5th November 2012, Vincent Hunt
Your (brief) guide to procurement routes and their
different timescales V4
.............................................................................................................................
Introduction ..................................................................................................... 2
Use of a PIN ................................................................................................... 2
What do the different procurement routes involve .......................................... 3
The open procedure .................................................................................... 3
The restricted procedure ............................................................................. 3
Competitive Dialogue .................................................................................. 4 Timescales for the various procurement options ............................................ 4
PIN .............................................................................................................. 4
Open Procedure.......................................................................................... 5
Restricted Procedure .................................................................................. 6
Competitive Dialogue (CD).......................................................................... 8
Framework arrangements ......................................................................... 10
Dynamic Purchasing System (DPS).......................................................... 11
Electronic Auctions.................................................................................... 12
Conclusion .................................................................................................... 14
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5th November 2012, Vincent Hunt
Introduction
For procurements above the OJEU threshold there are a range of different
options each with its own unique characteristics and timescales. These may be
summarised as:1.
2.
3.
4.
5.
6.
Open
Restricted
Competitive Dialogue
Framework
Dynamic Purchasing environment
Electronic Auction
These will be described in detail with the timescales applying. For all
procurement routes the Council has the option of issuing a Prior Information
Notice (PIN). In certain circumstance a PIN might be mandatory. Use of a PIN
For most of the procurements that the Council will undertake the use of a PIN is
voluntary. Why would we use a PIN?



To allow us to set up a soft market testing event in a equal opportunities
way- so that all the suppliers had the same chance to be consulted on a
forthcoming procurement
To build market interest in our procurement, particularly if there were a
significant number of similar procurements coming to the market at the
same time
To enjoy a concession from the EU in terms of reduced timescales for
most procurements
There is quite a high limit for the mandatory use of a PIN viz:-
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5th November 2012, Vincent Hunt
What do the different procurement routes involve
This section gives a brief overview of the different options before we go into
detail.
The open procedure
This allows all firms to submit a tender, without a formal pre- qualification
process (where e.g. you check their accounts or health and safety record). So
this might be quicker in terms of reduced complexity for the stages you have to
take suppliers through. However, in the worse case scenario you may find that
excessive supplier interest may involve you having to evaluate 20+ tenders. So
any saving in the process time may be removed by having to take a significant
number of firms through it.
Although you do not have to evaluate a tender from a firm that does not meet
your minimum standards for economic and financial standing or technical and
professional ability, telling a firm this at the end of a process in which they have
made a considerable investment is not ideal. One could imagine that it might
lead to legal challenges with the possibility of delays etc.
Therefore the restricted procedure is generally preferred.
The restricted procedure
The big change here is that suppliers are put through a Pre Qualification
process, generally through completing a Pre Qualification Questionnaire (PQQ).
This allows the Council to check potential suppliers for their financial strength,
experience in delivering the service, health and safety credentials, quality and
environmental scheme registration etc. The aim is to generate a list of suppliers
who are qualified to tender for the work.
The advantage is that any firm on the list is capable of doing a really good job
on the service being procured and that you know this before starting the tender.
Scrupulous care needs to be taken that the PQQ assessment is impartial, fair
and scientific; since the Council may well have to justify its selection following
questions from bidders who have not been selected.
Any legal challenge to a procurement selection has the potential to cause delay
and in the worse case scenario it may be necessary to stop the procurement
and start again.
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5th November 2012, Vincent Hunt
Competitive Dialogue
In this variation a period of competitive dialogue is inserted between PQQ and
the final tender. This is the opportunity to discuss key aspects with all suppliers
on an equal opportunities, but confidential basis. It is particularly important that
details of one supplier’s solution are not leaked to another.
This procurement route is typically used where the procurement is complex and
there are areas of uncertainty re risk partition or technical specification for
example. It is the most resource- intensive route for both councils and suppliers.
However, used for the right project it can trim significant costs off the tender by
removing uncertainty. It can also give suppliers the confidence to innovate.
Knowing that their emerging solutions are acceptable to the Council. In these
situations the payback of costs can be very good. Generally these
procurements do need to be marketed to generate “Biddability” and
consequently do benefit from soft market testing.
Timescales for the various procurement options
PIN
Generally the advice is as “soon as possible”, so for large procurement
programmes:
At the beginning of the Financial Year

As soon as a decision is made to go to market
In these scenarios the PIN should contain details of the supply/ service/
framework agreements during the next 12 months. It will need to contain the
Common Procurement Vocabulary (CPV) codes. This should enable potential
suppliers to see whether they are interested; but sometimes codes can be
broadly drawn which may lead to contact from suppliers with not quite the right
“offer”.
However, significantly you can use a PIN to benefit from shortened procurement
timescales (please see below).
