Develop tendering expertise - nominate and train someone to coordinate everything centrally
|
Your trained employees give a great boost to efficiencies. They acknowledge the importance of the 'licence to tender' role held by the nominated person. They help build on this persons existing knowledge and expertise and provide an excellent 're-focus' opportunity by:
- being able to identify simple and straightforward selling strategies that can be adapted
- being able to make offers beneficial to both parties
- offering information with good value arrangements in place that can be drawn on and reduce time & effort spent on this task
- sharing and listening to real problems the public sector comes up against and giving hints and tips on how to avoid or overcome these
- building relationships and sharing knowledge and expertise to come up with innovative business solutions to problems
- having confidence to tender for contracts by understanding the rules that apply e.g.:
- how contract regulations operate. The regulations apply not only to when it is/isn't appropriate to go out for a formal tender but covers the required standards of behaviour to prevent anyone breaching probity rules;
- how to run a 'formal' tendering process - how to identify, tender, win and manage a contract
- the skills needed to successfully manage the contract. and
- having the confidence to challenge a decision by the purchaser
|
Plan ahead - identify what is required to get the best possible chance of winning the contract
|
Planning ahead is a good way of finding scope for efficiencies. It gives time to question and assess, if alternative solutions are available (eg. forming a consortium or partnership), and if the timing is right.
It is recommended that contracts are linked to the business development plan and consider:
- tendering timing:
- if possible, avoid tendering at the end of the year. Other businesses will be doing this too and you will be hard pressed to maintain delivery timescales and quality standards. It also means there are unlikely to be opportunities to negotiate.
- if similar tenders are on the horizon it may well be worth to think about partnerships. This will help reduce costs and achieve best value;
- the range of tenders announced. There are central places to find tenders announced OJEU ? PIN central contracts registers - This is an excellent way of keeping track of the number of tenders announced, their value, outputs, and termination dates. This makes life easier for the management team (eg. finance committee) to regularly review the register.
- tender arrangements. A project plan should be drawn up, setting out all the strands of work, authorities require, how the strands will be taken forward and completion timescales. The important aspect of any tender timetable is to have plenty of space to conduct the process. The more complicated/important the contract the more time needed.
- Please, keep a close eye on contracts which have short notice periods for termination. Good contract management will help meeting deadlines and maintaining quality standards and avoid scope and to build up confidence for a future business relationship.
|
Know your own power - how much can you invest, are there limits?
|
This tip isn't so much about finding out whether there is money in the budget or an authorisation required for a tender - although these are important. It is aimed at understanding the rules that apply to spending money and responsibilities that go with that.
- You will not need 'in-depth' knowledge of the legal requirements surrounding procurement set by European and national parliaments. What you will need is an awareness of appropriate behaviour in dealing with the Public Sector, declaring any conflicts of interest and having an awareness of the limit when it comes to tendering.
- the £ spend limit requiring a formal tendering exercise;
- the £ spend limit when a competition must be run through Europe;
- disposal arrangements; and
- behaviour standards to apply to prevent any possible misuse of funds (probity standards)
- The limits and processes put in place are aimed at ensuring a free flow of competition between suppliers. This in turn helps make sure that when public money is spent it is through good value for money deals. Although applying these processes can sometimes involve a bit of additional work, this is worthwhile as it helps protect you from accidentally breaching the legislation.
- Equipment required for new IT suite within a school. One of the parents who runs an IT business assesses what is needed and offers to supply the school with £21,000 worth of IT equipment - plus lots of extras. This looks like a great deal.
- No fair competition has taken place with other suppliers in the market. If a school were to take it up they might find (at best) the deal hasn't really addressed the real needs of the school, including maintenance and other whole life costs plus. At worst the school could be left open to damaging legal action.
Training, research & good planning will help avoid any pitfalls
|
Don't tender unless you have the time, manpower and knowledge of the processes and procedures
|
As part of general good practice, before going ahead with a tender:
- check whether another supplier wants to form a partnership with you so there is an opportunity for some collaborative selling. A contractor can choose to work with a consortium when giving out new contracts.
- consider innovative ways. Some public sector agencies have e-procurement systems with a quote or e-auction facility. This is relatively new technology with only a few examples of local authorities piloting it in a collaborative way. However, e-auctions can be successfully used as a tool for collaborative e-procurement where a number of public sector agencies take advantage of their local authority's electronic auction for particular goods or services; and
- If savings have been made (financial or time savings) always record these, no matter how small. It can be useful information to include in the report and help you build up an efficiency picture of your business for future reference.
|
Don't spend hours saving a pound - consider the total cost of tendering
|
This tip seems fairly obvious as there really is no point spending 3 hours time to save £1. This can sometimes be forgotten in the need to win more business.
- businesses can end up spending a significant amount of their time offering goods and services when there are LA endorsed consortia existing. It makes good sense to use the agreements set up. If there is someone in the business with the 'licence to tender' role they will be invaluable here.
- good planning can avoid one-off purchases and bring about economies of scale that can attract favourable negotiated rates. When making one-off purchases it is easy to forget the need to factor in the 'whole life' cost of a product. These costs range from delivery charges, cost of consumables, on-going maintenance and final disposal. As an example:
- an office printer looks as though it needs to be replaced. Someone has spotted a magazine with a cheap alternative printer that has a free offer with it. What has not been made clear is that each time one of the colours runs out, the whole ink cartridge needs to be replaced. Reliability and robustness of product might also cause some issues. Taking all of these factors into account - cost of printer, consumables etc. it could be that the total costs are much greater than originally thought.
- The person with the 'licence to tender' role can make a real difference in spotting the inefficiencies within any tender. They can also make sure that any specification going out to suppliers will be built to address the issues involved.
|
Offer alternatives - branded products may not always be the best
|
Do's and Dont's in The Sales Process.
