Bright procurement idea (?) of the month – let’s abolish the PQQ

I heard this week (and of course it may just be a rumour, but it was entertaining enough to bear repeating), that one suggestion under consideration to make UK government contracts "more attractive to smaller firms" is to get rid of the PQQ stage of the process. So we wouldn't have a pre-qualification process, we would just move straight into a direct tendering process,  presumably open to any organisation that was inclined to submit a bid.

My advice; DON’T DO IT!  It would be madness. Now McKPWC Geliottes would charge the government tens of thousands for that bit of consulting. From SpendMatters - free, out of the goodness of our hearts.

Without a PQQ you will end up with potentially hundreds of bidders for many contracts; and they’ll all have to complete a full tender, at far more cost to them than going through the  PQQ stage. Think of all those very p****d off SMEs complaining to their MP about the waste of time involved in that. And the effort needed to fully evaluate hundreds of tenders...

Or I suppose the idea might be just to do a really simple tender; which probably means price will need to be by far the main factor, as it will be the only clear differentiator.  In which case you won’t be able to check out a supplier’s credentials, let alone their ability to carry out the specific contract effectively and with best VFM.  And we’ll have all sorts of scandals where dodgy firms win contracts and we then find out they’re owned by Bernie Madoff or the Taleban.  Or firms bid ridiculously low then just fail to deliver. And, oh, the scope for challenge! The procurement lawyers association are already planning their celebrations...

Now there are ways to speed up and simplify the process;  see here for some suggestions. But this isn’t one of them – except perhaps (I’m trying to be balanced here) for the very simplest contracts, for the very simplest goods and services.

I hope it was just a rumour, probably spread on a Thursday night outside the Westminster Arms after the third pint of London Pride*...

(Pub next door to government offices in London where the drinkers spill out onto the pavement on a busy night, and in an hour you can find out more about what is going on in UK government than from any newspaper...

Voices (5)

  1. Ian Heptinstall:

    The PQQ is dead, long-live the PQQ.

    Culling the kind of PQQ used by many companies is long overdue. These verbose, over-long forms asking almost every question under the sun, are definately not value-for-money in my expereince. They are one of the worst examples of the tick-the-box School of Procurement. Big companies often bully SME’s into completing their version of the form, ignoring attempts to provide standard databases and accreditations, and asking for a lot of information that I dont believe can help short-listing suppliers.

    Now of-course I dont mean that a robust process for reducing a long-list of potential suppliers to a medium- or short-list is not a key procurement process. But design one that respects the time of the interested suppliers, and weeds out those least likely to meet your core requirements with minimal effort. Spend 15 minutes thinking what is key to your business before starting. Write the most important criteria down, and turn it into some key questions that fit on one side of paper. If you have minimum requirements/deal breakers, be explicit and ask a Yes/No question, and if they answer wrongly suggest they dont bother applying. Make it easy for you and them!

    The long PQQ reminds me of the quotation attributed to Churchill, Samuel Johnson, Pascal, et al.. “I did not have time to write you a short letter, so I wrote you a long one instead”. It might save a little time to send, but adds to the assessment time (assuming the data is actually used), and can give the supplier a very poor impression of the potential customer.

  2. R:

    Get rid of PQQs? Why don’t we get rid of the ‘contract’ while we’re at it.

    I can’t see why you would want to eradicate a stage in the procurement process that is adopted by all industries as best practice. Are you a successful, sustainable business? Is your track record aligned to the core capability that we want to buy from the market ie: is this your core business? Have you done anything fraudulent or corrupt? Is this proposed annual contract worth more than twice your annual turnover? Do you have any, erm, references? Etc! I wouldn’t wish to award any business without first knowing these basic facts. Now, you might wish to create ‘Pre-Qualifying’ solution so that SMEs don’t have to submit the same basic info, time and time again, given the minimal repources they have (and these solutions do exist), but surely you would still want to carry out basic checks on them?

    The Lianikis judgement was about fairness and transparency (the reason why we have these EU regs), and if any buying authority is daft enough to develop criteria at the wrong stage of their procurement process (because of bad planning, or because of changing their minds after receiving initial responses, for example), or have criteria but not declare it, then they deserve to be hammered in court.

    I could write an entire book on the reasons why SMEs don’t get their hands on many of public sector’s procurements (and they’re similar to the reasons as to why they don’t win a significant number of contracts in the private sector), and another book on how it all might be improved,

    But, in my view, ‘removing the PQQ process’, would only feature in a kid’s ‘pop-up book’ (or a comic), or, perhaps, in an ‘idiot’s guide’.

  3. C:

    I’m not sure that what people are saying. In fact, I think its a misinterpretation. One of the difficulties being looked at is the problems caused by the Lianakis judgement and the need to have strictly separated ‘supplier selection’ and ‘award’ phases. If that’s the case then the PQQ in its current financials and past experience form does die and we get somewhat closer to sensible commercial practice.

  4. T:

    amen to not getting rid of the PQQ.
    there might be a million variations of it but getting rid of it will be a butcher’s job, i.e. so much time wasted doing the whole tender. Small companies already complain that tenders are for big companies only, that will ascertain it.

    Reminds me a few months ago, speaking with somebody in Brussels’ European Commission who was thinking of making the EU thresholds much higher than they are now. He was saying that that will help Small Businesses. You mean, not having tenders published by law in a central database but instead in some obscure newspaper or website that every single procurer can decide on, with procedures decided by the procuring organisation in whatever EU country, and following whatever criteria they want, will make the process easier for small companies?

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