Irish contracting authorities have published 185 tenders using the Dynamic Purchasing System to procure a wide range of supplies services and works. Want to know more about the DPS? This short presentation/tutorial should be of interest to both buyers and suppliers. https://bidservices.ie/tender-and-procurement-training-modules/
Here are some public interest issues that have got scant attention in recent weeks.
- In compliance with Cabinet procedures, the Government’s decision to tender for the construction and fit-out of the proposed NMH must be based on a detailed business case prepared under the Public Spending Code.
- The business case will have assessed construction and other risks. It is assumed it will be informed by the many (avoidable) mistakes made in the procurement of the National Children’s Hospital. The business case will set an affordability cap based on a financial and economic appraisal having regard to a detailed design brief and technical specifications for the NMH benchmarked against comparable projects.
- The Public Spending Code and the Construction Works Management Framework also require the setting up of a Project Board with express responsibility for project governance and oversight. In the interest of transparency, the name of the chairperson and members of the Board should be announced when the tender is published.
- A Project Execution Plan is also an output of the business case.
- Given that at least €1 billion in taxpayers’ money is at stake, it will be interesting to see who will actually tender the project. Will the Minister for Health, the HSE, or the St Vincent’s Healthcare Group be the contracting authority and therefore accountable to the PAC?
- The Government has to decide which tendering process will be used to deliver value for money. The NCH was procured using the restricted procedure, which was a disaster with hindsight. To get value for money consistent with the project’s minimum requirements (and detailed design specifications) the Government must use what is called the Competitive Procedure with Negotiation as this will allow the contracting authority’s and contractor’s objectives (and costs) to be almost fully aligned before a Best and Final Offer tender is submitted.
- If a tender seeking to pre-qualify contractors under the Competitive Procedure with negotiation is published in the coming weeks, and provided the contracting authority is fully resourced, a contract with a successful bidder could be concluded within six to nine months.
- At project commencement, and well before a preferred primary contractor is appointed, an external (independent) assurance process has to be completed in line with DPER guidance. This new arrangement is designed to allow for robust scrutiny of the projects costs.
- Finally, again in the interest of transparency, the business case and the external assurance review reports (perhaps suitably redacted) should be published. The Minister for Finance has spoken several times about the benefit in making these documents available.
OGP has just published a tender to a value of €200m over four years for a wide range of services, including business strategy, ICT consultancy, economics, social research, research policy advice, environmental consultancy, design services, PR and marketing consultancy, financial management consultancy, project and programme management, organisational change, HR and business process management. The framework that will be used by practically every public body (excluding utilities) applies to contracts valued over €50,000. Details on eTenders. The deadline for response is 21 March. With between 20 to 30 suppliers to be appointed under the 13 lots, this is a Late Late Show tender: one for everyone in the audience!
Getting Value for Money Through the Smarter Procurement of Works Contracts
The following actions would improve VfM and contract performance in relation to works contracts.
- Under the Public Spending Code, it should be made compulsory that all works projects with a capex in excess of €25m should be procured using the competitive procedure with negotiation. This proposal would result in contracting authorities getting a Best and Final Offer based on a more precise and negotiated understanding of the project brief and costs. The current practice of using the restrictive procedure for large scale projects inevitably results in significant cost overruns: the Children’s Hospital is a case to point.
- Linked to this proposition, it is also recommended that OGP instruct all contracting authorities to appoint a Procurement Process Auditor for all works projects with a value in excess of €50m. The appointment should be made once the preliminary business case has been accepted. The OGP should procure Procurement Process Auditors by way of a framework. In addition, the June 2004 (Department of Finance) guidance on the role and function of a process auditor could be update.
- The procurement of construction professionals should be carried by contracting authorities using a Dynamic Purchasing System (using lots by profession category/region). This would greatly simplify the appointment of such professionals and would replace the current requirement of procuring individual advisors via the cumbersome CWMF. DPS procurement is emerging as the default procurement option of choice in the UK and is used extensively in the procurement of construction professionals.
- Linked to this proposition, all contracting authorities with a requirement to appoint small building contractors should be required to procure works using a DPS. A new simplified template Tender Response Document and small works contract (drawing on the RIAI model form) should be introduced for all works contracts valued at under the EUthreshold.
- Maintenance contracts below a value of €20m over the term of the contract should be procured using the OGP’s template services RFT/contract and/or framework for facilities management. As services dominate the contact the CWMF should not be used.