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5th November 2012, Vincent Hunt
Open Procedure
Generally firms must be given at least 52 days to return their tender from the date of publication of the OJEU notice. But if you have a complex requirement you should allow more time. This can be reduced by 5 days if you are working electronically (giving unrestricted and full direct access via a website). This time can be reduced to 36 days and perhaps exceptionally 22 days if a PIN has been issued. If the Council is not operating electronically then bidders should send out the tender documents to bidders within 6 days of a request. Any clarifications by bidders (questions on e.g. the Council’s requirements of evaluation methodology should generally be answered 6 days before the tender return date). If the Council does not provide the tender documents in time as per the legislative obligations, tenderers should be offered an extension of time. In a similar vein should bidders need to inspect sites/ premises or documents a reasonable amount of extra time should be built into the procurement timescales for this. Care should be taken to offer all potential suppliers the same opportunity.
You do not have to evaluate a tender from a firm who has e.g. been convicted
of corruption; or if they do not meet your minimum standards for economic and
financial standing or technical and professional ability standards.
However, it might be better to use a PQQ (i.e. the restricted tender procedure)
to weed out unsuitable firms at the start of the process rather than after the end;
since this would save unsuitable firms the cost of completing a tender. It may
also save the council the trouble of defending a legal challenge from a
disgruntled supplier.
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5th November 2012, Vincent Hunt
Restricted Procedure
This procedure includes a PQQ process and accordingly firms are given a
shorter time of at least 37 days to respond to the OJEU notice. This is because
the first stage is to pass the PQQ tests and be selected to tender, so less time
is required because firms do not have to produce a tender form in this first
period.
This can be trimmed to 7 days if you are fully electronic (see above).
If “urgency” applies the time can be reduced to 15 days for traditional
procurement or 10 days if you are in compliant electronic mode.
You still have the ability to select on the basis of probity (fraud etc) and
economic & financial standing or technical or professional ability.
In addition to this general “power” you can create a select list of candidates to
bid for the work provided this is clear in you OJEU notice, stating the objective
and non- discriminatory criteria to be applied in order to limit the number of
economic operators. If you are selecting you should have a list of at least 5
bidders.
You must ensure that there are sufficient operators to ensure genuine
competition.
There is a danger zone. You cannot reinstate a de- selected bidder after the
PQQ even if one of the other bidders drops out.
You must allow at least 40 days for the return of tenders once the
documents are issued to the selected bidders
This may be reduced to 10 days where there is genuine urgency.
With a PIN, subject to conditions, you may reduce this to 36 days generally and
22 days as an absolute minimum. You may enjoy a 5 day reduction if you are
operating in a compliant electronic manner.
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5th November 2012, Vincent Hunt
If the Council does not provide the tender documents in time as per the
legislative obligations, tenderers should be offered an extension of time. In a
similar vein should bidders need to inspect sites/ premises or documents a
reasonable amount of extra time should be built into the procurement
timescales for this
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5th November 2012, Vincent Hunt
Competitive Dialogue (CD)
Where there the procurement is particularly complex:1. Cannot at the outset define the technical means capable of satisfying
your needs or objectives
2. Cannot specify either the legal or financial make up of the project or both
You can undertake Competitive Dialogue.
A descriptive document (DD) can accompany the OJEU notice.
There is the 37 days for participants to respond.
Councils are warned not to provide too short a response time if the service is
complex. The response time can be shortened to 7 days if you have a compliant electronic procurement system.
You can still undertake PQQ- the Council may select a minimum of three firms
to participate in the dialogue on the basis of “objective and non- discriminatory
criteria”. This can include economic and financial standing and technical and
professional ability.
After selection each bidder receives an Invitation to Participate in Dialogue
(ITPD) at the same time.
The ITPD must include: The date for the commencement of the CD
 Correspondence address- internet website if applicable
 The Council’s requirements on probity (fraud), economic and financial
standing and technical and professional ability
 The relative weightings of the evaluation criteria (unless published in the
OJEU notice)
In addition the Council must answer all clarifications at least 6 days before the
ultimate tender deadline.
It’s good to issue a draft contract and specification at the start of dialogue so
that bidders can comment during the dialogue sessions.
In dialogue you may: Discuss all aspects of the contract
o But must ensure equality of treatment between the bidders
o But must keep confidential each bidder’s solution
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5th November 2012, Vincent Hunt
You have the option, subject to publishing the process in advance, of deselecting bidders after the first stage of dialogue using your published
evaluation criteria (OJEU notice or DD). Thus, only certain firms make it through
to the second stage.
You must have a sufficient number of firms in the final stages to guarantee
competition.
The Council can continue dialogue until it can identify one or more solutions
capable of meeting its needs.
Before the final tender you must close dialogue. So at this point you formally
advise bidders that the dialogue is closing, and crucially this is the absolute end
of discussions.
