5 top tips for a tip top procurement

A well planned, well structured and well managed procurement can deliver high service performance, value for money and retain flexibility for services to evolve over time. SLR's Grant Pearson - Waste and Resource Strategy Consultant - shares his five top tips for seamless procurement in the article below.

Procurement of environmental services contracts is a significant and time-consuming exercise which, for some local authorities, can represent the largest procurement that they are required to undertake. Prior planning and realistic aims from the outset go a long way to making the process less intimidating than it may first appear.

Whilst all local authorities have unique circumstances and considerations applicable to their procurements, there are common foundations to any successful procurement. In no particular order, the following five tips are a good place to start.

Understand Your Own Expectations

To mitigate risks of potentially costly delays, lack of competitive bidding or a failed procurement, robust consideration and agreement of preferred outcomes should be undertaken in advance of starting the procurement. Ideally, this process should include engaging with the market to better understand key factors which are likely to attract or deter potential bidders.

Prior to publishing a Contract Notice, the procuring Authority should have a clear position on it’s preferred (ideal) solution and also what will be acceptable in terms of:

• service standards and outcomes;
• risk sharing; and
• service costs.
• sufficient time for bidders to consider and prepare high quality, accurately priced submissions; and
• evaluation processes which are robust, clearly documented, fully aligned with the stated evaluation criteria / methodology and therefore fully defensible.
• the current market, in terms of contemporary service delivery methods and other ongoing procurement activity;
• likely bidder positions and expectations, particularly in terms of realistic and agreeable risk sharing profiles; and
• robust and proven approaches to drafting of procurement documentation based on recent experience of similar procurements.

The overall position needs to take a realistic and balanced view of each key factor to present a procurement which is ‘on market’ and therefore more likely to attract and sustain interest from potential service providers. Try to avoid including multiple potential service options, which can be onerous in terms of workload and also creates an impression of uncertainty on the authority’s behalf which may deter bidders.

Select the Right Process

For most procurements, and particularly those which involve combined services (e.g. waste / recycling collection and street cleansing), selecting a process which provides for periods of discussion / engagement with bidders during the procurement can be highly beneficial in achieving the best outcomes.

Positions can evolve on both sides during the procurement process and, by adopting the Competitive Procedure with Negotiation or Competitive Dialogue, procuring authorities and bidders have the opportunity to openly discuss matters and issues arising, to ensure that service requirements and risk positions are appropriately set prior to final tender submissions so that a contract can be awarded which is affordable and provides best value to the procuring authority.

Ensure Documents are Fit For Purpose

All environmental services procurements are underpinned by a suite of documents which will typically comprise a main contract document, service specification (often referred to as ‘Authority’s Requirements), pricing schedule, performance management framework and payment mechanism plus additional supporting information.

It is essential that the documents are structured and drafted to be clear, concise and consistent so that potential service providers fully understand what is required of them and can price their bids accordingly, with uncertainty being reduced to a practicable minimum – perceived uncertainty and risk will inevitably result in reduced market interest and/or increased tender prices.

Each document should be carefully reviewed, sense checked and tested prior to issuance both in terms of specific content and also linkages and cross referencing between documents. A well drafted and consistently applied set of Defined Terms is essential in this regard.

It is also essential to ensure that the scoring mechanism and evaluation criteria which will be applied to bid evaluation are clearly drafted, reasonable and unambiguous so that bidders understand exactly what they are required to present, and the basis on which their submissions will be assessed. Clarity and correct application of the process is also essential to mitigate potential risks of procurement challenge.

A high-quality suite of procurement documents will help to instil bidder confidence in the procurement, increase the likelihood of attracting competitive bids and mitigate potential contract management issues during the service delivery period.

Apply Reasonable Timescales

Potential service providers can be highly selective when choosing which tender opportunities to pursue. Procuring authorities should aim to make their contracts as attractive as possible to the market to maximise the likelihood of participation and receipt of competitive bids.

The procurement timetable should be carefully thought out to provide a realistic, balanced programme which allows both:

Market engagement and initial consideration of the procurement process should be undertaken well in advance of current contract expiry (typically at least 18-24 months should be allowed depending on the complexity of the contract and matters such as reasonable mobilisation periods).

Consideration should also be given to other active local authority procurements and their respective delivery programmes, avoiding overlaps where practicable, so that potential service providers are not put off by conflicting demands on their bidding resources.

Consider the Benefits of Collaboration

Achieving all of the above can be a daunting prospect. Appointing suitably experienced specialist technical, legal (and potentially financial, particularly if the procurement includes infrastructure) advisors can provide value far greater than simply additional resource to support the authority’s procurement team.

External advisors can add value through up to date knowledge of:

The input and guidance of independent advisors with proven procurement expertise can be invaluable in structuring and developing a procurement which is attractive to the market (ensuring a competitive tendering process) and delivers value for money outcomes to the procuring authority.