- It is really tempting when selling something to try to be the 'best brand'. People tend to feel comfortable with a brand recognised from marketing campaigns.
- Their familiarity with best brands doesn't necessarily mean they are willing to pay more money for best value. There are very many good products on the market that offer quality and reliability equal to or in excess of the branded product - and at a competitive price. E.g. show that your cheaper paper will not jam the printer and cost more in staff time but that it works just as fine as the more expensive branded paper.
- Every time a brand item is asked for it is worth answering the question - "why that particular brand?". The alternative brands on the market often match up and at a much more competitive price.
|
Improve your selling power - form a (local) consortium to give a better deal
|
A consortium is simply an association or group of businesses who join together to minimize costs, to maximise selling power and provide better value.
- ESPO, NEPO, WMS, YPO etc. ?????
- The higher the volume of business going through these agreements the better the quality and price you can offer.
- The main benefits for doing this are:
- Sharing administrative workload - an advantage when tendering is involved.
- Increased selling power - greater volumes of business may encourage you to create better deals for the group.
- Reduced costs..
- Ability to obtain goods/services- A consortium would provide the necessary size and influence.
- Experience - a consortium including larger businesses means that smaller businesses can use their experience.
- Greater negotiating power - the public sector may be tempted to take advantage of smaller businesses; however, the threat of losing products and services from a consortium will have an impact.
|
Negotiate, negotiate, negotiate - get the best deal for your money
|
Negotiation is much easier if someone is designated within the company as holding the 'licence to tender' role (possibly more than one person depending on structure of the company). Their negotiation skills will be honed by training (tip 1) and practical experience. Even if they won't be directly involved in the negotiation they will be able to advise or team up at the meeting.
Some things to consider.
- When to negotiate? Never pass up an opportunity to negotiate but make sure the opportunity is right (don't spend hours saving a £).
- What is the right price? Remember negotiation isn't only about getting the price up or down it could also be about - giving increased quantities, better quality, better delivery timescales, offer an additional service (eg. ongoing maintenance) etc. It could even be about all of these things.
- Who is the right person to negotiate? This will depend on who has the required knowledge and who has authority to make decisions on behalf of the company.
- What your bargaining points are. Does the contractor need your products or services, what's in it for them - all about finding the right levers to use.
- What is your goal - what you would ideally like from the deal, what would you be prepared to settle for? Take a bit of time before the negotiation to sit down and think through what bargaining points you have and hoped for goals (fall back ... ideal) through. Even if a price reduction is not possible what extras could you give an extra efficiency? Remember, win-win is always best.
- Seal the deal - get it in writing. At the end of the negotiation summarise everything that has been agreed including the quality standards. This must be followed up in writing straight after the meeting making it clear that this is the final agreed position.
- And ... enjoy this experience, pick up points that can be used next time around.
|
Get it in writing - read and understand the small print
|
It's what's in writing that matters. Although there may be a verbal agreement with the contractor that something will be supplied on a particular date, goods will be send in a particular way, 'extras' will be given - if it isn't in writing there's a better than average chance that you will be an unhappy supplier.
- Terms & Conditions. Always make sure the terms and conditions that are met. Never accept any changes to these as the change has probably been made to advantage of the contractor and at the disadvantage of the supplier. If you are uncomfortable in using them, it might be worth questioning whether you have the right contract.
- Never allow yourself to be pressured by the contractor -they need the goods and services. If you are being pressured it's likely the deal is not worth it.
- Giving Quotes: An approach worth taking when giving out quotes when selling an unusual or challenging item is always to set out in writing what the contractor wants (essential when going out for formal quotes or formal tenders).
- write down what is required/specified. This helps build a common understanding and reduces opportunities for misunderstandings. If one contractor has misunderstood its likely others will too, even if they haven't raised the question.
- The contractor will get quotes from other suppliers. This allows a fair comparison to be made between quotes supplied. It is good practice that the person who is dealing with the quotes is also the same person who speaks to suppliers or is involved and any site visits etc.
|
Share best practice - if you've find a good tender, share it with a partner?
|
You may very well ask why a good deal should be shared particularly one that you've spent time finding. It is very simply that when sharing a tender you might increase your chances of getting the contract e.g.:
- Tendering as a group can be on the basis of:
- Finding out if the same supplier is being used by your colleagues in other schools. This opens up possibilities to pull together to give an even better deal to the contractor (see tip 7 - improve your selling power).
- Benchmarking the quality of service others are receiving from their suppliers. This information is worth having as it can give confidence when going out to for an 'informal' low value purchase. It can also be used in the contract management of a current service to improve poor performance.
- Benchmarking on price (but please see note below). We know of at least one national supplier who has different catalogue prices with different customers for the same goods. It could be that the price you are paying could be even better.
|
|
EC_Procurement_Thresholds_2006
EU_Procurement_Directives
|
Procurement_Code_of_Good_Practice
Competitive_Procurement_Dialogue
|
|
UK_Procurement_Research_Report
RBC_Corporate_Procurement_Strategy
|
Tendering_and_Procurement_Process
Voluntary_Sector_Procurement
|
|
Strategies_for_Success_E-Procurement
UK_Procurement_Guidelines_Example
|
UK_Procurement_Guide
UK_Procurement_Guidelines_Example
|
|
UK_Public_Procurement_Directives
Key_Skill_Areas_in_Procurement
|
Procurement_in_Northern_Ireland
UK_PSP - A_Level_Playing_Field
|
|
SBS_Procurement_Survey_Results
FSB_TfCT_Procurement_Model
|
EU_Procurement_Directives_FAQ
Selling_to_Procurement_Agencies
|
|
OGC_Procurement_Guidelines
|
For Additional Procurement Resources
Register Here
|
