Gwerth Cymru Value Wales

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Gwerth Cymru Value Wales
Supplier Selection
Nick Sullivan Gwerth Cymru/Value Wales 2
Gorffenaf/July
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Selection

• Requirement for suppliers to satisfy minimum
  levels of economic financial standing and/or
  technical or professional ability
• Focus on the suitability of a supplier in
  principle to deliver the contract

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Selection

• Selection Criterion are those that will apply to
  select supplier to be invited to
  tender/participate/negotiate
• Based on
• Economic and Financial Standing
• Technical and Professional Ability

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Selection

• Open Procedure all supplier which pass the
  selection stage will be eligible to proceed to
  award stage
• Restricted, Negotiated Competitive Dialogue
  Procedure all suppliers which pass the
  selection stage will be eligible to proceed to
  award stage unless the contracting authority has
  clearly communicated the objective and
  non-discriminatory criteria by which it will
  limit the number selected to participate. Must
  also clearly specify the minimum number of
  suppliers to be selected.

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Selection

• Mandatory Exclusion
• Paragraph 23 of the Public Contract Regulations
  set out criterion for Mandatory Exclusion of
  suppliers
• Financial Impropriety

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Award

• Contracts awarded on the basis of one of two
  options
• Lowest price, i.e. the lowest priced tender wins.
  No other element of the tender may be taken into
  account or
• The most economically advantageous tender (MEAT).

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IMPORTANT

• Contracting organisations MUST ensure that
  selection and award criteria are not confused.
• Transparency Contracting Authorities must be
  transparent on selection and award criteria, sub
  criteria and associated weightings

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Lianakis The requirement to clearly distinguish
between selection and award stages. Rules that
use of past experience must not be used as award
criterion selection criterion onlyAmaryllis
Transparency of criterion including sub criterion
and any associated weightings.
Case Law
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Supplier Selection Options

• Two options for evaluating responses
• Go/no go
• Scoring/ranking responses

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Supplier Selection Options

• Personal Situation/Grounds for Rejection
  definitely go/no go
• Economic/Financial Standing both go/no go and
  ranked approaches used
• Technical/Professional Ability possible to
  combine go/no go and ranked approach

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Selection With Go/No Go

• Criterion pass marks to be risk assessed
• Clearly communicates required selection standard
  allows suppliers to deselect
• Pass marks must be justifiable
• Completely objective

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Ranked Selection

• Requires clearly defined method for ranking PQQs
• Allows differentiation of bidders
• Doesnt clearly communicate pass requirements
• Can become subjective

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An example..Financial Appraisal

• OGC - Financial Appraisal Guidance
• financial appraisal is a selection criterion
• analyse financial positiondetermine the level of
  risk
• business judgement to assess risk
• turnover can be a useful indicator
• financial appraisal is part of broader, holistic
  assessment
• Opening Doors is consistent with this guidance

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A 5m Contract

• Go/No Go approach
• Risk assessed minimum 18m turnover required
• SME, 20m turnover, multinational, 500m turnover
  both pass
• But
• Ranked Approach
• Scores allocated based on overall turnover
• Multinational 500m turnover, 10 points
• SME, 20m turnover, 5 points

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Financial Appraisal

• Risk based assessment
• set a higher financial standard where risk and
  consequences of failure are high
• set lower financial thresholds where risk and
  consequences of failure are less significant
• Important to get it right!

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Getting Selection Right

• Selection criteria should be set for each project
• Ideally combine both go/no go and ranked approach
• Can we develop a more consistent go/no go
  approach?
• Financials what data is required to make an
  assessment? How will it be assessed?
• Health and Safety what data is required to make
  an assessment? How will it be assessed?

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Questions