Quotations, Contracts and Tenders

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Quotations, Contracts and Tenders

• Presentation by
• Simon Gresham

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About Me

• 30 years working in contracting environment
• Started in catering
• Worked on first local authority compulsory
  competitive tendering
• Moved on to market testing of central government
  services
• Worked on major accommodation PFIs
• Advisor to a range of clients and contractors
• Now advise on small and large procurements mainly
  covering facilities management
• Live in Norfolk

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Current Agenda?

• Drive for savings
• Local services passed down to Town/Parish
  Councils
• More outsourcing of non core/back office services
  to save money
• Debate in house or private sector which is
  best?
• Are there alternatives?

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Current Agenda?

• Joined up services
• Linking with other Authorities
• Joint Ventures
• Greater use of the voluntary sector (The Big
  Society?)
• More resident involvement/views
• More reporting greater visibility and
  accountability

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Current Issues

• Standing orders being reviewed
• Updates in contracting procedures
• Difficulties finding contractors
• Too many contractors?
• Deciding who to invite shortlisting
• OJEU
• TUPE
• Specifications and documents
• Evaluation of bids
• Do you have any current issues?

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Ground Rules

• Be clear about the process you are adopting
• Be clear about Standing Orders and internal
  Council processes
• Involve the right people in the Council
• Examine the feasibility
• Gather the users requirements so that you get
  want you want
• Make sure you get something back from the
  supplier that shows they can deliver and for what
  price
• Evaluate the proposals on a like for like basis
• Manage the arrangement once you have agreed it

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Definition Quotations

• Used for smaller procurements check Standing
  Orders regarding de-minimis levels
• Follows same processes as tendering
• Prepare a brief (Specification)
• Invite a number (3 or more) to put in
  quotations/proposals
• Evaluate the proposals objectively
• Decide who to appoint
• Notify successful proposer and those who were
  unsuccessful
• Letter of appointment

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Definition Tendering

• Used for larger scale procurements where Standing
  Orders would suggest that Quotations are
  insufficient
• A more comprehensive process involving creating a
  specification and tender, going out to tender,
  evaluating the tender and then awarding a
  contract

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Definition Contracts

• The document that underpins the award of
  service/supply
• Made up of a number of essential conditions
• Contract period
• Parties
• Change
• Pricing
• Payments
• Personnel
• Disputes
• Termination

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The Overall Process
Before you seek quotations or tenders
Feasibility study
Competition Strategy
Project Plan
What could we do?
How could we do it?
What is our plan?
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The Overall Process
Seeking quotations/tenders
The Competition External Bids In-house Bids
Evaluation
Procurement Strategy
Specification or Brief
How do we go about it?
What do we want?
Let us see what is on offer?
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The Overall Process
After you have selected a provider
The Client Side
Contract Management
Implementing the partnership
Are we set up to manage it?
Let us now manage it?
Let us see how well we did?
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The Feasibility Study
Best Practice
Market Research
Corporate Factors
Future Demand
Evaluation
Option Design
Implementation
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Feasibility Study Options

• Close down
• Re-structure/re-organise
• Make internal efficiency improvements
• Partnering with neighbouring council - SLA
• Benchmark
• Test the market
• Outsource
• Privatise
• Joint venture

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The Project Plan
Receive Expressions of Interest (PQQ)
Produce Specification/Brief
Determine Service Requirements
Advertise the Service/Supply
Issue Invitation to Tender/ Quote
Shortlist Providers
Receive proposals
Evaluate proposals
Manage the Contract
Clarification with first choice
Start the Contract
Award the Contract
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Procurement Principles

• Competition is invited
• Advertisement
• EU Directive application use of OJEU (Official
  Journal of the European Union)
• Canvass the market
• Seek quotations
• Suppliers are shortlisted against stated criteria
• Pre Qualification Questionnaire (PQQ)
• Capability and track record
• Financial health
• Contract packaging
• Contract period

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Other Key Questions

• Does TUPE (Transfer of Undertakings Protection of
  Employment Regulations) apply?
• If it does, how does it apply?
• How are pensions to be dealt with?
• How will you deal with change (e.g. technology
  refresh)?
• Do you share savings?
• What is Quality and how to be dealt with?

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Specifications

• Input versus Output
• Can you ever achieve a totally output based
  approach?
• What do contractors think?
• What are your Imperatives?
• If you go for an output approach, do you accept
  the risks?

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Specification Contents

1. Introduction / Background
2. Service Requirements
3. Service Standards
4. Supporting Appendices/Data/Fact Sheets

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The Invitation to Tender/Provide Quotations

• Letter of invitation with instructions
• Draft Contract Conditions
• Specification/Brief
• Tender/Quotation Response document
• Evaluation criteria and weighting for quality and
  price

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Evaluation

• The Principles
• Fair and even - select the right team
• Compare like with like - develop the right
  process
• Look at quality as well as cost
• Develop a model
• Develop a risk register

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Example Evaluation Criteria

• M.E.A.T. - Most Economically Advantageous Tender
• A Full Economic Cost
• B Service Delivery quality
• C Service Management quality
• D Approach to people issues
• E Implementation approach
• F Flexibility for the future
• G Synergy with client
• H Commercial/contract terms

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Mobilisation Activities

• Staffing and communications (TUPE)
• Recruitment and training
• Pricing and payments
• Contractual and relationship (reporting)
• Assets and infrastructure
• Implementation (may be over time rather than
  immediately)

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Managing the Contract

• What do you need to make it work?
• A clear specification
• Sensible hand-over arrangements
• Effective communications
• Recognition of teething problems

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Managing the Contract

• Clairvoyant contractors do not exist
• Ill informed clients tend to get annoyed
• Avoid the them and us mentality
• Be consistent
• Avoid personality clashes
• Develop the relationship

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Quotations, Contracts and Tenders

• Clinic Your Questions Answered?
• Jargon is there any jargon still unclear?
• For further information about Quotations,
  Contracts and Tenders please feel free to contact
  Simon Gresham on simongresham_at_btinternet.com or
  07798 623750