- A new easy to use template RFT, TRD and works contract should be introduced for all works contracts valued under €50,000.
- Guidelines (mandatory) should be issued in relation to the use of sustainable (green) public procurement selection and award criteria for works contracts over the EU threshold. The current (draft) version of EPA guidance on GPP (January 2021) excludes works and construction products and services. Using GPP for lower valued contracts might be attempted at a later stage in the light of experience with higher valued projects.
- Elements of the UK’s Construction Playbook (PPN 09/20) should be incorporated into revised CWMF guidelines.
- Contractors should be asked to completed a Tender Response Document (TRD) for all works procurements other than high risk, high value contracts where a bespoke approach is needed. A TRD should replace the Suitability Assessment Questionnaire.
- The CWMF should be made compliant with the 2014 Public Contracts Directive. At a minimum, the following changes should be made:
- The ESPD should be a requirements for all procurements in excess of the EU threshold. There is no further need for the Declaration of Personal Circumstances of the Tenderer.
- Only electronic submissions should be sought.
- Where used, the Suitability Assessment Questionnaire/TRD should require one signature only. The current SAQ (for use in a restricted procedure) requires eight declarations to be signed and completed).
- Unless justified on the basis of risk, evidentiary documents should only be sought from the preferred tenderer only.
- The OGP should procure a provider(s) to deliver the current suite of public sector training materials on works procurement to contractors and construction professionals. Investing in public sector works procurement training only – as is the case currently – will not facilitate the effective implementation of a reformed CWMF.
3rd February 2021
Copyright Bid Services Ltd. The material in this post is purely for information and discussion and does not purport to advise on matters of law.
Brexit and Public Procurement: First Impressions from an Irish Supplier Perspective
While the media was obsessively distracted by the last-minute Punch & Judy fish negotiations, little or no attention was paid to public procurement arrangements post-Brexit. This is a far bigger sector of economic activity than fish, estimated to account for approx. £290 billion in the UK and some €2 trillion in the EU. The following is a brief summary of what is known at this point.
The new arrangements post the EU-UK Trade and Cooperation Agreement will be largely determined by the EU’s and UK’s commitments under the WTO’s Government Procurement Agreement (GPA) and this is formally set out at Title VI to the EU-UK Trade and Cooperation Agreement at pages 148-153.
However, there is much more detail as to the UK Government’s intentions in its Green Paper Transforming Public Procurement which outlines its broad policy approach for higher value or “over-threshold” contracts and its new guidance notes (PPN 11/20) on lower -value or “sub-threshold” public contracts. These documents were quietly published the UK’s Cabinet Office website on 15th December with zero fanfare and to complete media indifference.
The following is a brief attempt at some preliminary analysis with particular reference to the Irish perspective.
- Public contracts above WTO/GPA value thresholds (i) works/construction contracts (>£4.7 million); and (ii) goods/services contracts above £123,000 (central government bodies) or £189,000 (sub-central government bodies).
The green paper, which is open for comments until 10 March 2021, sets out how the British Government intends to operate public procurement in accordance with its WTO (Government Procurement Agreement) and bilateral commitments from 1 January 2021. The focus of the green paper is on public contracts that exceed WTO/GPA value thresholds set out above.
While the green paper indicates some proposed significant procedural divergence from the current EU public procurement regime, it would appear that, fundamentally, public contracts covered by the UK’s WTO/GPA commitments will continue to be procured on the basis of advertised competition open to commercial entities in WTO/GPA countries and other countries with which the UK has bilateral arrangements on public procurement. This approach will be welcomed by Irish suppliers to the UK/Northern Ireland public sector market. The Ministerial Foreword accompanying the green paper sensibly acknowledges that public procurement is a two-way street and that proceeding in this manner “guarantees access for UK suppliers to £1.3 trillion in public procurement opportunities in more than 48 countries”. The Foreword also goes on to reassure the market in stating that: “We will respect our commitments to not discriminate against parties in this and other bilateral international trade agreements on public procurement.”
The green paper indicates that there will be changes to simplify and streamline the remedies available to aggrieved tenderers wishing to challenge contract award decisions but acknowledges the key WTO principle that such remedies must be “effective”. It remains to be seen, therefore, how the new remedies regime will operate in practice and how “effective” it will be.
