More Open Procedure and open contract advertising – Carmarthen make it work

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We featured here the good work going on in Value Wales - their approach to PQQs and their “SQuID” project, which is looking to provide a single registration system for suppliers to all public bodies in Wales.

During our discussions with their team, we got into a big issue around this whole drive to open up public sector procurement to small and local suppliers.  The usually unspoken fear amongst procurement staff is that in opening up opportunities, they will be inundated by hundreds or thousands of bids for every contract, even those of pretty low value. The more contracts are advertised, and the easier it is for suppliers to bid, the greater the workload for hard pressed procurement teams at a time when resources are being cut back.

Along with greater advertising of contracts, use of the EU “Open” procedure is being put forward as one way of reducing the effort required, and of making life easier for suppliers. The theory is that, as a one stage process, without a separate PQQ and tender stage, it is easier for both parties. However, the fear amongst public sector buyers is that this will just mean even more work, as they will have to assess a full proposal from every bidder, rather than cutting out most at the PQQ stage.

That has led in some quarters to buyers designing a process that doesn’t meet the spirit of the Open procedure. They have combined a full PQQ and an ITT in one document. Bidders are then told they have to complete the whole thing – but the tender section will only be considered if they “pass” the PQQ section. This means of course that every potential supplier has to do all the work, and for most, the tender response element will prove a total waste of time – it won’t even be considered.

But Value Wales, and individual contracting authorities within Wales, are clear that this is not how they want to do things. When they use “open”, the qualification element is light touch, with a view to actually assessing the proposals of the vast proportion of bidders. But won’t that, along with more advertising of opportunities, lead to a huge increase in workload?

Not necessarily. “We’re finding that the key is to give the potential suppliers as much information as we can about the process, how we will assess them (evaluation processes), and our needs” says Sue Hurrell of Value Wales.

Carmarthen location map. Did you know the town is the oldest in Wales?

And the first bit of objective analysis I’ve seen around this comes from Wales. The procurement team at Carmarthen Council has been promoting the Open procedure for some time, and has been advertising on Sell2Wales since mid-2007. Now they’ve analysed the effect (well done for a good piece of work to Alan Aitken, Sian Griffiths, Gemma Clutterbuck).

72 contracts formed the sample, and for contracts below £25K, there were on average 12 responses. Above £25K but below OJEU it was 8, and above OJEU it was 16 – not worryingly high rates.  The small number of renewed contracts showed an increase in bidders of 40% since Carmarthen started advertising on Sell2Wales. Carmarthen felt this to be a “manageable increase” and may well indicate more genuine competition.

74% of their OJEU procurements, excluding part B services, have used the Open Procedure – a far higher percentage than most organisations.  Perhaps the most surprising finding is that those competitions using Open Procedure received on average 10 bids – those using Restricted 32 bids!  Now this may not be strictly a like for like comparison – some of the Restricted were for complex framework procurements. But it is interesting and shows that Open doesn’t necessarily cause mass bidding. Carmarthen say this -

“... we have adopted a rigid policy of doing all the groundwork for the contract before an advert is placed. PIN notices have been placed... . supplier conferences are held frequently. .. That means full specifications, evaluation criteria etc are all ready before adverts are placed. “

Maybe that’s the key. Be very open with the market about what you want, give them all the information you possibly can, and suppliers will self-select, and you won’t be inundated with no-hope bids that still need evaluating. So if every contracting authority follows the Carmarthen process, perhaps more advertising and more use of the Open procedure will turn out to be a wholly positive move for suppliers, for greater openness, and for procurement staff.

Voices (2)

  1. Karen Doncaster:

    The Open process does still need to include the qualification stage to assess organisations capability to deliver. This may not be as comprehensive as a PQQ stage of a restricted process but it is still important to ensure the sucessful organisation will be able to meet the requirements. If sufficient information was not requested to allow organisations capability to be evaluated Public Sector bodies may may end up having to tender again if contracts failed. Surely it is about looking at what is most appropriate for the specific process being undertaken?

  2. Dan:

    More tenders = more chance of challenge from a disgruntled tenderer. It will be interesting to see if they continue with this once challenges start arriving in higher numbers.

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