Procurement/disposal of assets

Prior to commencement of a procurement tender, the following needs to be considered:

  • Before you start your procurement process, always seek advice from your procurement and legal departments.
  • Check your own Fire Authority’s standing orders.
  • Ensure funding has been agreed

Before you advertise your requirement:

  • Plan your purchase - most major procurements take a minimum of 6 months.
  • Choose your team from the various disciplines, e.g. technical, operational, finance, procurement, legal, health and safety.
  • Have your specification completed and signed off before you go out to tender.

Choose your way to market - Note - that all procurement over the current threshold costs will need to be tendered via the EU procurement process e.g.

  • Restricted
  • Open
  • Competitive dialogue
  • Framework
  • mini competition

For more information and guidance, check the Cabinet Office website.  This provides a number of step-by-step guides on procurement procedures.  Each procedure is different and has its own requirements.  It is most important that you follow the rules – if you don’t, you are potentially liable to challenge.

Most authorities use an e-procurement system, for example Bluelight.  These systems will guide you through the process however they are not a substitute for checking that you have met your legal requirements and are complying with your standing orders.

If you choose the restricted or competitive dialogue procedure you will need to send out a PQQ (pre-qualification questionnaire).  This document must be sent to all potential suppliers who have responded to your notice and want to be considered for short listing.  As part of the PQQ you will need to develop a marking and scoring matrix to enable your team to rank the potential tenderers and exclude any that do not meet your requirements.  Unsuccessful suppliers need to be advised that they were not successful and why.

  • The purpose of the selection (i.e. PQQ) stage is to determine which suppliers have the technical and professional capacity, experience and financial standing to take on the contract.  It is not just an exercise in box ticking, as there are certain matters which you can only assess at selection stage and not when you are evaluating tenders.  For example, if a supplier does not have adequate experience in performing certain maintenance tasks this should be identified at selection stage and they should not be invited to tender.
  • In an open procedure, you still assess financial an technical capacity but this is done on a pass/fail basis only – you cannot shortlist suppliers and invite the best suited ones to tender
  • If using an existing framework you will (usually) need to run a mini-tender competition, unless all of the terms and costs are already specified for your service within the framework.  The ‘owner’ of the framework should be consulted to determine how best to run the mini-competition and any specific requirements.

Value for Money

  • The purpose of having a tender competition is not just to comply with the rules but also to ensure that you are getting the best overall value for the service you are buying.  No matter how well you think you know the market, suppliers need to be given an opportunity to respond to the specific requirements for a contract and to price their offers accordingly.  You should have a minimum of five tenderers in a restricted procedure, and three in a competitive dialogue or framework.
  • Keep in mind that new suppliers may enter the market or smaller providers may be able to offer excellent value-for-money for particular services.  In order to avoid excluding such companies as part of a larger contract, you should consider whether it can be divided into lots. If this is not appropriate, arrangements for subcontracting and consortium bids should be clear within the PQQ and tender documents.

Preliminary Market Consultation

  • It is much easier to get procurement right when you have a thorough knowledge of the market(s) you are buying from.  This includes not just the top-level suppliers but also the subcontractors who will be providing equipment, vehicles, specialized services etc.  Researching the market at an early stage means you’ll be able to prepare a better specification and save time in the later stages of procurement.
  • Although preliminary market consultation is not strictly covered by the procurement rules, it needs to be conducted in a way which avoids prejudicing any future procedure.  This can be done by advertising the consultation in the OJEU (using a Prior Information Notice – PIN) and inviting all interested suppliers to respond.  You can also hold one-on-one or group discussions/open days.  It is important to ensure that all such activities are well-documented and that you make the same information available to everyone.

Tender Period

  • During the tender period, tenderers may have questions and queries on the tender document.  It is essential to ask tenderers to put these in writing and provide written replies.  Copies of these replies need to be sent to all bidders

To avoid a possible challenge from any bidders during the tender period, avoid all informal contact with the bidders.  This reduces the risk both of a legal challenge and of bidders forming the impression that they have some advantage in the tender process – and thus putting in a less competitive bid.

All tenders and mini-competitions require you to have a weighted marking criteria and evaluation matrix, again so you can evaluate the short-listed tenders bid.  This needs to be included as part of the tender document, so the supplier knows how you are marking them.  Note: you cannot mark them on something they have already provided in the PQQ and been marked on.

 Once you have received the tenders back, you can go back to suppliers and clarify areas of their tender return document, but you cannot accept changes to their bid or negotiate on price or terms and conditions.

Once you have reached the preferred bidder stage, you must advise the winning bidder and at the same time, advise all the unsuccessful tenders and the reasons why they were unsuccessful.  This is known as Alcatel or the 10 day standstill period.  During this period, you cannot award the contract or undertake any activities under the contract.

Remember the whole tender process must be open and transparent. You also need to apply the principle of equal treatment, which means “similar situations must not be treated differently, and different situations must not be treated in the same way, unless such treatment is objectively justified.”  For example, if you request clarification from one bidder regarding the resources assigned to the contract, you should also allow other bidders to clarify any similar matters.

  • A contract award notice must be published in the OJEU to notify the market of the results of the competition.

Disposal of Assets

Consideration should be given prior to asset disposal and should scope security issues as set out the Best Practice Manual Section 20 on Security of Fire and Rescue Services Vehicles and Equipment, legal requirements as well as environmental developments.

However, legal disposal is vital and care should be taken that all legal aspects for procuring a disposal service and environmental waste regulations are covered.

Individual Fire & Rescue Authorities will have their own standing orders or information contained within Fire Authority hand books.

Opportunities Under New Procurement Directives

In 2014 new EU procurement directives are being adopted and these will be implemented in the UK by early 2016 (at the latest).  The revision of the directives is intended to simplify procedures and provide more flexibility for public sector buyers, as well as easing the burdens on suppliers of providing standard documentation.  It is also intended to make it easier to pursue broader objectives such as environmental and social policies when procurement is carried out.

Fire authorities should be aware of the changes in the directives so that they can make the most of these new opportunities and ensure compliance.  The main changes are highlighted below, and further information is available from a Procurement Policy Note published by the Cabinet Office.

  • Move to mandatory full e-procurement by 2018
  • Lighter regime for social, health and related services
  • New concessions directive
  • New grounds for exclusion of bidders
  • Changes to selection criteria
  • Self-declarations and verification
  • Conflicts of interests – must put procedures in place
  • Two new procedures: competitive procedure with negotiation and innovation partnership
  • Changes to end stages of competitive dialogue procedure
  • Changes to award criteria
  • Public-public cooperation (e.g. Teckal companies and shared services)
  • Abnormally low tenders – mandatory rejection in some cases
  • Modifications to contracts – rules on when a new tender is needed
  • Joint purchasing and framework agreements
  • Subcontractors and SMEs – explain if not divided into lots
  • Environmental and social considerations – including life-cycle costing