73110000) could have been used. Due to the misuse of CPV code, the contract was never awarded.

The ill use of codes also affects the public. When work finally passes the business case for approval within an organisation, and for various stages to be passed, the work is still ‘undone’. If the tender needs to be re-advertised, we are looking at a similar timeframe to. Across the UK we are waiting for better roads, new schools, these things are all part of a very long queue.

Time is money. So what help is out there? Suppliers who don’t have access to a comprehensive tender alert service like Tenders Direct could be potentially missing out on lots of business opportunities thanks to incorrect CPV codes.

Tenders Direct is a wide-ranging tender alerts service which relies on a team of tender reviewers reading the contract and then classifying it against a set of key words that ensure tenders are classified to meet supplier requirements. We do not rely on CPV codes, we rely on experienced reviewers who can read between the lines and figure out exactly what work is being tendered for.

Our service helps marry up buyers with suppliers. A supplier is notified of tenders which fit the criteria of work they are looking to deliver, which is the way our service works. With our site, there is less likelihood of suppliers missing out on potential opportunities.

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Our procurement experts help make procurement easier, and we take pride in being able to minimise the noise and help a buyer classify what they want, and feed the right opportunities directly into the right supplier mailboxes.

To CPV or not to CPV? That is the question.

Link to Tenders Direct homepage

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