Selling to the Public Sector – helping
Leicestershire SMEs unlock their potential
Bob Moodie
NJM European, Economic & Management Consultants Limited
The Challenge
No. of Employees
% of business stock
Composition of business stock
1-9
10-49 50-249
250+
89.9
8.4
1.4
0.3
99.7%
0.3
SME
LSE
 According to the latest figures only 16% of the total
value of public contracts go to SMEs.
 75% of SMEs rarely or never bid for public sector
work
Where to find information/opportunities
Preferred
suppliers
We’re too young (we lack
trading history /track record)
Lack of previous public
sector experience
Price
We’re too small (contract is too big
as a proportion of our turnover)
Difficult to access
purchasers
Lack of bid skills
The timescale
is too tight
Process is time-consuming,
costly and complex
PQQ qualifiers –
policies & procedures
Location and
point of service
Difficult to find
consortia to bid with
Responding to the Challenge: Be Strategic
The Key Themes in Today’s Workshop
 The Procurement Context
 Identifying opportunities and raising business profile
 When to bid and when not to bid
 Preparing PQQs and tenders
In the present competitive environment it is vital to
understand that only a very professional approach at all
levels of the process will suffice if you want to be
successful
The Procurement Context: Regulatory Framework
EU Procurement Directives
European
National
Government Strategy
Statutory Requirements
Local
Council Procedures
Local Agreements
EU Procurement Thresholds
Supplies
Central Government
plus some ‘Quangos’
(see Schedule 1 List)
Other Public Sector e.g.
Local Authorities,
Universities, FE, etc
Services
Works
€125,000
€125,000
€4,845,000
(£101,323)
(£101,323)
(£3,927,260)
€193,000
€193,000
€4,845,000
(£156,442)
(£156,442)
(£3,927,260)
Thresholds applicable from 1st of January 2010 and are NET of VAT
Principles: Open competition, non-discrimination, equal treatment and
transparency.
Note: Exchange Rates
A New Environment
Political
Economic
The Comprehensive Spending Review
(2010)
NHS reorganisation
Glover Report - SMEs and Public
Procurement (2008): Transparency
Simplicity, Strategic & Measurement
Equality of Access (SME & Third Sector)
Coalition Government’s aspiration to award
25% of central contracts to SMEs
Price & Value for Money
Financial Environment
Contract Bundling (Economy of Supply)
Rationalisation & Framework Agreements
Ability to deliver economies and efficiency
savings
Social
Technological
Corporate Social Responsibility
Sustainability
Innovation & non contractual outcomes
Portals
E-tendering
E-auctions
Real time reporting
Context & Opportunity
 Public procurement, estimated at over £175 billion
per annum (13% of UK GDP)
 Leicestershire County Council spends over £300
million each year on goods, works and services.
Over the next three to four years, to 2012-13, the
Council will need to make savings of around £70m that’s 25% of its budget.
 Leicester City Council estimated procurement
budget for the Authority is £260 million p.a. (20072008).
 NHS Leicestershire & Rutland Procurement
Partnership influences spend of approximately £250
million on goods and services each year.
Local Procedures
Public Sector
Organisation
Threshold (goods &
supplies)
Procurement Process & Source
Leicestershire County
Council
<£1k
£1k – £20k
>£20k - £100k
1 Oral / Written Quote
3 Written Quotes or www.sourceleicestershire.co.uk
Request for Quotation www.sourceleicestershire.co.uk
>£100k - EU
threshold (£156,442)
Formal Tender Process www.sourceleicestershire.co.uk
Or www.espo.org
< £10k
£10k - £49k
Oral / Written Quotes (officer discretion)
3 Written Quotes or Formal Tender Process (officer
discretion)
£50K - EU threshold
(£156,442)
www.sourceleicestershire.co.uk or www.espo.org
Up to £250k (works
only)
www.exorgroup.co.uk/supplier
£5k - £25k
>£25k – EU threshold
(£156,442)
3 Oral / Written Quotes
Formal Tender via departments or www.in-tend.co.uk
Leicester City Council
University of Leicester
Procurement Procedure
Procedure
Characteristics
When the procedure is adopted
Open
All qualified applicants must be
given the opportunity to bid
For lower risk procurement where supplier
capability is less important or where the
focus is on price
Restricted
Two stage process with facility to
shortlist (PQQ + Tender)
Where capability of supplier is key
determining factor in the delivery of the
contract, market response likely to be
huge to allow short-listing
Negotiated
Two stage process with facility to
negotiate at second stage
Specification is not clear or some creative,
artistic or expert input is required.
