As a previous government procurement professional, who led many major projects, our first impression of this was simply "Get over it". After all this is what competition is all about and you ('De La Rue') new the rules of the game when you decided to enter this open and transparent procurement process.
However, having worked on many private sector bids, tendering for public sector government business, we are (in our opinion) seeing far to much emphasis being put on price, even though the evaluation criteria for price still typically averages out at 40%.
Professional buyers across government, in my opinion, are not doing enough to address the quality aspects of the bid. Consequently, they are relying far too much on what is put in front of them (in terms of a written submission) and they are not following through with the appropriate due-dillegence.
Over the last couple of years, there appears to be a growing trend, whereby suppliers (who are attempting to penetrate certain sectors) are now submitting bids at a cost, that is quite frankly unsustainable, simply to pick up the max weighted score in order to buy the contract. They know they might not achieve the best quality score, but so long as its reasonable to stand the test of robustness, this for them is a risk worth taking, as government is very much influenced by price even though it states its overall criteria is based on MEAT.
It's all very well government putting in such conditions that address 'abnormally low price tenders' but in our considered view the UK government is now prepared to take a risk on all of this. This is because, the Regulations do not define what constitutes an "abnormally low” offer, nor is there much helpful guidance to date on the point from the ECJ or the courts. Thus it only ever really comes to a head after the award of contract and the successful supplier then starts to expose itself, because it struggles to transition and mobilise itself effectively, due to the unsustainable costs that were put forward in the first place. Consequently, one of two things then typically happen:
(1) the outgoing supplier has to step in to support the transition period and help government save face, as a result of pressure being applied upon them because the out going supplier still has other contracts in place.
(2) the good old change control process kicks in and before we know it, we start to see the costs rise, by which time the public interest is no longer as visible, as it was before the contract was awarded.
I think the procurement buyers and the SRO on this particular project are going to be tested more than ever and this is going to be of great interest going forward. The supplier industry always said that they will one day 'bite back' after the bruising that 'Francis Maude' gave them when centralisation kicked in and started banging the big drum about 'more for less'.
Has that day come?
Our procurement web portal search engine for worldwide government live tenders is available for subscription and FREE trial access.
Why not check out our new Tenderspedia subscription plans and stay one step ahead of your competitors.
Sign up at and we will ensure you get off to the right start by giving you one of our incentive offers below:
Subscriptions can be paid for via PayPal.
The new Public Contract Regulations 2015 replaces the 2006 Public Contracts Regulations. It will take time before some of these new concepts and approaches bed in, although we note that some indicative procurement pipelines indicate that the Crown Commercial Service (CCS) are preparing for the New European Single Procurement Document (ESPD); albeit the date by which to introduce the ESPD for the UK has not yet been finalised.
The ESPD will essentially work as a self-certification document whereby potential bidders will need to self-declare that they are not within the exclusion regulation criteria. They will be able to make this declaration without the need to submit proof and thus will only need to evidence this should they (and only if requested by the awarding body) be subsequently selected as the appointed supplier - one might argue this is a passport entry ticket but only validated once you cross the border!
The idea behind the ESPD, is that bidders will be able to complete this document once and subsequently rely on it as preliminary evidence of meeting various pre-qualification standards, thus saving on the time and effort needed to repeatedly complete PQQ’s. All very well but this does not come without risk!
In a recent published article by Supply Management one major flaw to note is: what happens when the identified ‘appointed supplier’ cannot provide the proof? Couple this problem with the overall evaluation criteria split, whereby we have recently seen too much weight being factored into the price, (which can often lead to suppliers submitting proposals at a low price, simply to win the business -which then becomes apparent when they start to fail during delivery) and you start to get a sense of the real risks that lie ahead for government buyers, as a result of Lean Processes being introduced. Don’t get us wrong we very much endorse Lean Procurement, but not at the expense of cutting short the true value add of looking back on the suppliers financial standing, capacity and capability; all key facets of of any sound procurement strategy. It is therefore important that the commercial capacity and capability across central government does not come under threat as a result of departments being increasingly under pressure to cut costs.
This table sets out the minimum key timescales relating to the main contract award procedures under the Public Contracts Regulations 2015. Please note that this does not include for the appropriate time period that buyers will need to give for other aspects of the procurement process such as: the evaluation of tender responses.
We were pleased to read the key trends and findings today from the recently published CIPS/Hays salary Guide and procurement Insights report 2015.
It was very encouraging to see that demand for procurement professionals is at all time high with more and more companies now requesting MCIPs as a preference when engaging with procurement professionals. Here at Apta Consultancy our procurement professionals are MCIPs qualified. This is important to our business because we understand what true Customer Value Propositions mean and how they can be constructed to help give you a significant competitive advantage when bidding for and managing your public sector business.
As procurement professionals have acquired a more strategic role within organisations, this has started to create an environment where procurement specialists are being invited in to contribute on higher value added strategic activities that are in line with the changing needs of your business.
At Apta we understand the importance of relationships, both within the customer and supplier communities. Whether it’s addressing the right levels of engagement through: (a) the tender process or (b) putting in place the appropriate relationship management resources to support governance processes with your customer or (c) influencing and enhancing communications with stakeholders, we can support and deliver on the challenges that you face.
Well, well, International security giant Northrop Grumman (NG) has confirmed that it has been awarded a £28.8m contract by the Home Office to provide service and systems operations and maintenance to the Forensic and Biometric Interim Capability, otherwise known as FABrIC.
Firstly, congratulations NG, but this hardly comes as any real surprise - who else could it possibly have ever gone to given the scope and timescale of the requirements?
It somewhat frustrates us when we see open tenders like this being run, with tight deadlines, knowing only to well, who's actually over the line before the gun has even been fired!
Rather than going through the proc exercise just for the sake of process, process, process, perhaps the HO/CCS should learn to concentrate more on working and developing its existing strategic relationships, so that outsource partnering becomes much more effective through continuous improvement measures.
Surely someone in the HO/CCS should have put there head above the parapet and put forward a sound business justification for retaining an incumbent such as NG under there existing IDENT 1 contract, without the need to conduct short term contracts such as this! At least it would negate the need to waste industries time with market industry days and ITT’s that don’t provide for any real sense of competitiveness - buyers in government need to stop hiding behind the EU procurement rules saying it can't be done......
Had they of done so, they might of actually got a better deal than what’s now on the table!
Enter your email address to subscribe to this blog and receive notifications of new posts by email.