Making a framework work

Date: 25th Jun 2020   By: Pat Condon   length: 15 minutes   Tags: Video Blog  

Video transcription

Hello and welcome to this presentation from Crescent purchasing Consortium. Today's presentation is entitled making a framework work. The objectives of the session today are to understand how a framework is constructed to understand what a framework delivers and to understand how to maximise supplier interest in your opportunity when utilising a framework and apply that thereafter for all your procurement activity.

So, what actually is a framework?

A framework is a potential procurement route to market and one of many that you can utilise. CPC frameworks are designed to meet the needs of an ever-expanding marketplace from both within education and also now to the wider public sector. A framework does not always define user requirements as these are determined at call off by the member and user themselves. A framework is not a contract of procurement between CPC and the supplier as this contract position is achieved at call off between the member and the supplier themselves. A framework is a list of approved suppliers that have been through a robust procurement process to obtain a place on the framework.

For CPC we have two areas that we assess:

  • pre-qualification or selection criteria
  • award criteria

So, areas of pre-qualification assessment include the following grounds which may lead to either mandatory or discretionary grounds for exclusion in accordance with the Public Contracts Regulations (PCR2015):

  • economic and financial standing
  • parent company information
  • joint venture proposals
  • technical and professional ability
  • the Modern Slavery Act
  • skills and apprentices
  • GDPR and data protection

Without passing this stage of the tender submission suppliers will not proceed to have their ITTs assessed. Our areas of award criteria assets will include the following:

  • Price
  • Quality
  • added value
  • social value

Once we've set the framework up this offers a compliant procurement route for our members to utilise for their procurement. It's designed to deliver value and comes with free advice and guidance from the CPC team.

So, what are the benefits of using a framework?

  • Firstly they're known for saving time and being easy to use when you're comparing to running a full OJEU process for a tender CPC have completed all the due diligence for you so we check the suppliers to make sure they're fit to be on our framework
  • We offer support and advice which is available from the contracting help desk and our regional procurement advisor teams
  • We publish guidance documentation and template ITT documents which are available from our website for you to download and all of this is free to use for all of our members
  • We also offer you free to use electronic portals so you have access to the markets and all of our suppliers very simply and very quickly
  • All of the contractual terms and conditions are agreed in advance so you know exactly what you are signing up to

So, what can a framework not deliver?

  • Firstly there are no guarantees as to how many suppliers on a framework will bid and this is true of all public sector buying organisation frameworks.
  • Secondly it cannot deliver compliance simply because it's used. Compliance is achieved by each member running their own procurement process in a manner that is compliant in accordance with EU treaty principles. It's not typically defined enough to meet the exacting requirements of members. To do this a further competition must be run and that's how your requirements are met
  • Finally, it cannot guarantee lowest price as the award criteria used by the PSBO will be based upon the most economically advantageous tender and will not be based upon price alone.

Now let's consider how a framework is constructed

The framework will generally have a defined lot structure and this can be as follows:

  • it can be single source across all CPC members
  • it can be category driven within the framework with separate Lots required
  • it can be a regional provision only
  • it can be a regional provision by member type for example we would split the Lots between regions for schools and academies and then have a lot for further and higher education
  • or we could do a combination that best suits the requirements of our members

So, what else do you need to know about frameworks?

Well CPC suppliers operate across both the public and private sectors and as commercial entities they select their bidding opportunities using commercial principles. As suppliers may be operating on numerous frameworks, which may contribute to those commercial decisions, a supplier is encouraged to bid for all opportunities well we recognise that it's not necessarily what always happens. We design our lotting structures to help mitigate the risk of low bid numbers, we undertake contract management reviews with suppliers where bid response rates is a standard agenda item. We cannot force suppliers to bid for all opportunities as this is not practical or enforceable but we can remove supplies from frameworks for poor performance and we do deem non bidding on a continual basis as being one of the reason to poor performance which can be a reason for a supplier being removed.

So, why do suppliers choose not to bid for your opportunity?

There are numerous reasons why a supplier may decide not to bid, they're wide and varied and will differ dependent upon what you're procuring. Importantly, every time a supplier prepares a bid or tender they incur costs. These costs can be significant, especially in consideration of complex requirements and this is particularly true in the area of outsourced services. Let's consider reasons from the supplier’s perspective and will now take you through some of the many considerations that our suppliers will contemplate and by no means is this list exhaustive.

So, why do suppliers choose not to bid?

