At the recent BravoSolution customer conference, BravoConnect , Professor Dermot Cahill and Gary Clifford from the Institute for Procurement and Competition Studies (IPCS), based at Bangor University in Wales, led an excellent break-out session. For two university folk, it was a resolutely un-academic presentation and topic too, and we mean that as a big compliment!
“How to Shrink Your Tenders and Get Your Life Back!” was the provoking title, and it featured their work with two large local authorities in Wales. The project focused on reducing the size and complexity of sub-OJEU level tenders in terms of documentation and complexity of process.
Many of us will have had personal experience either from the buy side or the sell side of tenders that seemed out of all proportion to their size or risk. Indeed, last week, I was told of a tender for a £200,000 UK central government contract that runs to over 400 pages. But even much smaller value examples can suffer from the kitchen sink syndrome; that is, the temptation to throw everything (including the metaphorical kitchen sink) into the documentation and sometimes the evaluation process too.
So what did the IPCS do to address this? They started by persuading the procurement teams in the authorities to “scrap the procurement manual and start again”! Then, starting from a clean sheet of paper, and informed by the corporate policies and objectives as a foundation, they worked out what was essential to include in the tender; what was a “nice to have” and what was not needed. The team discovered that around 75% of the average tender was nice to have or not needed.
The principle of proportionality was key – so for instance, don’t analyse or focus on risks that really don’t exist for the specific contract. (In one case, insurance for the bidder was going to cost more than the entire value of the contract!) And for both parties, the effort should be proportionate to the size and risk of the contract.
IPCS worked on 20 pilot tenders across the two councils. They introduced a standard and simplified format for the documentation, with a concise “executive summary” for instance. The operational principles were:
1. Minimal/No Selection Stage
2. Improved Documentation (including Executive Summary)
3. Reduced set of questions and limit the number and size of each response.
4. Self Declarations (Insurance, H&S, Policies, etc…) only from winner.
5. Tighter Timescales (supported by eProcurement)
So, what have been the results and the benefits of the programme to date? The tender documentation has gone from 100 pages to 16 on average. Timescales for the tendering process have reduced on average from 120 days to 37. There has been increased competition, better tender submissions and greater transparency. Cahill and Clifford summarised the benefits and outcomes like this. In terms of the bidders, particularly smaller firms:
1. More Contract Opportunities advertised at lower values (i.e. more opportunities to win and deliver)
2. Start-Up / new companies felt confident to bid (because of the balance between time and effort)
3. Decision-making process improved (i.e. improved documentation…)
4. Reduced time spent on bidding process (i.e. Self Declaration, Word Limits, etc …)
5. Greater degree of bidding efficiency (i.e. easier to choose accurately where to bid)
Meanwhile, for the contracting authorities, the key benefits were:
1. Improved end-to-end process timescales (i.e. 37 days)
2. Increased market competition (i.e. more focused bidders)
3. Use of eProcurement (i.e. reduce timescales, consistency of information, etc…)
4. Significantly lower tender preparation and evaluation costs
5. Savings in human resources for assessment and evaluation (e.g. through self declaration)
And finally, as per the title of the presentation, the procurement teams were able to “get their lives back.” With less time spent on the administrative aspects of tendering, procurement professionals could focus more on the strategic elements of their role.
This was a good presentation of a very worthwhile programme, and one that could easily be replicated by any contracting authority in Europe that feels the size of tender documentation or the process around procurement has got out of proportion. Many organisations we’re sure would benefit from taking a look at these issues in the way IPCS reported their work here.