18 February 2010 | Bryan Avery and Paul Neill

Public sector buyers are not doing enough to help small suppliers win work. Bryan Avery and Paul Neill suggest improvements

‘Whitehall waste’ and ‘incompetence’ are surefire headline-grabbers, particularly when accompanied by criticism from the CBI and the Public Accounts Committee concerning public sector spending. The focus tends to be on a small number of high-profile, complex procurement projects.

But what about the bread and butter purchasing that accounts for most of the £220 billion annual expenditure on goods and services covered by thousands of organisations across the public sector? How are these buyers performing?

From our experience helping suppliers bid for work in all parts of the public sector, we see plenty of room for improvement in basic procurement capability and in how public sector buyers engage with the market. There is a lot of excellent practice in place, but many are still making life much too difficult for suppliers, particularly SMEs.

BAD PRACTICE

Four common examples of poor practice, which we see all too often, are vague and sloppy tender documentation; pre-qualification questionnaires that read like War and Peace; insufficient information on selection criteria; and a lack of post-tender feedback.

Vague and sloppy tender documentation

Perhaps the single biggest problem for suppliers is trying to work out what the buying organisation really wants. This can result in huge numbers of clarification questions at both Pre-Qualification Questionnaire (PQQ) and Invitation to Tender stages. It creates an industry in itself and adds to the workload for suppliers.

A recent government framework tender generated 100 pages of clarification questions and answers and led to two extensions of the tender timetable. In some cases, the requirement is so unclear and the documents so poorly drafted that we advise our client not to tender. Indeed, a lot of the time we spend supporting clients of all sizes on live tenders is spent interpreting the documents before we are able to start adding real value on honing and shaping the supplier’s submission.

Lengthy pre-qualification questionnaires

We sometimes wonder if there is a secret “My PQQ is bigger than your PQQ” competition going on in the public sector. Many are much longer and more complex than is necessary to assess the basic capability, capacity and financial standing of potential suppliers. It is meant to be a ‘ranking tool’ for selecting suppliers to invite to tender, not an obstacle course that only the bravest and most tenacious suppliers are willing to tackle.

The 35-page PQQ we reviewed for a relatively low-value training contract for a police force seemed almost designed to deter SMEs from bidding. Clearly, no stone was left unturned in the search for queries to include in the document, which had no fewer than nine separate questions on business continuity, 10 on quality assurance and seven on supply chain management.

Insufficient information on selection criteria

On OJEU tenders, public bodies are required to publish the selection criteria either in the Contract Notice or the tender document. The best practitioners provide detailed criteria and guidance on the scoring system. However, many go little further than giving a high level percentage split between price and quality, which is of little help to suppliers in knowing what really matters to the purchasing organisation and, consequently, what specific areas of capability to emphasise in their bid.

On a recent tender from an NHS Trust, the weightings for the selection criteria were simply stated as “very high”, “high”, and “medium”, with no further explanation. To compound the problem, areas of capability were included that had already been tested at PQQ stage. 

Lack of post-tender feedback

This is a particular problem at PQQ stage, where many public bodies appear to be unwilling to provide feedback to unsuccessful bidders. Perhaps they feel it is only worth debriefing at invitation to tender stage, which might explain why one of our clients had submitted over 30 unsuccessful PQQs but found it almost impossible to get feedback

 and was on the verge of giving up bidding for public sector business.

Whatever the reason, the result is that unsuccessful tenderers do not learn from their mistakes, and public bodies miss the opportunity to develop the potential supplier base and increase future competition.

These are not isolated examples. What comes through strongly is the sheer variety of approaches taken and the lack of consistency, including drafting what should be standard documents. This is a minefield for all bidders but for SMEs, who typically have very limited or no dedicated bidding resource, it can make the difference between whether or not to bid.

GOOD PRACTICE

Here are our four improvement ideas for better engagement with the market. They are just sensible, practical measures that, if adopted, would make a significant difference to the quality of the procurement process.

‘Road test’ tender documents

How many buyers get a second opinion on their tender documentation before publishing it? We recommend that as a mandatory step before publishing all OJEU tenders, the tender process and documentation is tested for:

Clarity - Is the specification clear and unambiguous? Is the process straightforward and easily understandable? Is the language and terminology simple and free of jargon?

Bureaucracy – Is the process and documentation proportionate to the value and complexity of the requirement?

Accessibility – Have you done enough to encourage suppliers of all sizes to bid and to minimise the costs of bidding? Have you tailored the process and documentation to give SMEs a fair shot at winning the business?

Undertake two-way post-tender feedback on performance

Public sector buyers need to be more proactive in offering feedback on performance after each stage of a procurement exercise. This is often seen as a chore, but is as beneficial for the buyer as it is for the supplier and should, in our view, be a standard part of the procurement process at Pre-Qualification and Invitation to Tender stages.  

Equally, we see little evidence that public sector buyers seek feedback on their own performance after the completion of procurement projects. The feedback process should work both ways, if maximum mutual benefit is to be gained. So, asking suppliers what went well with the procurement process and what could be improved can only help develop procurement capability. 

Stop re-inventing the wheel

There is excellent guidance available on public sector procurement, from organisations such as the OGC, together with lots of model documents and templates. So, why do so many buyers feel the need to re-invent the wheel? The ‘not invented here’ syndrome has affected public sector purchasing for many years, and is at the heart of the inconsistency in procurement practices that stop many suppliers, big and small, from bidding for public contracts and leaves others tearing their hair out.

Getting public sector buyers to use good practice tools and guidance readily available to them would be a giant leap in the direction of a consistent, standardised approach to engaging with the market.

Be more creative about encouraging SMEs to tender

There are pockets of really excellent practice around promoting the SME agenda in the public sector. In areas such as construction, for example, huge efforts have been made to simplify processes and make it easier for SMEs to access opportunities through initiatives such as the Constructionline Pre-Qualification database. Yet too often we see a one size fits all approach. Little attempt is made, beyond bland equal opportunities statements encouraging SMEs to bid, to engage seriously with SMEs – who, after all, account for 99 per cent of all UK companies and more than 50 per cent of GDP.

More needs to be done along the lines of a recent collaborative local authorities framework which:

• ran tender briefing sessions, at which a part of the presentation was devoted specifically to SME issues;

• divided the tender into lots, based on value, with an entry level lot aimed specifically at SMEs;

• held workshops for SMEs, to provide more detailed clarification and explanation of the framework;

• provided simplified documentation for the lower value lots, with fewer quality questions and lower pass/fail thresholds for some questions;

• emphasised the importance of content over presentation in tender submissions to reduce the burden for SMEs.

It is possible to be creative around the SME agenda, it just requires greater will on the part of public sector buyers. Despite the progress that has been made in improving procurement capability and professionalism, many suppliers continue to find selling into the public sector a daunting proposition.

Doing more to build the needs of suppliers into procurement processes, and applying good practice consistently across the sector, would make it more inviting to potential suppliers. That’s not too much to expect, is it?

* Paul Neill and Bryan Avery are principal consultants at The Bidding Consultancy www.thebiddingconsultancy.co.uk