Procurement without PQQs – we see a new public sector ‘open’ tender

In the dingy basement bar, hidden from the tourists not 200 yards away in Trafalgar Square, I sit, nervously sipping my Verdicchio de Castelli chilled white wine. Then, the door is pushed open, and a tall, saturnine figure enters.  "Are you..?"
"Have you got the stuff"?
Yeah. It's here.

He throws a brown envelope onto the table.
Tender for the provision of XXXXX.

This is it. The first new Open Procedure, no Pre-Qualification Questionnaire, cut-to-the-chase, UK public sector tender that we've seen. It's a wider public sector (not Whitehall), collaborative type contract for a pretty standard / ubiquitous category.

So.. what does it look like? It looks like a PQQ and an ITT glued together into one document. In fact... that's exactly what it is.  You don't get your ITT 'solution' section even considered by the evaluators if you don't get through the 'PQQ' section.

The capability and capacity questions are such that frankly, if you're not already doing something pretty much the same as the requirement here, you won't stand a chance. And the turnover 'cut-off' point in the qualification part of the document  gives SMEs no chance at all.

Does it do what Francis Maude is trying to achieve in terms of trying to encourage smaller firms, innovation and so on? I don't think so. It is actually more onerous for any supplier (let alone an SME) to complete than a traditional PQQ - you're doing the  tender stuff as well as all the usual PQQ form-filling, which will turn out to be a waste of time for many bidders. And there's no way I can see that a smaller supplier, no matter how 'innovative' their solution, can get through the PQQ section with its turnover limits, and "have you done this sort of work before" questions.

Now maybe this is the sort of spend area that doesn't really need innovation; there's a grain of truth in that. This is also obviously just one example of the 'new' process. And this approach does arguably reduce the cycle time for the procurement by combining the two phases; but at the expense of creating more work for the supply base. (Previously, 30 suppliers did the PQQ, and then 6 or so would complete the ITT. Now all 30 effectively do both). Perhaps that in itself will put off some suppliers from wasting their time bidding - but was that the point of these changes?

So there is one benefit; but a couple of negatives to offset that.  And it will be interesting to see the reaction from the market, the Federation of Small Business and similar bodies if this is typical of the tenders we're going to see.

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Voices (11)

  1. Final Furlong:

    I think I just walked right by your desk!

    Were you were using two boxes of obsolete toner cartridges for a chair, and you had your own desktop printer, a copier and fax machine? You had a tumbler on your desk with a huge variety of pens in it – possibly one for each day of the month?

    I didn’t disturb you because you had your head in your hands, muttering something about another day wasted because the bespoke IT operating system had fallen over again and all of your spend analysis in a spreadsheet (clearly it took you hours) had been lost.

    Give me 5 minutes and I’ll meet you in the cafe in the basement – the one with the designer chairs and subsidised coffee – and we can have an ‘internal meeting’ there for the next few hours….

  2. Final Furlong:

    A CEO in the public sector once told me how their corporate procurement function “gave them procurements they didn’t want” while another senior stakeholder (and very senior civil servant) intimated that “we’ve no idea what goes on in procurement, nor why it takes so long”.

    Many requirements go through a set of filters as they canter along their course through the policy cycle, strategy cycle, procurement cycle, before they finally cross the finishing line to go into the delivery cycle.

