Tendering for contracts: an introduction wiki

Getting involved in tendering and winning contracts.

Finding opportunities to tender

If you are clear that public service delivery is the right strategy for you and you have a broad understanding of what the commissioning and procurement process involves, then your next step is to find out about the opportunities there are for you to tender.

There are a number of different ways of finding out about tender opportunities. In some cases, only organisations on approved provider lists are invited to tender.

You may be tendering to retain the right to continue delivering an existing service. Being the incumbent can involve particular challenges, as it can sometimes be harder to introduce new ideas into the bid, when you know the realities of what is involved.

The tender process

Although the tendering process varies according to the actual procedure being used, these four elements, identified by the Finance Hub, are common to all tenders:

1. Advertisement

• expression of interest (EOL)
• issue of tender documents to those who have responded.

2. Selection

• submission of pre-qualification questionnaire (PQQ) - read what to expect in a PQQ
• scoring of PQQ.

3. Award

• applicants successful at PQQ notified
• invitations to tender (ITT)
• submission of tender documents, probably including the method statement - read tips for compiling and costing your tender
• scoring of tender documents - read about tender scoring methods.

4. Contract

• either: the contract is awarded
• or: short-listed applicants are invited to make a presentation and then the contract is awarded.

There are specific rules and procedures for EU public procurement tenders.

Before you tender

Be proactive: Find out as much as you can about the commissioner’s objectives and requirements. If there is anything you do not understand about the tender process, don’t be afraid to ask the commissioner directly - and take the opportunity to tell them about the work you do.

Understand the risks: In all cases, you need to think carefully about the potential risks involved for your organisation in tendering for a particular service. As well as the strategic risks there are more practical risks to consider relating to the commissioner, the service or the nature of the contract.

The Finance Hub Tendering and Bidding Briefing highlights the following questions to think about before deciding to tender:

• Do you have, or can you develop, the capacity and infrastructure to deliver the service?
• What do you know about the particular commissioner? Do you want to provide a service for them?
• Do you have relevant experience in the client group, geography and type of work?
• Are all the clauses in the proposed contract acceptable to your organisation?
• Is the time that will be spent in submitting a tender worth it? Consider the contract value, the overall value to your organisation, and your likelihood of winning the contract.
  

If you have a negative response to any of the above questions then you should consider very carefully whether to tender. You may find it helpful to undertake a risk assessment.

Writing and costing your tender

Go through the invitation to tender pack carefully and find out exactly what the commissioner wants the service to achieve eg they may want to see innovation, cost savings or particular types of partnerships.

There is usually a period during which questions can be asked about the tender. Questions generally have to be submitted in writing and answers are shared with all parties who have expressed an interest.

Read the Finance Hub's tips for compiling and costing your tender

Tender scoring

With the exception of some situations, where the 'lowest price' selection methodology is used, the scoring of tenders does not depend on price. The more frequently used system is known as Most Economically Advantageous Tender (MEAT).

In this system, the price is scored first of all. This contributes between 10 per cent and 40 per cent to the overall score. The rest of the tender is then scored against a set of criteria which together make up the 'quality' element. Each criterion is assessed separately and then brought together to make up the balance of the total score.

As the quality element makes up between 60 per cent and 90 per cent of the overall total, for those who understand how this system works there are clear opportunities for organisations to be able to hold their price.

Tender shortlisting and the evaluation panel 

Following submission of your tender, you may be shortlisted and invited to interview. As with the tender evaluation, the interview will be scored, so you need to find out about the scoring system before the interview.

Make sure that your chief executive or a senior director attends, as well as someone who will actually be managing and/or delivering the service. It is a mistake to only have finance managers and fundraisers attending.

The time allowed for the interview will be limited, so make sure you get all your points over and don’t spend too long answering one question. You should always back up what you’re saying with reference to your experience.

Negotiation

The tender document will probably form part of your contract, so you must be prepared to deliver what you have said you will do, for the price you have stated. There may be some opportunity for negotiation at the pre-contract meeting, once you have won the tender. However, this will only cover minor elements of the contract.

See the OGC for post tender negotiation information.

The contract

The main elements of the contract should be in the Invitation to Tender, so you are aware of what you are expected to commit to. Make sure that the contract commissioner does not introduce additional requirements or constraints into the final document you are required to sign.

The Department of Health's standard contract will be used by primary care trusts with all their suppliers from April 2009. There is widespread concern about this in the sector. Many are pressing for a more proportionate approach, although they welcome the recognition given by the department in its guidance to the continuing role of grant aid. Share your views on this on the public service income forum.

For more information, including guidance on its usage, look at the standard contract.

Contract management

The contract will require you to provide regular reports on key performance indicators and on service outcomes. You must have systems in place to enable you to do this in a timely and efficient way. In some cases, payment may be linked to performance.

The Charities Evaluation Services' publication 'Your project and its outcomes' is a jargon free guide on how to measure outcomes.

You might also want to look at the National Audit Office’s guidance on ‘Intelligent Monitoring’ including principles of proportionate monitoring.

Feedback on your tender

Always ask for feedback on your bid, whether you were successful or not. It will help you next time round.

Help available with commissioning and procurement

• If you need commissioning and procurement support and advice, this NAVCA support map identifies organisations that provide this in your area.
• This NAVCA article explains how to challenge a tendering process that you think is unfair.

Useful links

• Tendering and Bidding Briefing: Give your tender a winning chance (Finance Hub) - much of the content in this section draws on this very useful publication, which includes case studies and checklists of useful questions.
• Commissioning and procurement resources (NAVCA)
• Selling goods and services (Finance Hub)
• Resources on public service delivery (NCVO Sustainable Funding Project)

Further reading

• The Complete Guide to Surviving Contracts for Voluntary Organisations (Directory of Social Change, £18.95)

Have your say

Have you had a tender accepted recently? Or have you been turned down a number of times?

Share your experience in the Commissioning and procurement forum.