Competitive
Dialogue
Two stage process with facility to
enter into a dialogue with potential
suppliers to consider potential
solutions and refine specification
before invitation to tender
Complex procurement where suppliers
expertise has significant impact on the
development of the specification
Framework
Agreement
Call-Off or Mini competition amongst
preferred suppliers
(selected from open/restricted
procedure)
Capability and Capacity is important and
is generally a recurring/constant
requirement (max 4 years; including
extension options)
Procurement Process Overview
Procure
Contract
Notice
EOI
Tender
Commission
Review
PQQ
Manage
Award
Evaluate
Contract Notices
KEY TENDER WEBSITES
Name:
Source:
Used by:
Eastern Shires
Purchasing
Organisation
www.espo.org
LAs, NHS in Leicestershire, OJEU
tenders
Source Leicestershire
www.sourceleicestershire.co.uk
LAs, NHS in Leicestershire
Leicestershire County & http://www.lcr.nhs.uk
Rutland NHS
NHS
In-Tend
www.in-tend.co.uk
Universities, Colleges, Schools,
LAs (some in Leicestershire and
nationally)
Blue Light
www.blpd.gov.uk
Police, Fire & Rescue Services
(including Leicestershire
Constabulary & across UK)
Supply to Government
www.supply2.gov.uk
www.supply2health.nhs.uk
Lower value government tenders
(*website will be replaced by
‘Contracts Finder’ March 2011)
OJEU
www.ted.europa.eu
Any public sector contract above
EU Threshold
A Strategic Approach
Identifying Opportunities & Raising Your Profile
Be Systematic & Get Organised
 What is your target market?
 In your target market who are the key buyers -




Personnel at Department level and Procurement
Officers (important for low value contracts that are not
formally advertised)?
Engage procurement personnel - make sure they know
you exist, seed ideas
Find out about approved (accredited) supplier lists
Register and publish on tender e-portals
Network (buyers/commissioners, meet the buyer
events)
Be Systematic & Get Organised
 Set up internal processes and individual(s) to monitor




tender portals, alerts, sources and review feedback
Search for potential business partners / collaborators /
subcontractors
Develop / improve your key policies e.g. Make them
relevant and articulating business benefit
Accreditation (e.g. CHAS, ISO, IiP etc)
Bid writing is a skill – invest the time in developing the
capability
A Strategic Approach
To bid or not to bid?
Strategic Decision Making
 Is the tender a good fit in relation to your company’s





activities?
Can you meet the eligibility criteria (technical
qualifications, policy compliance e.g. Quality Assurance,
Insurance) ?
Do you have a good track record in relation to the
opportunity?
Do you have the trading history (e.g. 2 years Accounts)?
Do you have the capability and capacity to deliver the
contract if successful?
Can you make sense of the budget and can you deliver
the contract on time?
Strategic Decision Making
 What are the risks?
 Who are your competitors?
 What percentage of your turnover does the contract
represent?
 Do you need a partner(s) or will you use
subcontractors?
 What is the percentage chance of success?
 Do you have the time and resources to devote to
preparing a good bid?
Strategic Decision Making
Solo or Collaborative Bidding?
