Quotations, Contracts and
Tenders
Presentation by
Simon Gresham
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
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?
Current Agenda?
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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
Current Issues
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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?
Ground Rules
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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 user’s 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
Definition: Quotations
• Used for smaller procurements – check Standing
Orders regarding de-minimis levels
• Follows same processes as tendering:
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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
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
Definition: Contracts
• The document that underpins the award of
service/supply
• Made up of a number of essential conditions:
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Contract period
Parties
Change
Pricing
Payments
Personnel
Disputes
Termination
The Overall Process
Before you seek quotations or tenders
Feasibility
study
What could
we do?
Competition
Strategy
Project
Plan
How could we
do it?
What is our
plan?
The Overall Process
Seeking quotations/tenders
Procurement
Strategy
How do we
go about it?
Specification
or Brief
What do we
want?
The
Competition
*External Bids
*In-house Bids
Let us see what is
on offer?
Evaluation
The Overall Process
After you have selected a provider
The Client Side
Contract
Management
Are we set up to
manage it?
Let us now
manage it?
Implementing
the partnership
Let us see how
well we did?
The Feasibility Study
Corporate
Factors
Future
Demand
Evaluation
Option
Design
Implementation
Best
Practice
Market
Research
Feasibility Study Options
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Close down
Re-structure/re-organise
Make internal efficiency improvements
Partnering with neighbouring council - SLA
Benchmark
Test the market
Outsource
Privatise
Joint venture
The Project Plan
Determine
Service
Requirements
Produce
Specification/
Brief
Evaluate
proposals
Receive
proposals
Clarification
with first
choice
Award the
Contract
Advertise the
Service/Supply
Receive
Expressions of
Interest (PQQ)
Issue
Invitation
to Tender/
Quote
Shortlist
Providers
Start the
Contract
Manage
the
Contract
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
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?
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?
Specification Contents
1. Introduction / Background
2. Service Requirements
3. Service Standards
4. Supporting Appendices/Data/Fact Sheets
The Invitation to Tender/
Provide Quotations
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Letter of invitation with instructions
Draft Contract Conditions
Specification/Brief
Tender/Quotation Response document
Evaluation criteria and weighting for quality
and price
Evaluation
The Principles
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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
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
Mobilisation Activities
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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)
Managing the Contract
What do you need to make it work?
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A clear specification
Sensible hand-over arrangements
Effective communications
Recognition of teething problems
Managing the Contract
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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
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@btinternet.com or 07798 623750