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24 August 2015 | Comment | Article by Iwan Jenkins

Procurement checklist: 8 key things to consider before starting

The preparation before commencing a procurement process is the most important phase and is often overlooked by organisations procuring works, services or supplies. This preparatory stage is important as it allows the greatest flexibility to shape the requirements of the procurement exercise in accordance with the relevant procurement law.

It is beneficial – and good practice – for organisations to consider a number of aspects before commencing its procurement as it is much more difficult and riskier to shape and define a procurement exercise once it has commenced. This fact is even more important following the recent introduction of the Public Contract Regulations 2015 (“the Regulations”). Regulation 53 makes it clear that procurement documents have to be available with the OJEU notice and this makes it even more important that the necessary preparatory work is undertaken.

Below is a checklist of issues that should be considered:

  1. The value of contract to be awarded
    It is important to estimate the value of the contract to be awarded as the total contract value determines whether the Regulations apply at all. The EU directives are triggered by the EU threshold. These are revised every 2 years with the next revision due 1 January 2016. Care needs to be taken with the aggregation laws and there is a new threshold for the light touch regime for services.
  2. If the Regulations do apply, work out the relevant part of the Regulations
    The Regulations apply for most contracts, works, supplies and most services. However, there is now a light touch regime for a narrow grouping of social health and other services specified in schedule 3 of the Regulations. Part 4 of the Regulations apply to below threshold contracts.
  3. Determine whether the contract is advertised in lots
    Contracting authorities often divide a larger contract into smaller lots to permit new market entrance for less financially secure, less experienced contractors to bid and also to drive the SME Agenda. In the Regulations, if a contracting authority decides not to use lots then it must record its decision in the procurement documents and/or its report under Regulation 84 and note why lotting was deemed not applicable.
  4. Determine the appropriate tendering procedure
    The appropriate tendering procedure should be considered and selected. The following are the current procedures: open procedure, restricted procedure, competitive dialogue with negotiations, competitive dialogue, the innovation partnerships, negotiated procedure and the light touch regime.
  5. Prepare a programme
    The Regulations provide for reduced mandatory time limits, e.g. the period to select and period to evaluate tender. However, organisations should still map out what they believe to be a reasonable time for bidders to prepare their responses and, more importantly, the time required to evaluate bids and also seek internal sign off. A detailed programme should be prepared before any procurement exercise is commenced.
  6. Prepare the specification
    It is important that the technical specification is prepared and largely completed in advance so that the bidders can be issued with the procurement documents. It should also be considered whether variant bids are allowed or not and how the variant will be evaluated as part of the tender evaluation.
  7. Prepare procurement documents
    It is important that procurement documents are available electronically when the OJEU notice is published. Regulation 53 makes it clear that procurement documents have to be available with the OJEU notice and there is a wide definition of procurement documents in the Regulation which includes the ITT, technical specifications and the proposed contract conditions.
  8. Determine an evaluation strategy
    This is often an area that can take up a huge amount of time and resource, especially in relation to technical and financial aspects. The tender evaluation criteria must be used to determine the most economically advantageous tender. These must be stated and cannot include discretionary or arbitrary factors. The evaluation criteria should not be changed and must be prior-published in the notice and procurement documents. It should be clear to a reasonably, well informed and, normally, diligent tenderer. Any scoring systems linked to the tender evaluation process must be prior-published.

There is plenty of guidance on the use of the qualification questionnaires including the Supplier Qualification Information Database (SQuID) in Wales. Therefore, your evaluation strategy should be considered well in advance of the commencement of any procurement exercise.

Author bio

Iwan advises on non-contentious construction matters and has prepared and negotiated documentation on a wide variety of projects. He has advised on building contracts, appointments, development agreements, construction security documentation and all associated documentation.

Iwan has advised public sector clients in social housing, education, local and national government as well as contractors, consultants, sub-contractors, developers and funders in the private sector.

Iwan has a particular interest and expertise in framework agreements and collaborative construction contracts.

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