For the moment, therefore, it would seem that the basic market-access rules will remain substantially unchanged for over-threshold public procurement in the UK/NI market. Pending some proposed changes flagged in the green paper, Contracts Finder will be retained to ensure that suppliers can search for contract opportunities online. Scotland, Wales and Northern Ireland will continue to have their own dedicated public sector procurement websites. However, UK/NI public contract notices will no longer be published on the EU portal, Tenders Electronic Daily .
Of course, much will depend on the detail of the UK legislative changes in due course as well as the detail of how the trade and cooperation agreement with the EU is implemented in practice. There remains much uncertainty with regard to matters such as equivalence of standards and professional qualifications, data protection, rules of origin, VAT, temporary cross-border access for consultants in performing contracts and so on.
Irish suppliers with an interest in the UK/NI public sector market should continue to monitor the OGP Guidance on Brexit which will continue to be updated in the light of further developments in the coming weeks/months.
- “Sub-Threshold” Public Procurement – i.e. works/construction contracts valued at less than £4.7 million and goods/services contracts valued at under £123,000 (central government bodies) or £189,000 (sub-central bodies).
This is the orphan child of public procurement, often overlooked and seen as of little consequence by government and EU policy makers over the years. However, for many Irish, Northern Irish and UK SMEs, this market is key to their development and growth and sometimes their very survival. While the individual contract values may be relatively low, it must be borne in mind that cumulatively the value of this business represents possibly as much as 20% of the UK government’s annual spend of £290 billion on public procurement.
This sub-threshold sector is a vital first step on the business ladder for many small enterprises and start-ups as it enables them to establish their credentials in the successful performance of public contracts. This is a critical requirement in helping them to move up to the bigger value contracts in the “over-threshold” arena. There are many enterprises throughout Ireland , NI and the UK who have travelled this path to greater success benefitting from the open access to such contracts across our jurisdictions that has prevailed up to now.
To date the EU Commission has had little to say on this market sector other than in its “Questions and Answers” issued on 24 Dec on the EU-UK TCA which includes the following:
“The Agreement further provides for non-discrimination of EU companies established in the UK (and vice versa) for small-value procurement, i.e. below the threshold of the GPA (from EUR 139,000 to EUR 438,000, depending on the contracting entity, and EUR 5,350,000 for construction services).
The foregoing seems to imply that contracting authorities in the UK/NI and the EU may “reserve” or limit sub-threshold contracts to entities “established” within their jurisdictions and thereby exclude all other would-be cross-border operators from tendering for such contracts.
The prohibitive cost of cross-border “establishment” could effectively exclude many SMEs from competing across borders for sub-threshold contracts and this is hardly a good outcome for SMEs on either side, but especially so on the island of Ireland.
The UK Government’s plans for this sector were signalled in the Ministerial Foreword to the Green Paper as follows:
“We have already introduced a policy which will allow below threshold contracts to be reserved for UK suppliers which will come into effect at the end of the Transition Period.”
On the face of it, this is bad news for the many SMEs across Ireland who might want to compete for business in the Northern Ireland or wider UK public sector market because it raises the stark possibility that they may be excluded from this market from 1 January this year.
The detail is set out in the UK Cabinet Office Policy Note PPN 11/20 of 20 December 2020 and accompanying guidance notes on reserving public contracts.
The detail of the policy includes a number of important qualifications:
(i) reserving such contracts is discretionary and contracting authorities may continue to allow tenders from EU Member-States (including Ireland) if they consider that doing so will deliver better value for money;
(ii) The reservation policy should not be applied to below threshold procurements which are of cross-border interest (i.e. which may be of potential interest to suppliers from EU Member States including Ireland) AND which involve the provision of goods into Northern Ireland;
(In the context of the island of Ireland, given its geographical proximity and the two-way openness of this market up to now, it is arguable that all such contracts are inherently of “cross-border” interest to ROI suppliers particularly in the border counties.)
(iii) a justification for the decision to reserve/not reserve must be recorded in all cases; and
(iv) in the case of reserved contracts, contracting authorities must satisfy themselves that the tenderers have a substantive business presence or “in the UK and are not simply “brass plate” operations registered in the UK to circumvent the reservation policy.
