Procurement Guidance Note
02/12
PUBLIC PROCUREMENT:
A GUIDE FOR SMALL AND
MEDIUM SIZED
ENTERPRISES (SMEs)
17th February 2012
PROCUREMENT GUIDANCE NOTES
Northern Ireland Public Procurement Policy was approved by the Executive in
2002. In approving the policy the Executive took the decision that legislation
was not necessary to ensure that Departments, their Agencies, non-
Departmental Public Bodies and Public Corporations complied with the policy.
Instead it considered that compliance could be achieved by means of
administrative action.
These Procurement Guidance Notes are the administrative means by which
the Northern Ireland Public Sector is advised of procurement policy and best
practice developments. They are developed by Central Procurement
Directorate (CPD), in consultation with the Centres of Procurement Expertise
(CoPEs), and are subject to the approval of the Procurement Board.
Once endorsed by the Procurement Board, they are issued to Departments
for implementation and copied to CoPEs to develop, if necessary,
underpinning procedures supporting the implementation of this guidance in
their particular sector.
CPD is responsible for disseminating advice and guidance to the NI public
sector on public procurement policies and for monitoring implementation.
Procurement Guidance Notes are also published on CPD’s website.
The following Procurement Guidance Note was endorsed by the
Procurement Board and issued with effect from 17 February 2012 for use
by those bodies covered by Northern Ireland Public Procurement Policy.
2
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CONTENTS PAGE
1.
PURPOSE ...............................................................................................5
2.
BACKGROUND .......................................................................................5
What is a Small and Medium Sized Enterprise?................................5
3.
WHAT IS THE PUBLIC SECTOR? ..........................................................6
What does the public sector buy?......................................................6
4.
THE LEGISLATIVE AND POLICY FRAMEWORK FOR
PROCUREMENT.....................................................................................6
The legislation ...................................................................................7
NI Public Procurement Policy ............................................................7
5.
IS PUBLIC SECTOR BUSINESS RIGHT FOR YOUR SME?..................8
Issues of scale and size.....................................................................8
How can SMEs participate in public sector business?.......................9
Sub-contracting opportunities ............................................................9
Consortium bids.................................................................................9
6.
A TYPICAL PROCUREMENT PROCESS .............................................10
7.
HOW AND WHERE ARE TENDERING OPPORTUNITIES
PUBLICISED? .......................................................................................12
Official Journal of the European Union (OJEU) ...............................12
Tendertap -Tender Alert Service - Invest NI ....................................12
eSourcing NI....................................................................................12
Low Value Contracts........................................................................13
Meet the Buyer events.....................................................................13
Investment Strategy Northern Ireland (ISNI) Information Website...13
Reserved contracts for supported factories and businesses ...........14
8.
SELECTION ..........................................................................................15
Invitation to tender (ITT), evaluation and award ..............................15
9.
UNSUCCESSFUL BIDS ........................................................................15
10. CONTRACT TERMS AND CONDITIONS .............................................16
11. DELIVERING THE CONTRACT ............................................................16
Getting paid on time – what to expect from CAs..............................17
12. COMPLAINT HANDLING ......................................................................17
13. CONCLUSION.......................................................................................18
14. FURTHER INFORMATION....................................................................18
Annex A TYPES OF PROCUREMENT PROCEDURES ...............................19
The Open Procedure .......................................................................19
The Restricted Procedure................................................................19
The Competitive Dialogue Procedure..............................................19
The Negotiated Procedure...............................................................20
Framework Agreements ..................................................................20
Annex B USEFUL WEBSITES.......................................................................22
3
LIST OF ABBREVIATIONS
CA
Contracting Authority
CoPE
Centre of Procurement Expertise
CPD
Central
Procurement
Directorate
DDA
Disability Discrimination Act
DEL
Department for Employment and Learning
DETI
Department of Enterprise, Trade and Investment
DFP
Department of Finance and Personnel
EU
European
Union
GCCG
Government Construction Clients Group
ISNI
Investment Strategy Northern Ireland
ITT
Invitation to Tender
MEAT
Most Economically Advantageous Tender
NDPB
Non Departmental Public Body
NI
Northern
Ireland
OJEU
Official Journal of the European Union
PCL
Procurement Control Limits
PQQ
Pre Qualification Questionnaire
SEE
Social Economy Enterprises
SME
Small and Medium sized Enterprises
TED
Tenders Electronic Direct
TFEU
Treaty on the Functioning of the European Union
UK
United
Kingdom
VfM
Value for Money
4
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1.
PURPOSE
1.1
This guide aims to help Small and Medium sized Enterprises (SMEs)
increase their knowledge and understanding of public sector
procurement (supplying goods, services and works to the public sector)
and in so doing, help them to develop their capability to compete
successfully for public sector contracts. Public sector procurement can
be daunting and readers will find the additional guidance signposted
throughout this document to be essential reading. The overview of
procurement procedures at Annex A will also be helpful.
2.
BACKGROUND
2.1
What is a Small and Medium Sized Enterprise?
