PROACTIS Blog

Addressing the Transparency Barrier in Complex Tender Processes

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Blaenau Gwent County Borough Council is a Welsh local authority with an annual expenditure of around £130m. Although it is one of the smallest councils in the country it manages some sizeable tenders - not least, a joint £40m tender for a waste treatment project, and a major learning centre construction project currently underway to regenerate the site of a former Corus steel works.
As Procurement Manager Lee Williams explains, at £112m, the construction project is the largest tender process yet initiated by the council, although it is well used to running a wide range of tenders, from small, low-risk tenders to complex OJEU-related sealed bid exercises. Procurement is an increasingly regulated and compliance-driven process for the council. And this presents it with significant challenges, particularly at the high risk, high value end of the tender spectrum.

Q. What is the range of tenders you manage, and what resources does Procurement have?
A. Everything from pens and pencils to refuse and waste management, and construction contracts. The largest is £112 million worth of regeneration on a former steelworks site. We've got a central team of four people within the procurement function and procurement is devolved across the authority, with us having a mandatory involvement on anything above EU thresholds.

Q. What are the complexities of a typical procurement project?
A. We're currently running a joint £40m tender for procuring food and green waste treatment services. We're the lead authority for a Pre-Qualification Questionnaire (PQQ) exercise. In all, 13 councils are involved, and they have arranged themselves into four separate hubs. The PQQ will enable us to shortlist bidders. The next stage will be to enter into a competitive dialogue on a hub-by-hub basis. We've got a 60-strong team because of the size and complexity of the project. Since the PQQ was issued, we've reacted to more than 150 questions and clarifications, all conducted via the dialogue facility on the system, so you can see the logistical scale. As far as Blaenau Gwent is concerned, we'll also be using the system to support the competitive dialogue process for our own hub.

Q. Is this a typical cycle for the tendering process?
A. The cycle is typical, the scale isn't. There are 13 authorities involved - and as well as appointing officers to the team, we've appointed external advisers, and consultants for the financial, legal and technical aspects. They've all had input into the procurement cycle, and we're quite easily able to allocate external resources to the contracts through the system.

Q. What government guidelines must be adhered to during the tendering process?
A. At the lower end (up to £50,000), everything is governed by internal rules, which are the authority's Standing Orders for Contracts. Officers are able to use either an existing arrangement, or secure at least three written quotations.

Anything above £50,000 is subject to the formal tendering procedure, whether it's goods, supplies or works. The Standing Orders for Contracts allow us to source in a variety of ways: from local suppliers, or companies that have previously bid for contracts, for example. A lot of this is currently devolved within the authority.

That takes us up to Europe, where there is a minimum requirement for five tenderers. And again, this is devolved. Some departments seek advice and guidance from us. Others ask us to manage it on their behalf. For goods and services above the EU thresholds - £139,000 for services, and £3.5m for works - we have a mandatory involvement. At that stage we are responsible for issuing any contract notices and assisting the departments to structure the relevant documentation and evaluation criteria, and overseeing the evaluation and award process. Once we get above those limits we are governed by the consolidated supplies directives within Europe.

Q. The council is currently running its highest value tender yet. Can you describe some of the challenges?
A. This is a £112m learning centre construction project that we will build on the site of a former Corus steel plant. We could have gone out on one contract and awarded it to one developer, but we've gone down the framework route for the first time, to try and retain a competitive element throughout the process and gain best value for money. We will shortlist five bidders to this framework and they will be allowed to participate in any mini competitive element we have in each of the specific construction projects on the site.

Q. How do you ensure fairness and transparency in the awarding of contracts?
A. The climate is increasingly challenging. The latest case law and information we receive from the legal authorities is that everything has to be completely transparent, open and ethical. Everything that is added to or accessed must be part of a full audit trail. Because of the way we've structured the tasks to each type of procurement within the system, it's quite clear when the evaluation criteria need to be set.

