Peter BirdPrimary Business Support         www.primarybs.co.uk           Tel. 01264 324403
Social housing Procurement, be it in local authorities orhousing associations, trusts etc is subject to the PublicContract...
   Specifications can be revised, brought up to date    and improved based on experience   Can be used to bring a number...
Procurement by Public Bodies must be, andmust be seen to be:  Non-Discriminatory  Transparent  Competitive
   Purchase   Simple quotations   Simple estimates   Tendering    ◦   Open    ◦   Restricted    ◦   Competitive Dialog...
   Below EU Thresholds   Over EU ThresholdsThresholds are currently: £173,934 for goods and services, and £4,348,350 f...
What about mixed contracts?Eg Double glazing installations   Boiler installations   Kitchen refurbishmentsValue of element...
   Open Procedure   Restricted Procedure   OJEU   Non OJEUOJEU = Official Journal of the European UnionCompetitive Dia...
Open – Advertise contract and allow any biddersto compete for the contract.  Single process but need to assess potential  ...
Strengths Quick, straightforward, easily understood when used for suitable contracts.Weaknesses Can be time consuming if a...
Two part process:   Pre-Qualification Questionnaire (PQQ) – selecting    suitable suppliers – ‘selection’ stage   Invita...
Strengths Allows suitable companies to be selected before  full tenders invited and evaluated Makes the process more man...
Advertise contract and invite ‘expressions ofinterest’, issue PQQ to assess:  Business stability (do they do what you wan...
Selected suppliers only invited   Can be price only.   Can include assessment of Most Economically    Advantageous Tende...
   Make questions relevant   Make them easy to understand and make it clear    what you are looking for, stating which e...
   Determine the model before issuing the PQQ/ITT   Only evaluate each item at one or other stage – not    both   Estab...
Q1 Provide a method statement about how you will keepresidents informed about the work to their home, includingissues rela...
Q1 Scores (Weighting 20%):Contractor A   6 points 6/10                 x   20   =   12Contractor B   3 points 3/10        ...
Q2 Scores (Weighting 20%):Contractor A   3 points 3/10     x   20   =    6Contractor B   10 points 10/10   x   20   =   20...
Prices (weighting 60%):Contractor A    £25k                25/25 x 60 = 60Contractor B    £28k                25/28 x 60 =...
Contractor   Q1   Q2   Price   Total    A        12   6     60      78    B        6    20    54      80    C        20   ...
Reasons given for avoiding OJEU: Expensive – Actually Free Complicated – In reality only two extra elements for Open and...
   Only necessary for contracts with total potential value above    threshold   May be used for lower value contracts  ...
   Set up by Public Bodies, or organisations working on their    behalf   Wide range of subjects covered   Cross organi...
   Tendering does not remove the need for S20    consultation of leaseholders and tenants who pay a    variable service c...
Procurement can be technical, but offers anopportunity to save time and money and to    address out of date specifications...
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An Introduction to Procurement in Social Housing

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An introduction to procurement in social housing in the UK including an introduction to OJEU procurement

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An Introduction to Procurement in Social Housing