    I wonder if this sounds familiar to some of you…

    A Minister (an MP) identifies a ‘gap’ in the market. This ‘need’ is then handed over to the ‘client group’ (aka the civil service supported by consultants). They shape into a ‘requirement’. They create a ‘policy programme’ and after a significant period of time they publish a ‘green paper’. After another significant period of time, something truly magical happens – it changes colour – and it becomes a ‘white paper’. (It can take up to two years to change colour.) This white paper doesn’t incorporate how anything should be delivered, so the client group creates a ‘strategic delivery programme’ (aka the civil service supported by different consultants). They create a ‘business case’ which goes through another set of filters called ‘gates’. (Usually, these gates are very complex to unlock and then relock once through – so much so that they openly give the keys to consultants who then choose to ignore the keys and spend lengthy periods of time trying to unpick the locks with a bunch of tools.) At one of the gates, the business case is then handed over to procurement (aka the civil service supported by completely different consultants supported by a team of lawyers). They shape it into a ‘specification’. It can take two years to get through the procurement gate, 18 months of which is down to a very ‘popular’ process (with all senior stakeholders and suppliers) called competitive dialogue – adopted by procurement “because after four years they still don’t know what they want or know how it should be delivered”. It is finally handed over to an external delivery partner who (supported by a team of lawyers) have stated what they are actually prepared to deliver over the following decade. A new Minister (MP) arrives. Less than 6 months into its implementation cycle, the programme and the contract are cancelled. Everyone, including the civil servants and all of the consultants (but not the lawyers), all agree that it was never needed in the first place.

    If this doesn’t sound like a familiar to you, especially over the last decade, then you have been working in a different place, like Mars (Peter’s old firm, in which case, that’s private sector, and irrelevant) or on a different planet, like Mars.

    1. Dan:

      Do we work in the same office?

  3. Sandeep:

    I completely agree with Dan. IMHO real category managers who adhere to basic procurement & sourcing values bring greater value than changes in policy/procedure. At the end, procurement is a support function to the rest of the organisation and if it is staffed by not-so-knoweldgeable and not-so-efficient people, no amount of policing will help.

  4. Barry Henniker:

    Dan. I do substantially agree with your sentiments. However, laying blame at the policy “customer” doorstep is overly simplistic. Yes, often they do vacillate about what it is they really want – and why should they have any appreciation of capabilities of private sector markets? Some complex procurements are actually driven by policy and dogma for which policy portfolio “customers” are hounded for solutions by their political masters. Procurement professionals are (should be?) the bridge between them and the key players in the market and create a facilitation environment which will result both in clarity of the requirement and comprehensive specification to the benefit of both sides..

    1. Dan:

      Barry – I think we are in violent agreement. When I said customer, I suppose I meant the buyer (I wouldn’t expect the policy customer to have this knowledge)

      My personal experience when buying anything complex (e.g. IT system) has been that the procurement process has never delayed anything. All delays come down to not having the spec ready or understood resulting in it being revisited as understanding grows during the process itself.

  5. Dan:

    All of these LEAN reviews, process re-engineering etc is just playing around the edge. While I’m sure there will be a marginal time improvement – the real root cause of delays in public sector procurement is down to the customer not understanding its own requirements or what the market can provide.

    If public sector invests in buyers who take the time to know their category of spend (customer requirements and market) then the initial spec will be of a high quality and sail through the existing process.

  6. C:

    Barry is quite right on the Regulations point.

    I think that the underlying rationale is to get buyers to consider what they are buying through the Open procedure and for suppliers to consider what they are responding to. Buyers are being encouraged to break up requirements into smaller chunks as they are aware of the workload being placed on suppliers and to make clear up front what they actually want (not think about that after we’ve done a PQQ). Suppliers are being faced with the requirement up front so don’t waste their time on PQQs when they have no hope of winning the final business.

  7. Barry Henniker:

    Shall we just acknowledge the elephant in the room, just for a moment? The EU Directives and the Public Contracts Regulations all pivot, for some very sound logical reasons, on a transparent process to prequalify bidders invited to tender. Therefore without blatently flouting the EU Commission and the Regulations themsleves as they currently stand, there is no way that UK government departments can circumvent prequalification and stay in compliance with the Regulations.Whatever forms of “re-packaging” of the procurement cycle are dreamt up, you simply cannot get away from having to employ some form of selection and filtering criteria to support a commercial decision to award a contract. Maybe we should have suppliers queue up at the Whitehall Deli counter to get their numbered ticket for the raffle prize of winning a government contract. Damn, the elephant has just disappeared!!!

  8. Jon Harvey:

    Absolutely classic example of redesigning the forms without redesigning the process & thinking behind…

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