Preparing a Tender from a Suppliers’ Perspective

1. Preparing a Tender from a Suppliers’ Perspective Peter Brennan Chairman, Bid Management Services peter@bidmanagement.ie 087 2412001

2. Procurement Reform • Office of Government Procurement (OGP) set up on 1 January 2014 • Achieving €500m in savings over next three years the strategic driver (in a market for goods and services worth €9bn) • Centralised purchasing in OGP, HSE, Defence, Local Government and Education • Category management approach (professional services, facilities, ICT, utilities, print etc.) • Fewer tenders for larger amounts • Clear commitment to work in interest of suppliers • A very welcomed initiative from a suppliers’ perspective

3. Some Metrics (Tender Scout) • 7,500 tenders published in 2013 (to a value of €12bn) • 28% awarded to non-Irish companies • 40,000 submissions made by 20,000 bidders • Only 10% of SMEs tender; 70% are not even registered • Only 55% of award notices above EU threshold published • Fewer than 2% of Irish companies win tenders abroad

4. The Market (above EU threshold)

5. What are the Issues? • Some rules not being applied • Templates not used systematically • Inadequate debriefings • Poorly defined specifications • Frameworks • Access to buyers • Need to encourage consortium bids • Cost of litigation/lack of appeals process

6. Some Rules not Being Applied • Circular 10/10 examples: required turnover should not be more than 150% of the value of the contract • Negotiated procedure used in inappropriate circumstances • Restricted procedure should be preferred option in vast majority of cases • Buyers often cite non-binding ‘guidelines’ • Inappropriate use of frameworks e.g. where a single supplier appointed • But 63% of SMEs admit they do not understand the basic rules

7. Templates not Used Systematically • SMEs welcome the deployment of templates • However, used as an exception and not as a rule: only 50% of buyers using them (2012) • Consistency of approach will result in better bids • Include Government’s prompt payment terms in template contracts • Stakeholders should be consulted about operation and revision of templates • Key role for OGP to ensure templates used where this is appropriate

8. Debriefings • Only 7% of suppliers get the feedback they request • 90% of those who get a debrief says it is of considerablebenefit • The ‘Dear John’ letter issues far too often • Buyers are hiding behind non-statutory nature of guidelines • Many examples of best practice: Revenue, SEAI and Garda Siochána • Specific guidelines on debriefings would help

9. Poorly Defined Specifications • Smart market soundings and/or information days for complex procurements helps both sides • Use standards e.g. FETAC • Do not rush publication of RFTs where doubts remain about outputs of required training for example • Clarify in RFT if budget approved • Above all else, critical that award criteria are clear and weightings proportionate and transparent i.e. There are no hidden sub-categories • Example: HSE RFT for supply of enhanced home care resulted in 260+ questions and recasting of the requirements – engagement helped both buyer and suppliers

10. Frameworks • Panels still being used despite guidelines • Restrictive procedure better option instead of single supplier frameworks • The way forward but will they be SME friendly as expenditure is consolidated? • Popular option: HSE framework for design services attracted 552 submissions with 35 selected • Use of lots (and by region if possible) will help SMEs • Encourage bid consortiums • Start major frameworks with market soundings • PINs should be published well in advance of major frameworks

11. Access to Buyers • Meet the Buyer events a great success • Dublin event (October 2013) attended by 747 suppliers and 130 buyers with €6m in contracts won • Suppliers’ feedback universally positive • Sectoral MTB events are being planned • Important that OGP remains accessible

12. Consortium Bids • SMEs need to be encouraged to form and join consortiums and trained to this end • Buyers need to pro-actively support consortium bids, especially for frameworks • Guidance should be published about promotion of bid consortiums • InterTradeIreland’s new initiative in supporting consortium bids will help

13. Litigation and Appeals • 35+ cases before NI High Court • Very few Irish cases due to cost of litigation • Having an OGP ‘Help Desk’ would benefit suppliers • Guidance needed about impacts of recent ECJ cases e.g. Pressetext where issue of what constitutes ‘a material change’ critical • OGP might consider low cost arbitration and mediation facility: NQAI’s appeals procedure an example of best practice

14. What Also Needs to be Done (1) • Put guidelines for tender competitions in excess of €25,000 on a statutory footing • Revise and update current guidelines (to reflect new EU Procurement Directives and OGP reforms) • More training for buyers and suppliers • More market soundings • More feedback between buyers and suppliers • Publish new suite ofPublic Procurement Plans

15. What Needs to be Done (2) • Publish contract award notices (with contract values) for all tenders in excess of €25,000 • Deeper direct engagement between OGP and suppliers • Clarify what constitutes a ‘material change’ • Publish detailed guidance about use of FOI in relation to procurement • More e-functionality on e-tenders • Improve collection and dissemination of statistical data

16. Win-Win • The procurement landscape is changing for the better • Buyers should help SMEs to leverage their successes in export markets • Encourage innovation for sub-€25K pilot projects • OGP on-going dialogue with representative organisations such as SFA and Chambers Ireland a positive development • InterTradeIreland’s Centre of Tendering Excellence and Go-2 Tender Programme will make a significant impact

17. Contact Peter Brennan Bid Management Services www.bidmanagement.ie peter@bidmanagement.ie 01 525 2650 / 087 2412001