 Form a consortium if:
 You don’t have the capability or capacity
 You can’t meet the 20% rule
 Options:
 Consortium
 Joint Bidding
 Lead Contractor & Subcontractor
 Legal basics
 Memorandum of understanding (MoU) / Partnership agreement /
(Non Disclosure agreement (NDA); Agreement not to compete in
other tender)
 Service level agreement (SLA)/contract
Consortia
Benefits:
Risks:
Increase capacity and scope to bid e.g.
Overcome PQQ impediments
Partner selection and getting Agreement
Shared trade history (combined capability
and capacity)
Trust relationship (how well do you know your
partner – can you be confident they can and will
deliver)
Business Development: Access new
clients and markets
Complex decision-making, loss of autonomy,
compromises and concessions
Spread risk
Sharing sensitive information
Mutual learning and innovative
approaches
Logistics (Co-ordinating bid)
Delivered additional added value (the
Logistics (Contract delivery)
whole is greater than the sum of the parts)
Improve chance of success
A Strategic Approach
Preparing the Bid
Preparing the PQQ/Tender
 Make sure you download/print off ALL
tender documents and read them
carefully (multiple times)
 Note the tender instructions, e.g. word
limits, submission format, deadlines and
evaluation criteria
PQQ: Example Scoring Framework
Section
Score Weighting
1
Organisation Details
N/A
2
Financial Information
N/A or Risk Based Assessment
Pass/Fail
3
Insurance
4
Business Activities
15%
5
Business Practices
30% (Total)
Pass/Fail
Health & Safety
5-10%
Quality Assurance
5-10%
Environmental Management
5-10%
Equality
5-10%
6
Requirement - specific
40%
7
Experience & References
15%
8
Professional & Business Standing
Pass/Fail
Tenders: Example ‘Scored’ Criteria
Score
Response Type
Reason indicated for Score
0
Non compliant response
No relevant information / solution provided in response
to contract requirements.
1
Unacceptable response
Partially compliant response but with serious
deficiencies in solution offered, indicating serious
difficulties / inability to deliver contract requirements.
2
Unsatisfactory response
Partially compliant response with shortfalls in solution
offered, indicating not all contract requirements could
be met and thus difficulty in delivery of the contract.
3
Acceptable response
Compliant response, indicating basic contract
requirements are met but not exceeded. Contract could
be delivered.
4
Good response
Compliant response, clearly indicating entire delivery
can be met and solution offers some limited benefits
beyond stated requirements.
5
Excellent response
Compliant response, bidder illustrated comprehensive
understanding of contract reqs. Proposed solution
provides significant additional benefits beyond stated
reqs.
Preparing the PQQ/Tender
 Get your team together, appoint a bid manager and conduct
detailed review and interpretation of tender requirements.
 Determine whether you require clarification of any aspect of the
tender and ask the question(s) allowing enough time for a
response.
 Check regularly to see if any questions/answers have been
submitted by competitors. Be aware that any question you ask will
be notified to other suppliers)
 Prepare work plan & allocation of roles/tasks/milestones with
reference to tender & submission deadline.
o NB: Build in time to review, refine and style bid
Preparing the PQQ/Tender
What is the Buyer looking for?
 Demonstrate a clear understanding of the brief (i.e. the challenges
are understood and addressed)
 Design a clearly structured tender response aligned against each
tender requirement and criteria (e.g. core, gateway and specific).
Ensure compliance!
 Methodology: clearly show who does what, why, when, how and
benefits from buyer’s perspective).
 Identify and demonstrate clearly your capability and the innovation
of your offer (USP) - can your offer exceed the contract
requirements and provide additional benefits, outcomes?
Preparing the PQQ/Tender
 Properly define appropriate resources / organisation (CVs of
identified team members / subcontractors / partners & management
structure).
 Project Plan (Schedule of Deliverables, Milestones and Resource
and illustrate with diagram where possible i.e. Gantt Chart)
 Explain Contract management and communication (i.e. how you
interface with the client to monitor project)
 Risk Assessment (illustrate how you provide buyer with a low risk
solution)
 Articulate pricing and value for money
 Compliance (Policies – NB You may be asked to explain your
policy commitments)
Preparing the PQQ/Tender
Standing Out from the Crowd
 Have you articulated ‘Why choose us?’
