Quotations, Contracts and Tenders

Presentation bySimon 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?

• 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• 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

• 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:– 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:

– Contract period– Parties– Change– Pricing– Payments– Personnel– Disputes– Termination

The Overall Process

Before you seek quotations or tenders

Feasibilitystudy

CompetitionStrategy

ProjectPlan

What could we do?

How could we do it?

What is our plan?

The Overall Process

Seeking quotations/tenders

Procurement Strategy

Specification or Brief

The Competition

*External Bids*In-house Bids

Evaluation

How do we go about it?

What do we want?

Let us see what is on offer?

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?

The Feasibility Study

Corporate Factors

Future Demand

Best Practice

MarketResearch

Evaluation

Option Design

Implementation

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

The Project Plan

Determine Service

Requirements

ProduceSpecification/

Brief

Advertise theService/Supply

ReceiveExpressions ofInterest (PQQ)

ShortlistProviders

Issue Invitationto Tender/

Quote

Receive proposals

Evaluateproposals

Clarificationwith first

choice

Award theContract

Start theContract

Managethe

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

• 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

• 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 CostB: Service Delivery qualityC: Service Management qualityD: Approach to people issuesE: Implementation approachF: Flexibility for the futureG: Synergy with clientH: Commercial/contract terms

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)

Managing the Contract

What do you need to make it work?

• A clear specification• Sensible hand-over arrangements• Effective communications• Recognition of teething problems

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

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