2.2
The European Commission’s definition of what constitutes an SME is
based on a combination of the following criteria: number of salaried
workers, turnover, balance sheet and independence
1. A diverse group
of businesses fall into the SME category, ranging from sole traders to
businesses and social enterprises.
2.3
In the Northern Ireland (NI) context, the commonly used definition is
that SMEs have fewer than 250 employees. The table below shows
the sub-categories of SMEs ranging from micro to small and medium-
sized enterprises as defined by Department of Enterprise Trade and
Investment (DETI).
Enterprise Category
Number of Employees
Micro (a sub-set of small)
< 10
Small <
50
Medium sized
50 < 250
Large 250+
2.4
Within NI it is estimated
2 that there are 67,955 businesses, with
medium sized businesses (50 - 249 employees) making up 1.5%, small
businesses (fewer than 50 employees) accounting for 98.2% and large
businesses (250+ employees) making up the remainder. Micro
businesses (with less than 10 employees) accounted for the majority of
the NI total with a share of 89%. Almost 48% of all businesses in NI in
2011 were registered as ‘Sole Proprietors’. Micro-businesses therefore
have a particularly prominent place in the local economy.
1
http://ec.europa.eu/enterprise/policies/sme/files/docs/sme_pack_en_2008_full_en.pdf
2 The Inter Departmental Business Register (IDBR) – Edition 14 (29 December 2011) contains
information on all businesses in the United Kingdom which are VAT registered and/or operating a PAYE
scheme. http://www.detini.gov.uk/idbr_publication_december_2011-2.pdf
5
link to page 5
3.
WHAT IS THE PUBLIC SECTOR?
3.1
The public sector employs approximately 31%
3 of the NI workforce and
includes:
Central government departments and agencies;
The health sector;
The education sector;
NI Assembly;
Public Corporations and Companies eg Northern Ireland Transport
Holding Company (which includes Translink which buy goods,
services and works for NI Railways, Citybus and Ulsterbus) and
Northern Ireland Water;
Councils (District, Borough or City); and
Cross Border Agencies.
3.2
The public sector in NI spends approximately £3bn a year on
procurement. A spend of this magnitude offers considerable
opportunities for SMEs to provide goods, services and works.
3.3
What does the public sector buy?
3.4
Given the scale of the public sector it is impossible to detail the full
range of supplies, works and services that public bodies purchase,
however it includes common areas such as:
Advertising
● Plant and Machinery
Chemicals/Reagents
● Postal & Telecoms Equipment
Clothing and Accessories
● Printing/Reprographic Services
Construction/Maintenance ● Publications
Consultancy
Services
● Public Utilities
Energy
● Recruitment and Personnel
Environmental
Services
● Rental, Leasing or Hire Services
Facilities
Management
● Repair/Maintenance Services
Financial
Services
● Research and Development
Food
stuffs
● Transportation Equipment
Furniture and Fittings
● Transport and Travel Services
Office Machines and Supplies
4.
THE LEGISLATIVE AND POLICY FRAMEWORK FOR PROCUREMENT
4.1
As an SME applying for public sector contracts, it is important to
understand that there are both legislative and policy requirements
which apply to NI public sector procurement. The next section provides
3 The Inter Departmental Business Register (IDBR) – Edition 14 (29 December 2011) contains
information on all businesses in the United Kingdom which are VAT registered and/or operating a PAYE
scheme. http://www.detini.gov.uk/idbr_publication_december_2011-2.pdf
6
link to page 6 link to page 7 link to page 7 link to page 7
an overview of these areas. More detailed information on the context
within which NI Public Procurement Policy operates, the structure and
operation of procurement in the public sector and the roles and
responsibilities of key players within the procurement process, can be
found in the NI Public Procurement Policy Handbook
4.
4.2
The legislation
4.3
The award of regulated public procurement contracts within the
European Union (EU) Member States is subject to the EU Procurement
Directives, the purpose of which are to open up the public procurement
market and to ensure the free movement of goods, services and works
within the EU. The Directives and implementing United Kingdom (UK)
Regulations
5 set down procedures and standards (based on openness,
non-discrimination and competition) for choosing tenderers and
awarding contracts with an estimated value above the EU thresholds
6.
4.4
All public sector procurement contracts within the EU, irrespective of
value, are also covered by the Treaty on the Functioning of the
European Union (TFEU, previously known as the European Community
Treaty) principles of non-discrimination, equal treatment and
transparency.
4.5
NI Public Procurement Policy
4.6
The NI Public Procurement Policy
7 was agreed by the NI Executive in
May 2002 and applies to Northern Ireland Departments, their Agencies,
Non Departmental Public Bodies (NDPBs) and Public Corporations. A
full list of the bodies which are subject to NI Public Procurement Policy
can be found in the annex to the Policy.
4.7
Responsibility for the development, dissemination and co-ordination of
Public Procurement Policy in NI rests with the Procurement Board.
4.8 Councils in Northern Ireland operate under a separate framework of
accountability which means that compliance with NI Public
Procurement Policy is on a voluntary basis. However, they are
required to comply with the UK Public Procurement Regulations.
4.9 Central
Procurement
Directorate’s (CPD’s) responsibilities include the
development, dissemination and review of procurement policy, and the
promotion of best practice within the NI Public Sector.