  • Firstly, there's the value of the opportunity itself; is it commercially viable for them to put a bid in?
  • Secondly, the scale of the opportunity. Is the size of the opportunity during the contract term serviceable and manageable? If so they may choose to bid; if not they may decline.
  • Is the contract profitable for them? All suppliers will have business objectives with profit margins that they are looking to achieve. If your business does not offer them that opportunity they may decline to bid.
  • Where are you located? if you are located in a particularly difficult area to serve suppliers may be reticent to bed if they do not have coverage in that area or if they would struggle to cover it
  • Finally, competition. Is there a competitor that will offer a lower cost base? Sometimes on frameworks suppliers get to know the levels of costs that are being bid by other suppliers and therefore may take a decision not to bid if they know that a particular supplier will be bidding for a contract
  • Other issues include capacity. Does the supplier actually have the capacity to provide the goods or services requested? Sometimes suppliers may not even have the capacity to complete tenders particularly at key times of the year when all institutions seem to come to the marketplace at the same time to have refreshes to services done at the same point. During shutdown periods etc this can be particularly pressured for suppliers and on occasion they will make a decision not to bid
  • There may be some historical factors such as previous contractual issues with an institution that also deters the supplier from submitting a bid in the future
  • Suppliers also consider risk and if they perceive that the operational financial risk to their business is too high in consideration of the requirements within the ITT they may decline from submitting a bid. This can sometimes happen where TUPE and pension liabilities are deemed too high
  • They'll also consider the timeliness for the delivery of responses. If you, as an institution, have requested the ITT return in a very short timeframe that doesn't enable them to prepare a suitable bid they may well decide not to put a bid in at all
  • Other issues as we've already covered their timeliness of implementation are you asking for an unrealistic implementation time scale that needs to be thought about in consideration of the overall offer the evaluation criteria? Does the ITT evaluation criteria seem skewed or inconsistent with the specification or the marketplace in which it operates?
  • Is the ITT transparent, is it clear in relation in relation to what is required or is there any ambiguity in the documentation meaning that there's a high level of risk providing a bid
  • Suppliers may also choose not to bid based upon the quality of the information contained within the ITT if the ITT is poorly constructed and missing key information that may stop them from being able to prepare a fully costed bid for you
  • A couple of more contentious areas is there a genuine and open competition or is it simply a three quote exercise to retain the incumbent? Whilst this shouldn't happen, we do have instances where suppliers feedback to us that this is what they perceive as going on with a further competition
  • And leading on from that is it already decided who will win? Is the institution using brand names that lead directly to a selected supplier the use of brand names in a procurement is not allowed as it does not allow for equal treatment of bidders but sometimes when bidders see the brand names they simply choose not to put a bid in because in their opinion the outcome is already a foregone conclusion

So, given everything that we've just considered and the reasons why a supplier may not wish to bid, (and there are plenty of reasons there), how can you encourage supplier participation?

Let's have a look at that now. So even when you're using a framework your institution is the contracting authority and you own the procurement process so be creative. Always start with your own pre-market engagement to warm up the marketplace. Contact the framework suppliers in advance by email and phone to let them know that your opportunity is coming you can even use the CPC quick Quote Tool. It's always best to get the suppliers interested specifically where a procurement exercise is critical to you. A key message is to spend enough time preparing your invitation to tender so that it's easy to understand and contains all the information that any bidding supplier might require.

So what makes a good ITT document?

Firstly, have a Content page with all sections clearly referenced with their page numbers. Provide an overview of your institution which advises bidders of what you expect to gain from the contract award, tell them about your sites tell them about your learners, tell them about your growth plans tell them about your investment plans. Let them know what's going to happen to you during the term of the contract award. If it's an outsourced service include photographs as this helps to improve the bid for the suppliers. That helps them to visualise your requirements. Don't revisit selection criteria that was used by CPC in setting up the framework as this isn't allowed. Do ensure that you're clear and transparent as to how you will score all the ITT submissions with defined award and sub criteria clearly detailed in your ITT. Ensure that your award criteria adds up to one hundred percent and that the use of a sub criteria adds up within the appropriate sections to the award percentage that you've allocated. Ensure that any weighting is applied and is transparent and clear to understand and if you host a site visit ensure all bidders are invited and think about how you'll answer any questions to ensure equal treatment on the day. Ensure that if you have any implementation timescales for your project that these are realistic and achievable for the suppliers. To shorten implementation timescales often leads to poorly managed bids and a poor implementation process leading to conflict between the member and the supplier. Ensure during the tender process that any requests or clarifications are provided to all bidders to ensure equality of treatment and transparency ensuring that you give bidders enough time to respond to the ITT opportunity, this can be anything from 1 to 6 weeks or more depending upon the complexity of the requirement within your ITT and don't short list to undertake presentations if you don't need to. Invite all or none at all and if scoring them declare this with the percentage available marks within your ITT document. Frameworks don't generally allow for presentations in the award criteria so be aware that hosting one could potentially lead to a procurement challenge. Once you award the contract provide all the bidders with extensive feedback and this should include full scores achieved in comparison to the winning bid, a full breakdown of the rationale for the scoring and then compare that to the winning bid and also give the suppliers ideas on how they can improve their bid for next time. This is one of the biggest complaints CPC gets from suppliers that they get little or no feedback outside of the percentage scores achieved. Ultimately better feedback does result in better bids when the next opportunity arises so as procurement professionals we understand that it takes time to provide the feedback we provide extensive feedback as part of our award criteria when we go back to our bidders who've been unsuccessful because we have to under regulations but we also recognise this best practice to provide our bidders with as much information as possible to enable them to compete for the next opportunity.