From Suppliers Manual
A tender is a formal offer which is commonly used when supplying goods or services to the public sector but is also sometimes the process for the private sector. The buyers from an institution can set out the proposals and requirements for work to be done and the supplier has to bid for the tender and meet the criteria required.
A tender can be found as an advertisement, in trade journals or by a Tender Notification Service (TNS).
When tenders are above £179,934 they are placed in the OJEU (Official Journal of the European Union) which is a publication for all greater value public sector tenders in the EU. The EU states that all contracting authorities show they are working in a fair manner and are not favouring certain suppliers against others. A good definition of what the contract requires will help to ensure a good procurement process.
For EU procedures the most common processes are:
Open procedure – this is the process which allows any company to bid for the tender without prior selection. This allows 52 days to return tenders from the date of advertisement in the OJEU.
Restricted procedure – this is a two/three stage process whereby companies are allowed 37 days to express interest for the tender after being advertised in the OJEU and complete a Pre-Qualification Questionnaire (PQQ) to create a shortlist. If they are invited to tender then they have a further 40 days to complete this stage.
Competitive Dialogue Procedure – this type of tender would be advertised in the OJEU for 37 days and has to specify that this is the type of tender being used. The award criteria have to be based on best value. Then solutions need to be identified to meet the buyers needs, this will be done through dialogue between buyers and suppliers. From the conclusions of this dialogue suppliers are invited to submit tenders that will then be evaluated matching the criteria in the initial notice. The suppliers then have 30 days to submit before the tenders are evaluated.
Negotiated Procedure – These tenders are advertised in OJEU and have 37 days to complete then a shortlist must be made with at least 3 suppliers. Shortlisted suppliers are then negotiated with and have 40 days to complete the tender before they are evaluated.
These general timescales are reduced when using e-sender accreditation.
Expression of interest
The tender should be set out in a clear manner with tasks and deliverables explained in sufficient detail as possible to ensure less chance of legal action being taken.
Pre-qualifying stage
A PQQ is Pre-Qualification questionnaire, this helps create a short list of potential suppliers by asking them a series of questions covering subjects such as technical knowledge and experience, capability, financial standing, and specific questions relating to the current contract. This questionnaire is available to every supplier that has responded to the OJEU notice.
The PQQ should detail the scoring/weighting criteria in advance. This could be one of the following:-
• Quantitative – 100% Price – Lowest price wins.
• Qualitative – 100% Quality – Highest quality wins.
• MEAT – Most economically advantageous tender – tender comprising a mixture of quality and price.
Along with the PQQ, suppliers sometimes may be asked to submit additional documents and supporting material. These could include health and safety policies and environmental policies. Buyers can ask for references at this stage but they must not be used again later in the process to help make decisions when suppliers are invited to tender.
PQQ Evaluation
If organisations cannot demonstrate their capability to deliver the requirements of the tender then they will not be invited to the tendering stage.
Invitations to tender (ITT) issues
When the PQQ’s have been evaluated the short list is then invited to tender for the contract.
Invitation to tender may include (but not exclusive to) ;-
• A letter invitation outlining the details of all documents in the ITT package and the closing date for return on all tenders
• Standard terms and conditions
• Supplementary terms and conditions specific to the particular goods, works or services being tendered for
• Specification
• Pricing Schedule
Prepare tender and submit
It is essential that tenders are returned on time as tenders received after the closing date may be disqualified, this is an institutional decision. Understanding how a tender will be evaluated will be extremely important so it is knows exactly what the buyer is looking for therefore the supplier can match the tender to the buyers requirements. The buyer will state which elements are more important than others, which information is required, and the supplier will also be informed of any standards or equipment that are required to carry out the contract.
Tender evaluation
The returned tenders will all be opened at the same time at an opening ceremony and evaluated to establish which supplier is the most suitable to carry out the contract according to the scoring criteria which was set out in the initial tender documents. The tender will be evaluated on best value or lowest price.
The evaluation panel will evaluate the tenders based on the proposals and the price to fully deliver the contract. The tender can also be evaluated on criteria such as - if it had been submitted in the correct way and if the tender instructions have been complied with.
The panel will need to evaluate which organisations meet the requirements of the ITT, Which tender best meets the specification requirement, which tender offers the best price and then which tender offers the best overall value for money. The price will be evaluated on the basis of the whole cost of the contract, affordability and a good commercial arrangement including a fair return for the supplier. The assessment for value for money will have been decided at the beginning of the process along with the price and quality scoring split.
All the above criteria will have been weighted in order of levels of importance and some tenders may be excluded if the criteria are not met.
Tenders are usually scored out of 100%, for example, to establish best value for money they may allocate 60% to tender price and 40% to tender proposals, although these to vary based on institutions internal decisions.
The scoring criteria may be from 0-5 for various aspects of the tender, with 0 being very poor and 5 being very good. There is not just one way of scoring but this is a common system among buyers.
Contract award
After the tenders are received and have been evaluated the contract will be awarded to the most suitable supplier. Both successful and unsuccessful candidates will be notified in writing of the awarded tender. However this decision is not final until the standstill period is over.
Standstill period
When a contract is intended to be awarded there now needs to be a standstill period. This is to ensure that businesses applying for tenders can have feedback and the score of the awarded contractor in order to be able to challenge the decision and ensure the tendering process was done fairly and correctly. This came into force in 2006 following the Alcatel ruling. This standstill rule ensures that all suppliers, whether successful or unsuccessful, should be advised of who was awarded the contract and must de-brief the unsuccessful candidates within 15 days of a suppliers request to do so.
The mandatory standstill period is 10 days, which gives an opportunity for communication between the buyers and all the suppliers to de-brief and conclude the contract. It is legally required that the information to the unsuccessful suppliers must include; award criteria, the name of the winning supplier and good characteristics that the successful tender displayed.
This feedback is especially useful for businesses as it helps them to improve their process for future tenders they apply for.
This period makes sure there are guidelines for the amount of time taken for the supplier to request feedback and to receive response, giving the opportunity to take the case to high court if considered unfair.
If an unsuccessful supplier wishes to take the decision to court within this period then the contract cannot be concluded until the court outcome.
All award notices must then be placed in the OJEU within 48 days of award.