  1. 1. Peter BirdPrimary Business Support www.primarybs.co.uk Tel. 01264 324403
  2. 2. Social housing Procurement, be it in local authorities orhousing associations, trusts etc is subject to the PublicContracts Regulations 2006:…the UK Government has accepted the EuropeanCommission’s view that Registered Social Landlords are to beregarded as Bodies Governed by Public Law (BGPL) andtherefore must comply with the requirements of the EUPublic Procurement Directives, where relevant.
  3. 3.  Specifications can be revised, brought up to date and improved based on experience Can be used to bring a number of contracts together Terms and conditions may be out of date Costs can be reduced by the competitive element Good practice to periodically test the market Opportunity for resident involvement and focussing the contract on resident needs, eg Tenant Offers
  4. 4. Procurement by Public Bodies must be, andmust be seen to be:  Non-Discriminatory  Transparent  Competitive
  5. 5.  Purchase Simple quotations Simple estimates Tendering ◦ Open ◦ Restricted ◦ Competitive Dialogue ◦ Negotiation
  6. 6.  Below EU Thresholds Over EU ThresholdsThresholds are currently: £173,934 for goods and services, and £4,348,350 for works (January 2012 thresholds, reviewed every two years)
  7. 7. What about mixed contracts?Eg Double glazing installations Boiler installations Kitchen refurbishmentsValue of elements taken into account, cost of goodsVs cost of works
  8. 8.  Open Procedure Restricted Procedure OJEU Non OJEUOJEU = Official Journal of the European UnionCompetitive Dialogue and Negotiation is less common and not covered in thisintroduction
  9. 9. Open – Advertise contract and allow any biddersto compete for the contract. Single process but need to assess potential suppliers’ suitability to do business with as first stage of evaluation and all who pass must be evaluated fully.Suitable where Requirement is relatively straightforward Smaller number of bids is anticipated Work to prepare bids is modest
  10. 10. Strengths Quick, straightforward, easily understood when used for suitable contracts.Weaknesses Can be time consuming if a lot of candidates pass the qualifying questionnaire since all must be fully evaluated. Can make providing feedback time consuming. Can require a lot of input from bidders perhaps without significant chance of success
  11. 11. Two part process: Pre-Qualification Questionnaire (PQQ) – selecting suitable suppliers – ‘selection’ stage Invitation to Tender (ITT) – appointing the right contractor – ‘appointment’ stageSuitable for most contracts where getting the rightcompany involved is important
  12. 12. Strengths Allows suitable companies to be selected before full tenders invited and evaluated Makes the process more manageable Reduces workload for contractors and encourages participationWeaknesses Can take a long time to complete the process
  13. 13. Advertise contract and invite ‘expressions ofinterest’, issue PQQ to assess:  Business stability (do they do what you want and will they continue to do so)  Financial strength (set parameters)  Insurances (consider what is required)  References (consider what they offer)  Experience (is it relevant)  Technical suitability (Do they have suitable skills)  Mandatory questions and Discretionary exclusions Consider using the Cabinet Office (OGC) format.
  14. 14. Selected suppliers only invited Can be price only. Can include assessment of Most Economically Advantageous Tender (‘MEAT’) – Quality/VFM. Includes all legal T&Cs ‘The more details that you can provide the keener will be the bids’
  15. 15.  Make questions relevant Make them easy to understand and make it clear what you are looking for, stating which elements (and sub-elements if you have them) of the response will attract points – this is required Assessing evaluation questions is about selecting the best supplier – it shouldn’t be about assessing the ability to interpret your question and giving wordy responses. It isn’t a comprehension test! Beware responses that impress but don’t answer the question – stick to the pre-agreed criteria Only assess what you are told – don’t use other knowledge of the bidder
  16. 16.  Determine the model before issuing the PQQ/ITT Only evaluate each item at one or other stage – not both Establish both models at the same time to give comprehensive coverage and to ask suitable questions at relevant stage Weight questions according to their importance At ITT stage, determine the weight of price Vs. Quality elements, eg 60% Price 40% Quality
  17. 17. Q1 Provide a method statement about how you will keepresidents informed about the work to their home, includingissues relating to slippage – 25% of overall score ScoresComprehensive answer likely to exceed requirement withelements of added value - 10 pointsSatisfactory answer covering required elements to keep residentsaware of programme and how it will affect them with propertyspecific information and details of communicating slippage – 6pointsAnswer with some missing elements – 3 pointsUnsatisfactory answer – 0 points
  18. 18. Q1 Scores (Weighting 20%):Contractor A 6 points 6/10 x 20 = 12Contractor B 3 points 3/10 x 20 = 6Contractor C 10 points 10/10 x 20 = 20Contractor D 0 points 0/10 x 20 = 0** You may have a rule that says any score below a threshold will disqualify but you must make this known to bidders at the outset
  19. 19. Q2 Scores (Weighting 20%):Contractor A 3 points 3/10 x 20 = 6Contractor B 10 points 10/10 x 20 = 20Contractor C 6 points 6/10 x 20 = 12Contractor D 3 points 3/10 x 20 = 6
  20. 20. Prices (weighting 60%):Contractor A £25k 25/25 x 60 = 60Contractor B £28k 25/28 x 60 = 54Contractor C £35k 25/35 x 60 = 43Contractor D £10k* Eliminated* You may have a rule about unrealistically low prices, again, you must let biders know this at the stage of inviting tenders
  21. 21. Contractor Q1 Q2 Price Total A 12 6 60 78 B 6 20 54 80 C 20 12 43 75 D 0 6 - -
  22. 22. Reasons given for avoiding OJEU: Expensive – Actually Free Complicated – In reality only two extra elements for Open and Restricted Tendering: Contract Notice and Contract Award Notice Time consuming – Actually not much longer than other tendering if that is done properly We don’t want European Companies bidding; they couldn’t deliver in the UK – Remember the requirement to be non- discriminatory for any procurement We don’t understand it – It will be cheaper to learn it than to re-tender more frequently to avoid it
  23. 23.  Only necessary for contracts with total potential value above threshold May be used for lower value contracts Sets timescales (except Part B Services – see below) Has Part A and Part B categorisation of services (Part B being less onerous – contract notice; contract award notice only) Has exceptions to timescales in particular circumstances Adds a requirement for Contract Notice and Contract Award Notice Has option of Prior Information Notice to reduce timescales Standstill period between selection and appointment (Alcatel period) All OJEU contract awards to be included in statistical return of contracts awarded
  24. 24.  Set up by Public Bodies, or organisations working on their behalf Wide range of subjects covered Cross organisational arrangements possible Organisations must be properly described in setting up the framework Maximum length of Framework Agreement is 4 years Maximum length of contract on ‘call off’ is 4 years Must follow the arrangements in the Framework Agreement but there may be elements to be customised Can be quick to implement Can get support from the owner of the Framework Agreement
  25. 25.  Tendering does not remove the need for S20 consultation of leaseholders and tenants who pay a variable service charge. S20 consultation arrangements accommodate OJEU procurement S20 consultation applies to Framework Agreements where appropriate and failure to comply may prevent ‘call-off’
  26. 26. Procurement can be technical, but offers anopportunity to save time and money and to address out of date specifications. Any Questions? Call Peter Bird 01264 324403 07780 600953

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