CPD also has
two Centres of Procurement Expertise (CoPEs); one for the
4
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-
legislation/cpd_policy_ni_public_procurement_policy_handbook.htm
5
http://www.dfpni.gov.uk/index/procurement-2/index/procurement-2/cpd/cpd-policy-and-legislation.htm
6
http://www.ojec.com/Threshholds.aspx
7
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-legislation/cpd-ni-public-procurement-
policy-version-5.htm
7
link to page 7
procurement of supplies and services and one for construction projects,
who procure on behalf of Departments, their Agencies and NDPBs.
4.10 In addition to CPD there are a number of other CoPEs, each with its
own unique procurement portfolio. These are Roads Service, NI
Water, Translink, Health Estates, Procurement and Logistics Service
(which procure supplies and services for the Health Sector), the
Education and Library Boards and the NI Housing Executive.
5.
IS PUBLIC SECTOR BUSINESS RIGHT FOR YOUR SME?
5.1
Public sector contracts represent a valuable business opportunity for
many SMEs. Public sector organisations are good customers. They
ensure fairness, honesty, transparency and professionalism in the way
they choose suppliers. They are also long-standing, stable customers,
and have to pay promptly (refer to paragraph 11.7), in line with agreed
contract terms.
5.2
A first and fundamental consideration for an SME is to decide if public
sector business fits the resources and capability of their own business
and how this links to their objectives.
5.3
Market research can assist the SME in deciding which, if any, public
sector business opportunities to pursue. The services provided by
Invest NI’s Business Information Centre
8 may be of particular use in
this regard.
5.4
In addition, the Enterprise Europe Network offers a “one-stop shop” for
companies seeking to undertake work in Europe. The network
provides help on researching markets, identifying new customers, or
suppliers and resolving European business issues. It also advises on
sources of tender information, as well as providing tender alert
services. Further information on the network is available from
www.enterpriseeuropeni.com.
5.5
Issues of scale and size
5.6
Public sector procurement is not suitable for all SMEs. It can be
challenging to win business in competition with many others trading in
a similar field. This is especially the case for small or growing
businesses, where there are significant risks and challenges.
5.7
An SME also needs to decide how many bids to make, and in which
sectors of business, so that it can grow without becoming
overstretched. Attending “Meet the Buyer” events can provide an
insight into public sector procurement processes and provide an
8
http://www.investni.com/index/grow/strategic_development/business_information_services.htm
8
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opportunity to meet informally with buyers. These events are mainly
hosted by industry bodies and supported by the public sector.
5.8
How can SMEs participate in public sector business?
5.9
One message is clear from those who have followed this path before:
the best course of action is to take one careful step into the field.
SMEs could consider going it alone taking on a modest contract.
Alternatively, opportunities may be available as a sub-contractor, or as
a member of a consortium, both of which are addressed further below.
5.10
Sub-contracting
opportunities
5.11 SMEs wishing to enter the public sector market can benefit from
participation in public sector contracts as a sub-contractor. Where
possible, Contracting Authorities
9 (CAs) will encourage main
contractors to publish opportunities, for sub-contracting within their
supply chain on the main contractor’s website and/or, where
appropriate, in the local Press. Looking for contract notices published
in the Official Journal of the European Union (OJEU) is another means
of identifying possible opportunities within the supply chain.
5.12 In support of this, the Government Construction Clients’ Group (GCCG)
has agreed a number of actions to monitor main contractors’ delivery of
their commitments
10, advertising supply chain opportunities, and
adhering to the ‘Code of Practice for Government Construction Clients
and their Supply Chains’ (including the Fair Payment Charter).
5.13
Consortium bids
5.14 Membership of, or forming, a consortium may also provide a suitable
alternative route for SMEs to bid for public sector contracts.
5.15 A consortium, in public procurement terms, describes a group of
suppliers who come together to bid for a contract. While the term is
often used where formal legal and financial arrangements exist
between the participants, this is not a necessary condition for the
consortium to be able to bid for public contracts. Any informal grouping
of suppliers can bid as a consortium and the EU Procurement
Directives provide that a consortium bidding for a public contract can
be assessed based on the collective capabilities of all of the
participants in the consortium.
9 The definition of Contracting Authorities includes e.g. NI Government Departments and Councils. A
full list of Contracting Authorities may be found in Regulation 3 of The Public Contracts Regulations
2006 (SI 2006 No 5, as amended)
10
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-
suppliers/cpd_construction_industry_forum_task_group_report.htm
9
5.16 The CA however needs to be confident that the consortium members
can work together in the manner required and this can be tested
through appropriate questions in the selection process (see Section 8).
5.17 Clear descriptions of the capabilities required in contract
documentation will help suppliers identify how they can combine their
skills to best effect. Where a CA awards a contract to a consortium, it
may, if it is justified for satisfactory performance of the contract and
before entering into a contract or as a term of the contract, require the
consortium to form a legal entity.
6.