Q. How do you manage ongoing contracts?
A. We are able to develop specific contract management programmes and requirements on an individual basis. By clicking on the system and the relevant contract, we can see that meetings are taking place, how the successful bidders are performing. There will be certain key points at which, if they do fall below a particular performance issue, we would flag it up with the department. It's all about transparency and visibility.

Q. How have you dealt with unsuccessful bidders?
A. We provide a basic response giving scores and an overview of bidders' shortcomings. We've always offered them the opportunity to come in and have a more formal debrief, particularly on the larger scale tenders, so that we can identify where we can add value and offer assistance, or recommendations on where they can change for future submissions. The information is held in one place. Being able to pull it together quickly gives confidence that the process is working correctly, so companies are not in a state of limbo waiting for feedback.

Q. How do you measure the success of a tender?
A. There are a number of KPIs that we look - quality of service, timeliness, whether is it meeting client requirements, how it matches up with the initial specification and the required outcomes. We also request feedback from the supplier - we think we know best, but we need to interact with the market and the experts, so we're constantly reviewing how we go to market. If there is potentially a better way of doing something, we would look to incorporate that into subsequent procurement processes.

Q. How do you measure the value of an automated tender process?
A. If we just take out the paper-mountains, the cost of printing and supplying hard copy documents, the saving of officers' time, the savings of automation will be significant. The fact that it's online, at desktops, means you don't have to attend meetings and be constantly on the road. And for best practice, the structure and the templates are right in front of you, so it's a helping hand for officers who are not used to going through this sort of process. One eye will always be on cost, but success could also be measured in an increased level of service for the same resources. The aims and objectives would be the same without automation: that's the challenging culture that local government in Wales has found itself in for the last decade or so, with constant cuts, and an emphasis on value for money and shared services.

Q. How has automation helped you structure the tender process more effectively?
A. We're able to categorise specific procurement processes - goods, services or works -and the relative values. If officers are not experienced in procurement, the system will take them through a step-by-step fully compliant procurement process. It gives a great structure to the process we need to follow at every stage, whether it relates to internal reports being required, or whether it's the EU timescales that dictate we need to do something by a given time. The fact that then we can identify and allocate the tasks to various team members gives a sense of ownership to all the team. Historically, they've built up a library of manual documentation, of basic templates, which need to be tweaked for individual procurements, but they can now locate them in a central resource, and they can be replicated on a contract-by-contract or tender-by-tender basis.

Q. How does automation make your job easier?
A. A lot of it is about visibility. We can allocate resources to each contract. From a management perspective, it gives me an early indication of workloads, and what we've actually got on. It also identifies if people aren't meeting targets and date requirements, and we can manage that accordingly - in my own team or in any department that's been allocated to the procurement teams. We're always under pressure time wise and people tend to work in minimum timescales, so they've got to be made accountable - and the system allows us to do that. It's all about transparency. There is a full audit trail at every stage of evaluation.

Q. How would you assess the benefits of eTendering over your previous procurement system?
A. The process used to be largely paper-based. For some of the quotations below £50,000, there was the odd exception where it came back as an email within a controlled environment. But as soon as we invested in the PROACTIS eTendering system, there was a drastic change. The individual procurement processes have remained the same, but it's so straightforward and easy to access the information, and to manage it.

Q. How does it help you achieve your goals - particularly transparency and value?
A. It's a constant learning process for us and as we roll it out to individual technical users, they soon appreciate the benefits, particularly from a time saving perspective. But it also allows us to run a tight ship across the council. It reinforces what we need to go through at every stage, while acting as a complete guide for non-procurement professionals, so that they can engage with the procurement process more fully than before. It's still early days. We started by using it as an introduction - managing RFQs for smaller contracts. But clearly, the higher value, higher risk contracts fit very nicely with the system and it has really come into its own with the complexities of the waste-handling contract. On the logistics side, the ease with which we can now manage the process from the desktop and reduce the traditional paper trail of tender documents is a great benefit. It's managed, transparent and there's a full audit trail.
 
 
 
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