streamlined tender evaluation presentation

Streamlined Tender Evaluation Process (STEP)

Low cost, fast tender evaluation procedure to deliver products and services which are better

than specified & vfm requirements

Facilitating reduced workloads, better contract outcomes and working with small/medium enterprises (SMEs)

Facilitating reduced workloads, better contract outcomes and working with SMEs

Why STEP?

• Reduced work and time involved• Improved contract outcomes• Reduced risk • Easier to engage directly with SMEs (small/medium enterprises)

– Facilitates improvements, innovations and service• Helps with (some) problematic procurement • More competitive, innovative SMEs and jobs


Problematic Procurement

• STEP can help where:– Socio-economic evaluation criteria used

• Local social needs/benefits and employment

– Working with innovative products or companies– Risks (to successful outcome) are high– SME has no/little existing track record– Short timescales/high workload pressures– Test the market/high quality needed– Frameworks deliver poor value/results/quality


Origins of STEP

• Participation in UK Gov CO SME Test Group– Problems of SMEs working with Public Sector

• Complex Prequalification Questionnaires (PQQs)• Framework agreements (large and/or wide scope)

– Time/workload pressures on buyers• Need to assess for successful outcome• Need for more streamlined process

– Reduce efforts on unsuccessful tenderers


Overview of STEP

• Step 1 Select the best choice• Step 2 Check technical/commercial

compliance• Step 3 Check contract fulfilment assurance

Note: Detailed prequalification of potential tenderers, at start of procurement, is not needed


STEP 1 Selecting the Best Choice

• Grade Tenderers’ Unique Selling Propostions– What is uniquely beneficial/value to end-user– Work from best to least important– Listed at front of tender (in order of importance)

• Select winner with highest rating USPs


STEP2 Check compliance

• Check technical/commercial compliance– Against specification, workscope, standard conditions etc

• Resolve any issues• If important issue unresolved select next

highest rated tenderer


STEP 3 Assurance

• Check what is proposed to deliver contract– Assess risks and mitigation measures– Review Management plan/arrangements,

resourcing, methodology etc• Unacceptable residual risks – select next

highest rated tenderer


Advantages of STEP

(Unique Selling Propositions)


USPs of STEP

• Better products and services– Exceed requirements of specification– Continuous improvement and innovation


USPs of STEP

• Reduced time, effort and resources– Reduced time on unsuccessful tenderers– Only examining their USP list not full tenders

• Concentrate efforts on best choice– Increased likelihood of find/correcting problems


USPs of STEP

• Educate buyer/end-users about products– Access to wider range of products and services– Learn about value adding features– Additional useful information available

• Role for less experienced persons


USPs of STEP

• Easier/less costly for SMEs to form consortia– Develop consortia plans/details when:

• Full workscope is known• Chances of winning work are good (USPs)

– More level playing field for SMEs• Identify possible collaborations during STEP

– Complementary USPs


USPs of STEP

• Less work required from SMEs (or others)– No need to complete complex PQQ when:

• Chances of winning work are unknown• May eliminate need for complex PQQs

• SME can decide whether to tender or not• Potentially reduce further work needed


USPs of STEP

• Risks to successful outcome reduced– Assessing risks directly– Assessing pro-active measures – forward looking

• Applicable to new businesses• Applicable to innovations• Fits in with later Plan, Do, Check, Action cycle


USPs of STEP

• Easy to identify impropriety– Will stand out in each Step (of process)

• Good deterrent effect (on impropriety)– Tenders and tenderers– Evaluation– Spurious/weak (discrimination) claims

• Can anonymise data for Step 1


USPs of STEP

• Easy to implement– Suppliers know their USPs (and competitors)– Can superimpose on existing process– Can combine with other evaluation criteria– Flexible, can be adapted to situation


USPs of STEP

• Subtle beneficial effects present– For buyers to facilitate process– For buyers/suppliers to be proactive for assurance– Scalable to complexity, innovativeness of offer– Changes mind-sets and expectations– Better understand social/public service aspects


USPs of STEP• Innovative Pricing, Risk Management/Sharing

– Additional information available (from STEP) on:• Risks to a successful contract outcome• Proactive management for a successful outcome• Risk mitigation measures (existing and proposed)

– Potential to:• Reduce risk premium (fixed price)• Accurately monitor rate prices against progress• Risk share between buyer and supplier• Apportion contract to fixed and rate prices segments• Incentivise supplier against goals


Flow Chart of STEP

USP = Unique Selling Proposition (features of product or service offer/proposal which are uniquely advantageous or beneficial to customer and not offered by other tenderers or suppliers. Listed by tenderer in order of importance in their tenders)

Streamlined Tender Evaluation Process using USPs (and demonstrating value for money) and contract fulfilment assurance

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Tender Documents

Review USPs in all tenders and grade/rate in order of importance –

Consider price/VfM

List/comparison of major USPs from

all tenders

Can USPs be graded?

