Public procurement is the acquisition of labour, supplies, and services by public bodies. It can be used to purchase routine goods or to open formal tenders, Request for Information (RFI) or Request for Proposals (RFP) for large infrastructural projects. Any public authority needs to use this channel to acquire any sort of good and service.
But how should a tender be structured, and what are the key aspects to take into consideration when writing it?
Luca Bergonzi, Beta 80 Sales Executive authored an important Whitepaper for EENA, which answers these questions. Here is a summary of its key takaways.
The tender must first and foremost comply with the Directive 2014/24/EU which mandates that contract authorities must:
- Use open and transparent procurement procedures;
- Use clear and objective criteria, notified to each and all interested parties;
- Use broadly based non-discriminatory technical specifications.
- Allow enough time for submission of expressions of interest and tenders.
- Advertise it on the TED Tender Electronics Daily, the Official Journal of the European Union (OJEU) Supplement.
- Award it to the most economically advantageous (but not necessarily the cheapest) as per the 2014 Directive.
With this in mind, a contracting authority can begin to map out what their tender will look like. To do this we suggest the following steps to make the tender honest and fair to secure the best value for public money.
- Defining your resources
- Defining your needs, analysis, and scope
- Defining your criteria and scoring system.
- Handling clarifications
- Awarding the contract
Defining your Resources
Contracting authorities must first map out the pre-existing expertise and skill sets in three key areas: technical, operational, and legal. The aim is to find the best people and resource to manage each of these aspects. For the RFI and RFP to run smoothly the Authority needs to assess the technical requirements, understand the everyday challenges, and be prepared to answer any legal technicality. Defining the right team is key for a flawless procurement procedure, and to find the best product. The size of the team may vary according to the size of the project.
Defining your Needs, Analysis and Scope
Having a clear understanding of the issue and needs is key to set the right requirements and find the best solution for the problem. The Authority must carry out three specific activities:
- A issue analysis to clearly define what the problem is and how to solve it
- A needs analysis to ensure that the set requirements are thorough and complete.
- A scope analysis to define a few core elements (ideally one per tender) that are a must, and a list of wished-for but not essential elements.
These three actions are key to understand what the final goal is and the best road to get there. If these three steps are not thoroughly carried out, it could cost the tendering authority precious time and money.
Defining Criteria and Scoring System
There are two scoring systems: the Lowest Price Method – best for smaller tenders and the Most Economically Advantageous Tender (MEAT) method. – best used for complicated or large tenders. The lowest price method is used for straight forward contracts. The Authority may reject the lowest bid if it deems it “too low”. The criteria and weighting system are defined in the tender. The Authority needs to inform the interested party of any weighting of the criteria. The MEAT scoring system uses four characteristics to set the correct grading criteria:
- They pertain to the tender subject matter.
- They are transparent and explicitly mentioned in the tender documents.
- They comply with the fundamentals of EU law;
- They do not give the contracting authority unrestricted freedom.
Method and timing should be clearly outlined in the tender; they should be set at a reasonable time in terms of the overall tender timetable and could be done via email or via conference call. Ensure that the clarification questions and responses are noted in writing and copied to all suppliers. The Authority should be be mindful to protect the intellectual property rights of the vendors and ensure that best efforts are maintained when it comes to protecting confidential information.
Awarding the Contract
The awarding of the contract should be handled with extreme care. Start by indicating whom the “awarded supplier” is and notify the other suppliers that they have been unsuccessful.
The Authority should communicate the reasons why the other suppliers were unsuccessful, ideally including a comparison with all scores.
The contracting authority should also allow for a "standstill period" to give the unsuccessful suppliers time to consider the reasons why they were not selected. Such a cooling-off period will also give the unsuccessful supplier the opportunity to appeal the decision of the contracting authority.