The final tenders need to contain all the elements required and necessary for
the performance of the project on the basis of any solution presented and
specified during the dialogue i.e. bidders are told that radical changes to what
has been discussed will be frowned on in the final tender.
The Council should specify the final date for the receipt of tenders; return
address, language requirements in its Call for Final Tenders (CFT).
Note: - although you must allow a reasonable time for tender return you have
more discretion here as bidders have had a good exposure to the documents
already. However, the general principle of allowing reasonable time persists.
Importantly the clarification process post tender is strictly limited to fine tuning,
clarification, specification, additional information without any changes to the
basic features of the tender or CFT; which might distort competition or have a
discriminatory effect.
That is, no further negotiation under any circumstances.
The Council will choose the Most Economically Advantageous Tender (MEAT)
on the basis of the published criteria only.
The Council can engage in very limited clarification with the preferred bidder to
fine tune the contract.
The Council may legitimately pay the expenses of firms participating in dialogue
should it choose (to e.g. sustain interest in a difficult procurement)
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5th November 2012, Vincent Hunt
Framework arrangements
Any of the above procurement routes can be used to select a firm (or “economic
operator”) to be part of a framework.
Only firms who have taken part in the procurement can have work awarded to
them. So the danger zone here is: - you cannot add new firms to the framework
on an ad hoc basis.
When awarding work the terms of the contract under which the firms are
engaged cannot be substantially amended.
If you have only one firm in the framework you must stay within the limits of the
framework agreement.
You may ask that firm to supplement its tender before you award a particular
piece of work to e.g. provide extra clarity on a technical detail.
For a multi- firm framework there should generally be at least 3 firms.
You can award work on the terms laid down during the procurement without reopening competition.
Should the contract terms not cover all aspects of the work you should re- open
competition between the firms. This is colloquially called a “mini competition”
Framework agreements can have a maximum life of 4 years.
You should not use a framework agreement to distort competition.
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5th November 2012, Vincent Hunt
Dynamic Purchasing System (DPS)
Dynamic purchasing can only be carried out electronically.
Admission to the DPS shall be by the open system.
You would launch a DPS by an appropriate OJEU notice. With this you issue a
specification for the goods, works and services covered. Importantly you must
provide information on the electronic equipment which bidders will need to use
to participate. You may choose to add additional documents to better inform
bidders.
Firms are given a council web address through which they can interact with the
Council.
In order to enter the DPS firms have to make an “indicative tender”; and this
must be evaluated within 15 days. Firms can do this at any time.
Firms are admitted to the DPS when they have submitted an indicative tender
which satisfies the selection criteria. They should be advised as soon as
possible if they have been successful.
Firms may improve their indicative tender at any time in compliance with the
specification.
When you award work you must post a simplified contract notice in the OJEU.
Other firms may then submit an indicative tender and be given at least 15 days
so to do.
These firms must then be given a chance to join the DPS before the next
procurement.
Firms which win work must have the tender which best meets the award criteria
published at the launch of the DPS, but you may formulate those award criteria
more precisely for individual tenders.
A DPS cannot last for more than 4 years unless there are exceptional
circumstances.
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5th November 2012, Vincent Hunt
Electronic Auctions
You can launch this via the open, restricted, negotiated routes. You can also do
it by re- launching competition in a framework when not all contract terms are
clear or by a dynamic purchasing system.
You cannot use an electronic auction for services or works involving intellectual
performance e.g. design.
You must have a precise specification.
You can award on Price or Most Economically Advantageous Tender; although
you need to make this clear in the OJEU notice. Award on MEAT should be on
the basis of quantifiable elements (percentages or figures) which are published
at the start.
The specification must include:






Quantifiable elements
Limits on the values for quantifiable elements
The information participants will receive during each auction
A description of the auction process
Minimum improvements in bid
The electronic systems to be used
The technical specifications for connecting to the system
Before you start the auction you make an initial evaluation of the tenders; then
simultaneously invite all firms to improve their positions whilst sharing with them
the outcome of the evaluation of their initial tender.
Before you start the auction it is important that firms have the following
information:-
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5th November 2012, Vincent Hunt
Firms must have at least 2 days to prepare for the auction. Once you
commence firms can see their ranking at any time (like “E- Bay”). If the terms of
the procurement allow you can share a bidder’s information with the pool of
other bidders. This can include their price or other quantifiable elements. You
can say the number of firms participating, but must keep them anonymous.
Firms must know clearly the basis or timescale on which the auction is to be
closed.
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5th November 2012, Vincent Hunt
Conclusion
So you can see that there is a wide choice of procurement routes available
above the OJEU limit. Please ask for advice to inform your choice. Obviously
the approach to your procurement will need to vetted by a legal officer in order
to protect the Council from the risk of a legal challenge by a disgruntled bidder.
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