Preparing a Tender from a Suppliers’ Perspective Peter Brennan Chairman, Bid Management Services

Procurement Reform Office of Government Procurement (OGP) set up on 1 January 2014 Achieving €500m in savings over next three years the strategic driver (in a market for goods and services worth €9bn) Centralised purchasing in OGP, HSE, Defence, Local Government and Education Category management approach (professional services, facilities, ICT, utilities, print etc.) Fewer tenders for larger amounts Clear commitment to work in interest of suppliers A very welcomed initiative from a suppliers’ perspective

Some Metrics (Tender Scout) 7,500 tenders published in 2013 (to a value of €12bn) 28% awarded to non-Irish companies 40,000 submissions made by 20,000 bidders Only 10% of SMEs tender; 70% are not even registered Only 55% of award notices above EU threshold published Fewer than 2% of Irish companies win tenders abroad

The Market (above EU threshold) Irish Contracts Non-Irish Contracts Irish Share (no.) Value of Contracts Irish Share (value) TED Notices Cross- Border Awards %€3.27bn84.8%1,5721.8% %€2.38bn68.4%1,2921.4% %€2.75bn89.4%1, %€2.04bn88.2%1,356

What are the Issues? Some rules not being applied Templates not used systematically Inadequate debriefings Poorly defined specifications Frameworks Access to buyers Need to encourage consortium bids Cost of litigation/lack of appeals process

Some Rules not Being Applied Circular 10/10 examples: required turnover should not be more than 150% of the value of the contract Negotiated procedure used in inappropriate circumstances Restricted procedure should be preferred option in vast majority of cases Buyers often cite non-binding ‘guidelines’ Inappropriate use of frameworks e.g. where a single supplier appointed But 63% of SMEs admit they do not understand the basic rules

Templates not Used Systematically SMEs welcome the deployment of templates However, used as an exception and not as a rule: only 50% of buyers using them (2012) Consistency of approach will result in better bids Include Government’s prompt payment terms in template contracts Stakeholders should be consulted about operation and revision of templates Key role for OGP to ensure templates used where this is appropriate

Debriefings Only 7% of suppliers get the feedback they request 90% of those who get a debrief says it is of considerable benefit The ‘Dear John’ letter issues far too often Buyers are hiding behind non-statutory nature of guidelines Many examples of best practice: Revenue, SEAI and Garda Siochána Specific guidelines on debriefings would help

Poorly Defined Specifications Smart market soundings and/or information days for complex procurements helps both sides Use standards e.g. FETAC Do not rush publication of RFTs where doubts remain about outputs of required training for example Clarify in RFT if budget approved Above all else, critical that award criteria are clear and weightings proportionate and transparent i.e. There are no hidden sub- categories Example: HSE RFT for supply of enhanced home care resulted in 260+ questions and recasting of the requirements – engagement helped both buyer and suppliers

Frameworks Panels still being used despite guidelines Restrictive procedure better option instead of single supplier frameworks The way forward but will they be SME friendly as expenditure is consolidated? Popular option: HSE framework for design services attracted 552 submissions with 35 selected Use of lots (and by region if possible) will help SMEs Encourage bid consortiums Start major frameworks with market soundings PINs should be published well in advance of major frameworks

Access to Buyers Meet the Buyer events a great success Dublin event (October 2013) attended by 747 suppliers and 130 buyers with €6m in contracts won Suppliers’ feedback universally positive Sectoral MTB events are being planned Important that OGP remains accessible

Consortium Bids SMEs need to be encouraged to form and join consortiums and trained to this end Buyers need to pro-actively support consortium bids, especially for frameworks Guidance should be published about promotion of bid consortiums InterTradeIreland’s new initiative in supporting consortium bids will help

Litigation and Appeals 35+ cases before NI High Court Very few Irish cases due to cost of litigation Having an OGP ‘Help Desk’ would benefit suppliers Guidance needed about impacts of recent ECJ cases e.g. Pressetext where issue of what constitutes ‘a material change’ critical OGP might consider low cost arbitration and mediation facility: NQAI’s appeals procedure an example of best practice

What Also Needs to be Done (1) Put guidelines for tender competitions in excess of €25,000 on a statutory footing Revise and update current guidelines (to reflect new EU Procurement Directives and OGP reforms) More training for buyers and suppliers More market soundings More feedback between buyers and suppliers Publish new suite of Public Procurement Plans

What Needs to be Done (2) Publish contract award notices (with contract values) for all tenders in excess of €25,000 Deeper direct engagement between OGP and suppliers Clarify what constitutes a ‘material change’ Publish detailed guidance about use of FOI in relation to procurement More e-functionality on e-tenders Improve collection and dissemination of statistical data

Win-Win The procurement landscape is changing for the better Buyers should help SMEs to leverage their successes in export markets Encourage innovation for sub-€25K pilot projects OGP on-going dialogue with representative organisations such as SFA and Chambers Ireland a positive development InterTradeIreland’s Centre of Tendering Excellence and Go-2 Tender Programme will make a significant impact

Contact Peter Brennan Bid Management Services /