 Have you fully defined the key features, quality and
benefits of your approach?
 Have you used and made the most of recent and
relevant case studies to illustrate your track record?
 Have you presented advantages over your competitors?
 Have you gone the extra mile in manifesting your
understanding of the brief and the design of your
solution?
Costing the Proposal
 Personnel & Tasks
 Charging Rate(s) (Daily/Hourly) & Time
 Fixed Cost / Variable Cost
 Expenses & Disbursements
 Contingency
 VAT
 Innovative Cost Proposals
 Discounted Cost e.g. 5% early payment, economies of scale and
efficiency savings linked to contract term and/or number of
contracts (Lots) awarded
 Buyer comfort: Offer 10% Contract Price Withheld until
completion
Preparing the PQQ/Tender
 Do not attempt to find an “inside track” (canvassing)
 Respond by the correct date + time (electronic,
electronic + post, post?) avoid last minute submissions
 Ensure the submission is complete AND signed
including copies of requested documentation, e.g.
insurance certificates, policies, audited accounts etc
 Use tender envelope/label if provided and check if there
is a tender reference
 Look carefully at the evaluation criteria, scores and
“weighting”. This should influence time and effort in
preparation of answers
Preparing the Tender: Bid Writing
Language & Style:
 Write in plain English
 Avoid jargon and unexplained abbreviations
 Use ‘active’ and not ‘passive‘ verbs, refer to ‘we’ and
‘you’
 Short sentences and paragraphs; use introductory
headers
 Punctuation and spelling really matter
Aim for clarity, brevity, readability and persuasion
♪♫ Accentuate
♪
the Positive ♪♫♪
What QA does your company operate? If no accreditation is held
please explain why not and what alternative steps you take to
ensure quality at work?
Bad Answer:
 “We operate our own quality system. We have determined that
formal accreditation is inappropriate to our company’s needs.
Complaints are the responsibility of the Managing Director.”
Good Answer:
 “We regard quality as a vitally important part of our business
activity and we operate a comprehensive and strict internal quality
assurance process covering all aspects of our business activity
(details can be found in Appendix 2). We are committed to a
process of continuous improvement and we are in the process of
applying for ISO 9001 (we expect to be assessed in May of this
year)”
Avoiding a Poor Score
Common reasons for a poor score:
1.
Failure to follow the instructions.
2.
Writing by committee, no narrative flow and lack of
control/ownership
3.
Incomplete or missing answers/sections.
4.
Supporting documentation incomplete
5.
Repeating answers or referring to ‘see above’ (questions are
rarely repeated)
6.
Over emphasising what you sell, rather than what they are
looking to buy
7.
Recycling old tenders ‘Cutting & pasting’!
8.
Generic PQQ/Tender response
9.
Providing response on general capability instead as opposed to
specific contract requirements.
Buyer Preferences
LIKE
Don’t like
Concise and precise language
Wordy tenders, Inconsistencies and errors,
poor use of grammar
Clear structure (esp. Methodology)
Poor methodology (failure to define who
does what, where, when, why and how)
Challenges have been understood and
properly addressed
Deviation from defined requirements, lack
of understanding of client requirements and
failure to answer questions
Relevant background information
Lack of detail/explanation or ‘data dump’
Properly defined & appropriate resources
Unclear who will be involved in delivery
Systems & procedures
Exaggerated and unsubstantiated claims
Innovation – or the opposite (tradition)
Poor evidence of reliability
Risk assessment (mitigations)
No risk assessment
Case studies & references
Irrelevant case studies
Be...
Compliant
• Tender Format & Requirements
• Policies, Insurances, etc
Persuasive
• USP
• Added Value and/or Innovation
Competitive
• Quality
• Price
Any questions?
 Further one to one support:
 bob@njm.co.uk
 vicky@njm.co.uk
 0191 284 4949