Given these qualifications, it is clear that the impact on Irish suppliers will very much depend on how the policy is applied in practice. It may be that many contracting authorities in the UK/NI will continue to seek best value for money by generating maximum market response via open competition without availing of the option to reserve. On the other hand, if the policy is applied on a protectionist basis to exclude EU/Irish suppliers as far as possible then that is likely to have political repercussions on the EU/Irish side with inevitable pressure from market operators to apply a reciprocal exclusionary policy vis a vis UK/NI suppliers. (A classic lose-lose outcome of protectionism.)
The UK government is of course within its rights to adopt this course under its WTO commitments, but it seems to have done so with little or no real consideration as to whether this will actually benefit UK/NI taxpayers and UK/NI enterprises in the long term.
You would expect such a major policy change to have been subject to considerable study, analysis, and consultation but there is nothing in the Policy Note to suggest that any assessment of the costs, benefits and risks was undertaken.
The new approach will be seen by many as contrary to the spirit of the Good Friday Agreement as well as having the potential to undermine much of the solid progress achieved by both governments in the promotion of open cross-border and East-West trade over many years since the GFA. This open policy was strongly supported by InterTrade Ireland, one of the cross-border bodies established under the Good Friday Agreement which did great work in educating small suppliers, North and South, on how to go about tendering for public contracts. Those efforts resulted in significant market penetration in both north-South and East-West directions to the mutual benefit of taxpayers and enterprises in both jurisdictions. Taxpayers benefit from greater competition and better value for money. Enterprises benefit from a much bigger market with more opportunities but also from greater competition (which is vital to the long-term health and success of all business.)
Apart from the economic benefits, there was undoubtedly an important “peace dividend” to this activity which helped greatly in terms of improved contacts and understanding between individuals, public bodies, and the business communities both in the North-South and East-West contexts.
Sadly, none of these positives appear to have been considered in adopting the new policy approach and are not even mentioned in the UK Government’s Policy Note and Guidance materials.
I personally hope that the Irish government/EU does not retaliate in kind, but it will be hard to resist the complaints from Irish business who will understandably be very angry if Northern Ireland and UK-based entities have free access to this business in Ireland while Irish operators are being excluded from this sector in the UK and Northern Ireland.
James Farrell Procurement Research Ltd 6 January 2021
 conservative estimate based on typical spend pattern of public bodies on over and under-threshold contracts.
Copyright Bid Services Ltd. The material in this post is purely for information and discussion and does not purport to advise on matters of law.
Really pleased we have been approved by Enterprise Ireland as a professional service provider under their Green Start Programme. What this means in practice is that we can support EI clients that need strategic advices and practical assistance in bidding for public and private tenders – in Ireland and abroad – where sustainable procurement criteria are driving the buyer’s decision to purchase.
- The systematic introduction of GPP selection and award criteria into Irish public tenders (over the EU threshold values) will potentially have a higher impact on reducing national GHG emissions and energy consumption than many other actions identified in the National Energy and Climate Action Plan.
- The draft guidance is described as a ‘Starter Kit’. Would it not be much better if comprehensive guidance based on the EU’s GPP Toolkit was published now?
- Quite correctly, the draft guidance hints (but does not require) that the introduction of GPP by a public body should be based on an initial needs assessment (which is a critical element of the EU GPP Toolkit).
- Only ten product categories have been selected. Why are construction-related procurements such as roads, transport and water and waste water projects and construction products – that are included in the EU GPP guidelines – out of scope of the Irish guidance?
- The current suite of OGP template tenders and contract documents will need to be changed to give effect to the EPA guidance once it is adopted. Why are no such amendments included in the draft guidance?
- In compliance with Government guidelines, given the value of public contracts affected and compliance costs, should a full Regulatory Impact Assessment of the draft guidance be undertaken? A RIA could assess whether it makes economic and environmental sense to apply the GPP guidelines to procurements below the EU value threshold as is currently suggested. This requirement is arguably disproportionate. A RIA requires structured stakeholder consultation. To date, to my knowledge there has been no engagement with Irish tenderers. This is a big mistake. The engagement of Irish suppliers is critical to the successful and phased introduction of GPP. Bear in mind that many are at a competitive disadvantage compared to their EU counterparts who are well-accustomed to responding to GPP selection and award criteria for over a decade.