A TYPICAL PROCUREMENT PROCESS
6.1
The following diagram (Figure 1) shows a typical procurement process
within the public sector and is discussed in further detail in the pages
that follow. Low-value specific purchases will follow a simplified
version to that described below (see paras 7.12 – 7.14).
6.2
The tendering process used should be proportionate to the size, risk
and complexity of the procurement in question. This approach will help
to reduce barriers to all potential suppliers, including SMEs. It must be
remembered however that the procurement process is a competition,
with the majority of contracts being awarded on the basis of the Most
Economically Advantageous Tender (MEAT).
6.3
MEAT is the combination of quality and price. The Public Procurement
Regulations 2006 set out the criteria which a CA may use to determine
that an offer is the most economically advantageous. The criteria may
include quality, price, technical merit, aesthetic and functional
characteristics, environmental characteristics, running costs, cost-
effectiveness, after sales service, delivery date and delivery period or
period of completion.
6.4
As an alternative to MEAT, contracts may be awarded subject to Head
of CoPE approval on the basis of lowest price, where quality
requirements have been assured through contract specification(s) or
other appropriate mechanism(s)
10
Figure 1. A typical procurement process within the public sector
Strategic development and identifying need
The CA decides what is needed and, if appropriate, dependant on the value
of the contract, prepares the business case. In most cases, it will liaise with
CPD, or a CoPE to decide how the procurement process will be conducted,
taking account of legislation, NI
Public Procurement Policy and market
conditions. The types of procurement
procedures which may be used, e.g.
open, restricted etc, are given in Annex A.
Specification, inviting tenders and selection
A specification is drawn up and the CA invites suppliers to put in an offer, or
tender. Tender opportunities (above £30k) will be advertised on eSourcing
NI and depending on value, also in the Official Journal of the European
Union (OJEU), (see section 7.3 below).
Following receipt of tenders/offers, an initial selection process will take
place to identify those suppliers who meet the minimum standards of
capability and capacity to deliver the particular contract.
In some cases, such as a Restricted Procedure, suppliers may have to pre-
qualify before being formally asked to submit a tender. This will require the
completion of a Pre-Qualification Questionnaire (PQQ), which incorporates
information requirements about financial status and previous experience
etc. Suppliers who have successfully pre-qualified are then invited to
tender (Invitation to Tender, ITT). (See Annex A for details of types of
procurement processes).
Tender evaluation
Submitted tenders are evaluated against the published award criteria e.g.
price, methodology, time of delivery.
Awarding the contract
The CA awards the contract on the basis of MEAT. Suppliers will be
notified of the outcome and will be provided with a written debrief to assist
them in improving their approach for future competitions.
Contract management
Depending on the nature of the contract, the public body, or the CA, will
work in partnership with the successful supplier to manage the
performance of the contract.
11
link to page 9 link to page 12 link to page 12 link to page 12
7.
HOW AND WHERE ARE TENDERING OPPORTUNITIES PUBLICISED?
7.1
Subject to the CA’s legal obligations, the form of procurement
competition (see Annex A) should be proportionate to the value, nature
and complexity of the supplies, works or services required.
7.2
NI Departments, their Agencies, NDPBs and Public Corporations,
which are subject to NI Public Procurement Policy, have in place
Procurement Control Limits (PCLs) for the procurement of supplies,
works and services. The PCLs recommend the optimum level of
tenders/quotes that should be sought to ensure that the cost of the
procurement is efficient whilst still achieving value for money (VfM)
through competition. Detailed information on PCLs is available in
Procurement Guidance Note (PGN) 03/10
11.
7.3
Official Journal of the European Union (OJEU)
7.4
Almost all public procurement contracts for business worth more than
the EU threshold
12 must be published in the supplement of the OJEU.
The threshold changes every two years and varies according to the
type of contract (supplies, works or services) and the public sector
entity
(Central Government, another public authority, or Utility). The
OJEU can be accessed via Tenders Electronic Daily (TED), free of
charge, from: http://ted.europa.eu/TED/main/HomePage.do
7.5
Copies of the OJEU (available in CD-ROM format) can also be
obtained from The Stationery Office Ltd at www.tso.co.uk
7.6
Tendertap -Tender Alert Service - Invest NI
7.7 Tendertap
13 is the new Tender Alert Service provided by Invest NI
which sends companies’ daily alerts for relevant tender opportunities
published in TED, as well as some smaller value UK and local
opportunities. The service currently costs £100 plus VAT annually.
Under the previous tender alert service, which was free of charge in
2010, some 58 companies won 114 contracts potentially worth £239
million.
7.8
eSourcing NI
7.9 eSourcing
NI
14 is a web based portal which provides access to Central
Government procurement opportunities. This increases accessibility
for SMEs, Social Economy Enterprises (SEEs) and other potential
suppliers who wish to do business with the public sector. The portal
11
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-legislation/content_-_cpd_-_policy_-
_procurement_guidance_notes.htm
12 Current thresholds can be fou
nd at http://www.ojec.com/Threshholds.aspx
13
http://www.enterpriseeuropeni.com/inx/services/tender_information.asp
14
https://e-sourcingni.bravosolution.co.uk/web/login.shtml
12
provides secure, web-based tools for buyers and suppliers to conduct
the tendering process online. Using eSourcing NI helps to reduce the
time and cost of tendering, and simplifies and standardises the
tendering process.
