Gwerth Cymru Value Wales Supplier Selection Nick Sullivan Gwerth Cymru/Value Wales 2 Gorffenaf/July

Selection Requirement for suppliers to satisfy minimum levels of economic & financial standing and/or technical or professional ability Focus on the suitability of a supplier in principle to deliver the contract

Selection Selection Criterion are those that will apply to select supplier to be invited to tender/participate/negotiate Based on: Economic and Financial Standing Technical and Professional Ability

Selection Open Procedure – all supplier which pass the selection stage will be eligible to proceed to award stage Restricted, Negotiated & Competitive Dialogue Procedure – all suppliers which pass the selection stage will be eligible to proceed to award stage unless the contracting authority has clearly communicated the objective and non-discriminatory criteria by which it will limit the number selected to participate. Must also clearly specify the minimum number of suppliers to be selected.

Selection Mandatory Exclusion –Paragraph 23 of the Public Contract Regulations set out criterion for Mandatory Exclusion of suppliers –Financial Impropriety

Award Contracts awarded on the basis of one of two options: –Lowest price, i.e. the lowest priced tender wins. No other element of the tender may be taken into account; or –The most economically advantageous tender (MEAT).

IMPORTANT Contracting organisations MUST ensure that selection and award criteria are not confused. Transparency –Contracting Authorities must be transparent on selection and award criteria, sub criteria and associated weightings

Lianakis – The requirement to clearly distinguish between selection and award stages. Rules that use of past experience must not be used as award criterion – selection criterion only Amaryllis – Transparency of criterion including sub criterion and any associated weightings. Case Law

Supplier Selection Options Two options for evaluating responses: Go/no go Scoring/ranking responses

Supplier Selection Options Personal Situation/Grounds for Rejection – definitely go/no go Economic/Financial Standing – both go/no go and ranked approaches used Technical/Professional Ability – possible to combine go/no go and ranked approach

Selection With Go/No Go Criterion pass marks to be risk assessed Clearly communicates required selection standard – allows suppliers to deselect Pass marks must be justifiable Completely objective

Ranked Selection Requires clearly defined method for ranking PQQs Allows differentiation of bidders Doesn’t clearly communicate pass requirements Can become subjective

An example..Financial Appraisal OGC - Financial Appraisal Guidance financial appraisal is a selection criterion analyse financial position…determine the level of risk business judgement to assess risk turnover can be a useful indicator financial appraisal is part of broader, holistic assessment Opening Doors is consistent with this guidance

A £5m Contract Go/No Go approach Risk assessed minimum £18m turnover required SME, £20m turnover, multinational, £500m turnover = both pass But…… Ranked Approach Scores allocated based on overall turnover Multinational £500m turnover, 10 points SME, £20m turnover, 5 points

Financial Appraisal Risk based assessment set a higher financial standard where risk and consequences of failure are high set lower financial thresholds where risk and consequences of failure are less significant Important to get it right!

Getting Selection Right Selection criteria should be set for each project Ideally combine both go/no go and ranked approach Can we develop a more consistent go/no go approach? –Financials – what data is required to make an assessment? How will it be assessed? –Health and Safety – what data is required to make an assessment? How will it be assessed?

Questions