Can best offer be

selected?

Can risks be

accepted?

Review best offer tender for risk of

non contract fulfilment

Recommendation and documentation for

contract

Review Best offer tender/proposal for technical and

commercial compliance

Can non- conformances be

resolved?

Review 2nd Best offer for technical and commercial

compliance

Can non- conformances be

resolved?

Mitigate unacceptable risks to acceptable level. Resolve with tenderer as

necessary

Conventional technical and commercial evaluation of all

tenderers against ITT, workscope and specification

Yes

No

Yes (one or two clear best offers)

No

Yes orno non conformances

Yes

No (and price cannot be used to provide a USP)

No

Yes orno non conformancesNo

Traditional error prone and resource intensive

comprehensive comparison of all offers etc


STEP Change

• Use below EU Procurement thresholds– More flexibility in rules– Less bureaucracy

• For products and services• Add to requirements in Invitation to tender• Retain PQQ stage (if required)

– Need less PQQ information• Use a pilot/trial, adapt to required use


About Green Leader Limited

Technical Consultancy Railway Electrification

Advising Clients on complex commercial, technical, operational and safety issues

Experience related to complex procurement (within rail industry UK and international)Reducing workloads, improving outcomes


Further Information

Nigel Moore, Green Leader Limited21 Foxmoor CloseOakley, BasingstokeHants, RG23 7BQ Tel +44 (0) 1256 781739Mobile +44 07944855611www.electricrail.com www.greenleader.co.uk


Questions?


FAQs on STEP

Tender evaluation criteria (Public Sector)?MEAT using USPs and compliance verification(MEAT – most economically attractive tender)

Too many tenderers?Grading using USPs much faster than PQQs

No significant USPs or a Commodity purchase?Significant USPs can be offered with commoditiesUse price, ask for tiebreaker or do full evaluation


FAQs on STEP

Too many USPs?Good news, also some may not be real ‘U’SPs

USPs cost more?Sometimes – calculate Vfm (as part of MEAT)(Vfm – value for money)

Socio economic evaluation criteria (SEC)?Grading USPs can include SEC and G’ment policy


FAQs on STEP

EU Procurement Legislation?Open process, forward looking award criteria, use mainly below thresholds, transparent, fair

Prohibition on negotiation (EU rules)?Discussions/clarifications during Steps 2 and 3 are part of due diligence – not negotiations

What are the risks (EU rules)?Spurious complaints – hard to prove their case


FAQs on STEP

Draft EU Directive(s) published 20-12-2011?Complies above and below thresholdsFacilitates directive’s SME-friendly aims:

– similar bureaucracy-light order of activities (first ‘tell us what you can do’)

– use of more smaller contracts/lots

Assists use of socio-economic evaluationFacilitates innovation with reduced risks


FAQs on STEP

Contracts above EU thresholds?Appears to comply with EU open procedure rules? (early exclusion by backward looking criteria leads to restricted procedure, just before contract award by forward/backward criteria may be permitted)Needs confirmation with EU and UK rules

Crooks and the like?Exclude from start of procurement process, as rules


FAQs on STEP

Quality/Qualifications Based Selection or QCBS?Consistent with, USPs improve deliverables

Adversarial relationship (buyer-supplier)?Should improve situation (common goal)

Weakens buyer’s/end-user’s position(s)?Strengths it throughout commissioning, procurement and contract delivery processes


FAQs on STEP

Framework agreements or contracts (and STEP)?Improves specialist frameworks (QBS+USPs+A’e)Reduced workload on wide-scope frameworks

Facilitates ‘open’ frameworks (specialist and wide) (open procedure for framework and following MCs)

– Wider choice for mini-competitions (MCs)– Reduced workload for framework and MCs– More transparency and fairer evaluation criteria

• MEAT using USPs and compliance for framework and MCs


FAQs on STEP

Too good to be true?Not in comparison with traditional evaluations Not for every procurement

Too complex/novel to work?Needs a plan and ‘success factors’ in place – SFs = motivation, supportive framework, competency, management deployment


FAQs on STEP

How easy/quick is implementation (of STEP)?Everyone is different, techniques exist to help easy/quick implementation (pilot or rollout)

Will suppliers co-operate?For them – more business, less work (eg on PQQs) and can showcase delivering better value

Costs to implement (across organisation)?Varies - suggest a discussion to estimate


FAQs on STEP

More background available?Much, including underlying theory, assumptions

Is there something better?Yes, in pipeline if STEP gets used by Public Sector

How could STEP get better still?Tell us your priorities, needs and problems