7.10 Suppliers can view current opportunities on the portal and then, if
interested, register to respond to a particular tender. Registration is
free and is only required once. As part of the registration process,
SMEs should also specify the categories of procurement against which
they might be interested in providing supplies, services and, where
appropriate, works. Buyers can then search the system to help identify
potential suppliers for specific categories of procurement.
7.11 Advertisements in newspapers, under “What’s New”, can also be used
to highlight new tender opportunities and direct potential suppliers to
the eSourcing NI site.
7.12
Low Value Contracts
7.13 Where a contract does not require advertising, i.e. below £30k (as per
the PCL guidance, paragraph 7.2); buyers can make use of the
categorisation on e-Sourcing NI to help them identify potential
suppliers.
7.14 e-quotes
is an
electronic service which allows accepted suppliers to bid
for printing work which has been requested by CPD clients i.e,
Departments and Agencies. Potential suppliers can obtain an e-quotes
pack by e-mailing
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx@xxxxx.xxx.xx. Potential
suppliers should then return the requested documentation and samples
to the Communication and Advertising Sector Team in CPD. After
assessment and if accepted, suppliers will be notified of this
acceptance and will be forwarded a user name and password to
access e-quotes.
7.15
Meet the Buyer events
7.16 Representatives from CPD and the CoPEs support “Meet the Buyer”
events across NI hosted by a range of organisations including Invest
NI, InterTrade Ireland and Councils etc, covering the supplies, services
and construction works sectors. These well attended events provide
opportunities for suppliers to gain information on future tendering
competitions, how to access opportunities on eSourcing NI and may
offer one to one interviews.
7.17
Investment Strategy Northern Ireland (ISNI) Information Website
7.18 The ISNI Information Website, launched in June 2009, also provides
public access to information on infrastructure investment programmes,
projects and procurements, including key milestone dates. The
website can be accessed at www.isni.gov.uk
13
link to page 12 link to page 14 link to page 14
7.19
Reserved contracts for supported factories and businesses
7.20 Provision exists within the UK Procurement Regulations
15 to enable
CAs to reserve the right to participate in public contract award
procedures to supported factories and businesses, or to economic
operators, which operate supported employment programmes. These
terms are defined in the Regulations as follows:
A supported business is: ‘A service where more than 50% of the
workers are disabled persons who by reason of the nature or
severity of their disability are unable to take up work in the open
labour market.’
A supported employment programme is: ‘A scheme under which
work is provided for disabled persons and where more than 50% of
the workers so supported are disabled persons who by reason of
the nature or severity of their disability are unable to take up work
in the open labour market.’ Under the EU Directive, these are
known as sheltered employment programmes.
A supported factory is: “An establishment where more than 50% of
the workers are disabled persons who by reason of the nature or
severity of their disability are unable to take up work in the open
labour market.”
7.21 The Disability Discrimination Act 1995 (DDA) defines
16 a disabled
person as someone with “a physical or mental impairment which has a
substantial and long-term adverse effect on his/her ability to carry out
normal day-today activities.” Further advice can be sought from the
Department of Employment and Learning (DEL)
17 on whether or not
your organisation can be classified as a supported factory or business.
7.22 ‘Reserving’ a contract means that only supported factories and
businesses or economic operators operating supported employment
programmes can bid for that particular contract. These organisations
can be from anywhere in the EU, but where a contract has been
reserved under this provision, the process must allow for fair and open
competition amongst the suppliers that bid for such contracts.
Contracts cannot therefore be reserved for a specific organisation and
all bids from supported factories and businesses submitted under the
reserved contracts arrangements are still assessed on a VfM basis,
with award to the bid offering MEAT.
15 Regulation 7 of The Public Contracts Regulations 2006 (as amended) and Regulation 10 of The
Utilities Contracts Regulations 2006 (as amended), available at:
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-legislation.htm
16 Changes to coverage of the definition of disability were made to the DDA by the Disability
Discrimination (Northern Ireland) Order 2006. This came into effect on 31 October 2007.
http://www.ofmdfmni.gov.uk/index/equality/disability/new-disability-discrimination-order.htm
17 Disablement Advisory Service
http://www.delni.gov.uk/index/finding-employment-finding-staff/fe-fs-
help-to-find-employment/das/nddp-contact-details.htm
14
link to page 14 link to page 15
7.23 Where a contract is reserved, the CA should indicate in the OJEU
notice that the contract is “reserved for sheltered workshops under
Article 19 of the Directive”.
8.
SELECTION
8.1
The selection stage is a precursor to the evaluation of tenders. Some
selection processes also require the completion of a Pre-Qualification
Questionnaire (PQQ) which can help to make the selection process
more manageable, transparent and efficient for all parties. The number
of questions on the PQQ will be proportionate to the scale and
complexity of the project.
8.2
A detailed PGN 04/10 on the Selection and Pre-Qualification of
Contractors is available from CPD’s website
18.
8.3
Suppliers will be notified of the outcome of the selection stage, and
unsuccessful candidates provided with written debrief information..