- The draft guidance has been framed against the background that GPP criteria have been designed to avoid any significant impact on cost or product availability. This is potentially a cop out and could be used, for instance, by some contracting authorities as a justification for ‘doing nothing.’ In fact, Life Cycle Cost calculations, GHG emissions reductions, energy efficiency metrics and the shadow price of carbon should be, where appropriate, a compulsory element of all business cases carried out before a decision is taken to tender based inter alia on GPP criteria. The Public Spending Code could be amended to take account of the proposed mandatory use of GPP.
- Where is the budget to give effect to the proposed action plan to integrate GPP into procurement practices in Ireland? Why are public bodies only receiving Exchequer support for GPP training and awareness raising? Why is there no counterpart funding for Irish tenderers? In addition, will Exchequer support be provided to encourage Irish tenderers to secure high environmental standards such as ISO14024? If Irish public bodies start insisting on Irish tenderers having mandatory environmental standards as a compliance pre-requisite, more public sector business will go offshore.
- As a significant amount of energy efficient and sustainable products are imported from the UK, the absence of any mention of Brexit is a gap in the draft guidance.
- Before detailed sector specific rules are finally agreed, should an assessment of the dynamics of the supply chain in Ireland for the sustainable products to be procured be completed.
- Could SEAI’s TripleE and energy efficiency standards (IS 399) be explicitly referenced as compulsory selection criteria, where appropriate?
- A bespoke set of GPP rules could be introduced for significant public sector works projects, such as the €9 billion deep retrofit programme.
- At present, compliance with GPP guidance is voluntary. Should primary legislation be introduced to make GPP mandatory for tenders above the EU threshold? Could amendments be added to The Climate Action and Low Carbon Development (Amendment) Bill 2020?
- Who is charge? Should the EPA, OGP, DPER, DECC and/or individual contracting responsibilities be responsible for monitoring compliance with the new GPP guidance? Which organisation will host a GPP Helpdesk?
- In terms of GPP governance, should a Project Delivery Steering Group, including private sector contractors/tenderers, be set up?
Copyright Bid Services Ltd. The material in this post is purely for information and discussion and does not purport to advise on matters of law.
What will happen at the event? The workshop will be facilitated by procurement expert Peter Brennan’s Bid Services Tender Training Excellence Programme. The workshop is aimed at sole traders, small businesses and SMEs who wish to secure a share of the €90 billion in public works, supplies and services that will be procured by the Irish Government over the next five years.
Date: Thu 12 Nov 2020Time: 09:00 AM – 01:00 PMVenue: Webinar, Dublin Chamber, NA NA
Bid Services’ Tender Training Excellence Programme is based on the much-acclaimed book ‘Public Procurement Rules of the Road‘, written by Peter Brennan. The workshop will also allow participants who have general issues about tendering to discuss these with Peter.
The workshop will cover key elements of such as:
- The latest information about tender opportunities
- Responding to framework agreement mini-competitions
- The new features of the 2014 Procurement Directives
- Completing the European Single Procurement Document and Tender Response Documents
- Contract management
- Reducing the cost of bidding
- The Dynamic Purchasing System
- Top 10 tender tips
This event is brought to you by Enterprise Europe Network office at Dublin Chamber.
The cost to take part in this programme is €110 for Dublin Chamber members and €190 for non-members.
Event name: Webinar Bid Services Tender Training – November Event date: Thu 12 Nov 2020Event time: 09:00 AM – 01:00 PMVenue: Webinar, Dublin Chamber, NA NA
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With a client base of over 1,000 companies ranging from SMEs to plcs, we offer a comprehensive range of advisory and documentation support services. In addition, we deliver training courses in the science and art of tendering which provide clients with the skills and techniques to cleverly market their organisations’ expertise throughout the tendering process.
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There is a potential gap in the scope of the Climate Action and Low Carbon Development (Amendment) Bill 2020: green public procurement. Making GPP mandatory is a Programme of Government commitment. So why not do this in the Climate Action Bill in respect of all tenders valued over the prevailing EU threshold? GPP is the most sustainable, quickest, cost effective and most efficient way to drive down GHG emissions and to improve energy efficiency
Let’s look at the budget from a procurement point of view. Next year the Public Capital Programme will be at a record level at over €10 billion; the commercial semi-state sector will procure at least €8 billion; and Ireland’s 3,000+ contracting authorities will tender for some €15 billion+ in supplies and services. Ireland’s procurement market has grown to €33 billion. Wow. Busy times ahead for buyers and suppliers.
Peter Brennan / email: email@example.com