Further advice on information disclosure throughout the procurement
process is available in PGN 01/1018.
8.4
Invitation to tender (ITT), evaluation and award
8.5
Shortlisted suppliers will be provided with ITT documents, with clear
instructions on how they should submit their tenders, and the deadlines
for receipt. The ITT will include detailed requirements, instructions to
tenderers, contractual terms and conditions, any associated pricing and
technical schedules, and award criteria and weightings.
8.6
The CA will award the contract to the tenderer who provides the MEAT.
Further information on Procedures and Principles for the Evaluation of
Tenders is available in PGN 02/0918.
9.
UNSUCCESSFUL BIDS
9.1
It is a requirement under the UK Procurement Regulations to provide
feedback even when not sought by a supplier. For those contracts
below the EU thresholds, CoPEs should be able to provide general
advice and feedback on the tendering process on request.
9.2
If unsuccessful, the SME can use the information provided by the CA to
see how it can improve its approach to future competitions. The
information disclosed by the CA has been significantly impacted by the
Remedies Directive (2007/66/EC). This was transposed into UK law
via the Public Contracts (Amendment) Regulations 2009 and Utilities
Contracts (Amendment) Regulations 2009
19. These took effect from 20
18
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-legislation/content_-_cpd_-_policy_-
_procurement_guidance_notes.htm
19
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-legislation.htm
15
link to page 15
December 2009 and set out the information to be given to unsuccessful
tenderers and the rules concerning the minimum mandatory standstill
period (sometimes referred to as the Alcatel period) in relation to
contracts over the EU Thresholds.
9.3
The standstill period refers to the time between a buyer notifying
tenderers of the decision to award a contract and contract signature.
This is to allow tenderers time to review the award decision and
provides an opportunity for unsuccessful suppliers, to decide whether
to seek further information concerning the award decision, prior to
contract award. SMEs should refer to PGN 01/10, entitled ‘Information
Disclosure throughout the Procurement Process and Application of the
Rules on the Standstill Period’, for further details.
10.
CONTRACT TERMS AND CONDITIONS
10.1 Most government contracts are based on standard contract documents
appropriate to the supplies, works and services being purchased. For
routine tenders, the tenderer will receive a copy of the tender
documentation which includes the terms and conditions of contract.
When submitting their tender, the tenderer will be legally bound by the
terms and conditions set out in the tender documentation, if awarded a
contract.
10.2 More complex contracts, such as IT systems will not be concluded until
the winning tenderer and the CA have agreed the terms and conditions.
It is therefore important for all parties to fully understand their
responsibilities under the contract. If in doubt, legal advice should be
sought.
11.
DELIVERING THE CONTRACT
11.1 Contract management is the phase of the procurement cycle in which
the successful tenderer delivers the required supplies, works and
services in accordance with the CA’s specification. The CA’s
20 and
supplier's approach to managing their relationship is critically important
to ensuring successful contract delivery and VfM. When things go
wrong, the failure can be expensive in human, financial and
reputational terms.
11.2 Good management of this operational phase of the procurement is
therefore critical. It ensures that both parties fully meet their respective
obligations as efficiently and effectively as possible, in order to meet
the business and operational objectives required from the contract.
20 In some cases, the relationship may be between the successful tenderer and the client itself.
16
link to page 16 link to page 17 link to page 17
11.3 The SME therefore needs to be in a position to deliver the contracted
requirement in full and to the agreed performance standards to ensure
and enable an effective commercial relationship.
11.4 PGN 01/12 on Contract Management - Procedures and Principles
provides more information and is available from the CPD website
21.
11.5
Getting paid on time – what to expect from CAs
11.6 Having won the tender, the successful SME should expect that CAs will
have clearly defined the payment terms within the contract.
11.7 Public
Sector
organisations will:
pay invoices in accordance with agreed terms, or as required by law;
tell suppliers without delay when an invoice is contested; and
settle as quickly as possible when a contested invoice gets a
satisfactory resolution.
11.8 In November 2008, the Minister for Finance and Personnel made a
commitment to speed up the payment process on presentation of a
valid invoice. NI Departments will therefore aim to pay suppliers,
wherever possible, within 10 working days. Where the main contractor
benefits from earlier payment, and on presentation of a valid invoice,
this should be passed on to the sub-contractor.
11.9 Public sector organisations are also bound by The Late Payment of
Commercial Debts (Interest) Act 1998
22. This provides a statutory right
for suppliers to claim interest on late payments of commercial debt.
Payment is regarded as late if made outside the agreed terms, or 30
days after receipt of a valid invoice, where no terms are agreed.
11.10 Government Construction Clients also agreed to expand the ‘Code of
Practice for Government Construction Clients and their Supply Chains’
to include a ‘Fair Payment Charter’
23 and to require main contractors to
report payment progress to sub-contractors at project meetings.
12.
COMPLAINT HANDLING
12.1 CPD and the CoPEs aim to provide a high quality, efficient and
professional service, but occasionally things can go wrong and there
are formal complaints procedures in place to resolve such matters if
they arise.
21 http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd_publications/content_-_cpd_-_policy_-
_procurement_guidance_notes.htm
22 (as amended by the Late Payment of Commercial Debt Regulations 2002 (SI 1674)
23 http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-
suppliers/cpd_code_of_practice_for_government_construction_clients_and_their_supply/code_of_practi
ce.pdf
17
12.2 NI Public Procurement Policy requires each CoPE to have a formal
complaints procedure through which complaints can be formally
investigated. Details of these procedures can be found on the relevant
CoPE websites.
12.3 It is important to note that the complaints procedure is not an appeal
mechanism for tenderers who are dissatisfied with the outcome of a
procurement competition. The relevant procedures for challenging an
award decision are set out in The Public Contracts Regulation 2006 (SI
2006 No 5) as amended and The Utilities Contract Regulations 2006
(SI 2006 No 6) as amended. Such a challenge will be a matter for the
High Court to decide.
13.
CONCLUSION
13.1 There are considerable opportunities for SMEs in bidding for public
sector procurement contracts. However, like all business opportunities,
the risks have to be assessed and weighed against the potential
benefits. Organisations can also avail of networking opportunities or
“Meet the Buyer” events to improve their ability to tender for public
sector contracts.
14.
FURTHER INFORMATION
14.1 Additional useful websites and sources of information are listed at
Annex B. Any queries on this PGN should be addressed to:
Central Procurement Directorate
Procurement Policy Branch
2nd Floor East
Clare House
303 Airport Road West
BELFAST
BT3 9ED
Phone: 028 9081 6518
e-mail:
xxxxxxx.xxxxxx@xxxxx.xxx.xx
All PGNs c
an be found at http://www.dfpni.gov.uk/cpd
18
Annex A
TYPES OF PROCUREMENT PROCEDURES
The EU Procurement Directives provide for four main procurement
procedures to be used by CAs.
For straightforward procurements, for example of commodity supplies and
services, the open, or restricted procedures are used. For complex
procurements, CAs normally use the Competitive Dialogue procedure. This
can be used where a CA wishes to award a particularly complex contract and
considers that the open or restricted procedure will not allow the award of that
contract. In exceptional circumstances or where other procedures fail to
produce a contract, CAs may use the Negotiated Procedure.
The Open Procedure
Under the Open Procedure, all interested suppliers who respond to an OJEU
advertisement must be invited to tender. This procedure does not allow any
form of pre-qualification. If the supplier meets the selection criteria, the CA
must consider and evaluate the submitted tender.
The Restricted Procedure
Under the Restricted Procedure, interested suppliers are invited to respond to
an OJEU advertisement by submitting an “Expression of Interest” (a
completed PQQ) in which they reply against defined selection criteria such as
technical capability, financial standing, or experience of supplying similar
projects. A shortlist of suppliers is then drawn up and invited to submit
tenders (an ITT).
The submitted tenders are then evaluated against the award criteria, e.g.
price, quality and time of delivery. The CA will then award the contract to the
tenderer that best satisfies all the criteria.
The Competitive Dialogue Procedure
For complex procurements, the restricted procedure is usually too inflexible as
it allows only limited discussion and dialogue with suppliers. CAs will
therefore normally follow the Competitive Dialogue Procedure, unless there
are exceptional circumstances that would justify the use of the Negotiated
Procedure.
Competitive Dialogue is a flexible procedure, suitable where there is a need
for CAs to discuss aspects of the proposed contract with suppliers. For
19
example, the procedure would be used where CAs cannot define clearly in
advance the technical means capable of satisfying their needs or objectives,
or where there is a range of options for the legal and/or financial structure of a
project.
Under Competitive Dialogue, a similar pre-selection procedure is undertaken
to that used for the restricted procedure. Shortlisted suppliers are then invited
to participate in dialogue, which may have several stages. This helps to refine
the requirement through supplier input and gives the opportunity for
meaningful dialogue. Once this stage is concluded, suppliers are invited to
submit a final tender.
The Negotiated Procedure
The Negotiated Procedure is a procedure leading to the award of a contract
whereby the CA negotiates the terms of the contract with one or more
economic operators selected by it. It is limited to specified circumstances for
each type of contract and is intended for use when other procedures will not
work. It may be valid when: competition is not viable, or appropriate; other
procedures have not produced an acceptable tender; work is needed for
research and development purposes; or where prior overall pricing is not
possible. There are also circumstances where this procedure can be used
without a call for competition for example, where it is strictly necessary for the
completion of a project and the services cannot be provided separately
without major inconvenience to the CA or where the services are a repetition
of the services already provided and the notice advertising the original
contract provided for such a repetition.
Use of the Negotiated Procedure has been reduced since the introduction of
the Competitive Dialogue procedure and the direction from both the EU and
the Cabinet Office is that the Negotiated Procedure should only be used in
exceptional circumstances and any use will be scrutinised by the EU.
Framework Agreements
Framework Agreements are put in place with one, or more (usually several),
suppliers of the same product or service. The Framework Agreement sets out
the general terms and conditions under which specific purchases can be
made as and when they are required. They are mainly used when the
quantity of supplies, works or services is undetermined.
The competition for awarding a place on a Framework is usually very similar
to that for winning an ordinary contract. There may well be a formal pre-
qualification process, and/or a tendering stage which suppliers must complete
successfully before they can be party to the agreement. Framework
Agreements normally last a maximum of four years.
20
A supplier who has succeeded in being awarded a place on a Framework
Agreement, can receive a call-off order directly, or (since a Framework
Agreement does not mean an automatic agreement to purchase) may be
asked to take part in a mini-competition with other suppliers on the
Framework. The formal contract is formed when the customer places a ‘call-
off’ order against the Framework requesting specific delivery of supplies or
services.
21
Annex B
USEFUL WEBSITES
(This is not an exhaustive list)
NORTHERN IRELAND
Central Procurement Directorate (CPD) http://www.dfpni.gov.uk/index/procurement-2/cpd.htm
CPD provides a professional procurement service to the NI Government
Departments, their Agencies and other public sector bodies in respect of a
wide range of supplies, service and construction works. This ensures best
value for money, legal compliance and competitiveness. Current tender
opportunities are advertised on the CPD website.
eSourcing NI https://e-sourcingni.bravosolution.co.uk/web/login.shtml
This is an electronic tendering portal which provides increased accessibility for
SMEs, SEEs and other potential suppliers who wish to do business with the
NI public sector.
Department for Employment and Learning
http://www.delni.gov.uk/index/finding-employment-finding-staff/fe-fs-
help-to-find-employment/das/nddp-contact-details.htm
The Disablement Advisory Service can be contacted via the link above.
NI Business Info
http://www.nibusinessinfo.co.uk/bdotg/action/home?site=191
Northern Ireland’s online business advice service.
NI Departments
http://www.northernireland.gov.uk/gov.htm Website providing links to all of the NI Departments.
NI Public Procurement Policy
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-
legislation/cpd-ni-public-procurement-policy-version-5.htm
Includes the 12 guiding principles which govern the administration of public
procurement and the procurement structures within NI such as the
Procurement Board and the CoPEs.
NI Public Procurement Policy Handbook
http://www.dfpni.gov.uk/index/procurement-2/cpd/cpd-policy-and-
legislation/cpd_policy_ni_public_procurement_policy_handbook.htm
The handbook provides details on the context within which NI Public
Procurement Policy operates, the structure and operation of procurement in
the NI public sector and the roles and responsibilities of key players within the
procurement process.
Trade Social www.tradesocial.net
Trade Social aims to promote opportunities for social economy enterprises to
do more business – by selling to each other, selling to the public and private
sectors and selling to the general public. Entries in the Directory are free to
social economy enterprises set up and trading in Northern Ireland.
22
UK WIDE
UK Treasury www.hm-treasury.gov.uk
Winning the Contract
http://www1.learndirect-business.com/business-courses/winning-the-
contract/ This is a free online course is designed to address the small business
knowledge gap on public procurement. Although focused on Great Britain,
SMEs will find useful background information and strategies to enable them to
compete for public sector contracts.
Government Procurement Service (Buying Solutions)
www.buyingsolutions.gov.uk/
The supplier zone of this website provides valuable information, advice and
guidance to existing and potential Buying Solutions suppliers.
Business Link
http://www.businesslink.gov.uk/bdotg/action/layer?lang=en&topicId=107
4033478 This provides businesses of all sizes with access to guidance and support to
meet their business needs and carry out transactions with government online,
thus helping to save time and money.
Efficiency and Reform Group within the Cabinet Office
http://www.cabinetoffice.gov.uk/government-efficiency
This site provides information on supplying to the UK government,
publications and other programmes and initiatives for public procurement.
The Scottish Executive Procurement & Commercial Services Division is
responsible for ensuring that public funds are utilised to achieve value for
money for the taxpayer. www.scotland.gov.uk/procurement/
Sell2Wales is an initiative from the Welsh Assembly Government helping
SMEs work successfully with public sector clients. www.sell2wales.co.uk/
IRELAND
InterTrade Ireland http://www.intertradeireland.com/ This organisation provides business development initiatives offering
companies practical advice and support in targeting new cross-border
business opportunities, developing new products and processes and
attracting equity investment.
Public Sector Opportunities in the Republic of Ireland
www.e-tenders.gov.ie
This site is designed as a central facility for all public sector Contracting
Authorities to advertise procurement opportunities which currently exist in the
Irish Public Sector.
EUROPE
23
Gateway to the European Union
http://europa.eu/policies-activities/tenders-contracts/index_en.htm
A website which gives an overview of the Public Procurement market in
Europe, provides information on various issues such as legislation, tenders
and signposts useful links for both buyers and suppliers (includes links to
SIMAP and Tenders Electronic Daily).
Enterprise Europe Network www.investni.com
The Enterprise Europe Network offers a “one-stop shop” for companies
seeking to undertake work in Europe.
24
Central Procurement Directorate
Clare House
303
Airport
Road
West
Belfast BT3 3ED
Telephone:
028
9081
6518
Email:
xxxxxxx.xxxxxx@xxxxx.xxx.xx
25
Document Outline