How this guidance note can help

This guidance has been developed by CollaborationNI to help Voluntary, Community and Social Economy (VCSE) organisations to maximise their chances of winning tenders by working together in collaboration.

This guidance can help you to understand:

• the meaning of ‘commissioning’ and ‘procurement’ and how they work
• how collaborating to tender can be beneficial
• some of the potential pitfalls of collaborating with others to tender
• the particular aspects of tendering to consider when tendering on a collaborative basis
• how to set up and get ready for a collaborative arrangement to win tenders

Commissioning and procurement

Public bodies achieve their objectives through a variety of routes, either by carrying out activities directly or by dealing with outside parties. In broad terms this process can be described as ‘commissioning’. The term covers the entire cycle of assessing the needs of people in a local area, designing services and then securing them.

Procurement covers the specific activities of buying services, from the initial advertising through to the final contract managements.  It refers to the procedures that public bodies must follow when they purchase services. The formal EU procurement process is just one of the routes open to public bodies when they are deciding what services to commission. 

Understanding commissioning

‘Commissioning’ covers the cycle of:

• assessing the needs of local people or service users
• designing services
• securing services
• monitoring and reviewing services

There are a number of ways of commissioning services including:

• the commissioner delivering the activity itself, by employing people and providing the necessary resources
• giving a grant or subsidy to an organisation to carry out the activity
• giving an organisation the right to provide the service (a concession or licence)
• providing capital funding to the organisation, which is then able to carry out the activity on a self-financing basis
• setting up a joint venture
• giving financial support to service users to meet fees charged by the service provider organisation or so that they can purchase their own service
• providing in-kind support (such as seconding staff or providing services, equipment or assets) to the organisation delivering the activity
• undergoing a ‘procurement’ which covers everything from advertising through to final contract arrangements

Understanding commissioning is important both for public bodies and VCSE organisations that work with them because:

• VCSE organisations need to understand the constraints of the powers and policy framework within which commissioners must work.
• VCSE organisations can take steps to influence what and how services are commissioned by developing good relationships early in the process.

Choosing what to commission

A commissioning process begins with a public body deciding what it wants to commission, then considering how.  A good starting point is to clarify the public body’s high level objectives, i.e. what has it been set up to do and what legal powers does it have to help it to achieve those objectives? With this in mind, before any procurement process is initiated, VCSE organisations can and should get involved with the public bodies they would like to be working with as soon as possible; there can be a lot of room for discussion with commissioners before they decide what they want to tender for.

Procurement

Procurement law is complex. Procurement of contracts for services by public bodies must follow EU procurement regulations (if they apply) and general EU treaty principles.

This guidance is not intended to be a guide to the EU Public Procurement Rules. The details of the EU Public Procurement Rules are, in any case, mainly of direct relevance and interest to the public body doing the actual commissioning, rather than to VCSE organisations as they tender collaboratively.

If you do require legal advice on a procurement matter, you should consult your solicitor.       

The EU Treaty principles

The fundamental principles of the EU Treaty do apply to all contracts that a public body enters into, regardless of whether the full EU procurement rules apply.  Designed to ensure fair competition for public contracts, these four fundamental principles are:

• Free movement and non-discrimination: a duty not to discriminate between individuals or businesses because of the EU member state from which they come, and not to inhibit the free movement of workers, goods and businesses within the EU.
• Equal Treatment/Fairness: a duty to ensure that commissioning and procurement processes are fair, and do not unintentionally exclude potential suppliers.
• Transparency: a duty to ensure that commissioning, procurement and contracting processes are transparent and open. This means that any bidder for a contract should be able to see and understand the process that the contracting authority is following, eg when a contracting authority invites tenders from interested bidders, it must make clear what it is evaluating, and how it will evaluate and score bidders’ responses.
• Proportionality: a duty not to include contract requirements and terms that are disproportionate to the size or value of the contract, eg a contracting authority should not require technical capability, professional status or economic strength that is far beyond that needed to deliver a contract, and must accept technical specifications and qualifications if they are equivalent to the national specifications and qualifications the public body has specified.

These principles underpin procurement law and much other European law, and contracting authorities should always consider them throughout their procurements.

Principles of public procurement in NI

There are 12 guiding principles that govern the administration of public procurement in Northern Ireland. These principles should underpin any procurement process, they are:

• Accountability: effective mechanisms must be in place in order to enable Departmental Accounting Officers and their equivalents in other public bodies to discharge their personal responsibility on issues of procurement risk and expenditure.
• Competitive Supply: procurement should be carried out by competition unless there are convincing reasons to the contrary.
• Consistency: suppliers should, all other things being equal, be able to expect the same general procurement policy across the public sector.
• Effectiveness: public bodies should meet the commercial, regulatory and socio-economic goals of government in a balanced manner appropriate to the procurement requirement.
• Efficiency: procurement processes should be carried out as cost effectively as possible.
• Fair-dealing: suppliers should be treated fairly and without unfair discrimination, including protection of commercial confidentiality where required; public bodies should not impose unnecessary burdens or constraints on suppliers or potential suppliers.
• Integration: in line with the statutory duties on equality of opportunity and sustainable development and the Executive’s policy on joined-up government, procurement policy should pay due regard to the Executive’s other economic, social and environmental policies, rather than cut across them.
• Integrity: there should be no corruption or collusion with suppliers or others.
• Informed decision-making: public bodies need to base decisions on accurate information and to monitor requirements to ensure that they are being met.
• Legality: public bodies must conform to European Community and other legal requirements.
• Responsiveness: public bodies should endeavour to meet the aspirations, expectations and needs of the community served by the procurement.
• Transparency: public bodies should ensure that there is openness and clarity on procurement policy and its delivery.

Collaborative tendering and its benefits

Definition: two or more organisations working together to win a tender that they would be less likely to win individually.

As more public services are being procured through a tendering process, in larger packages and across wider areas, it makes sense that VCSE organisations look at ways of working together, or with others, to increase their chances of success in the face of competition from private sector or larger community or charitable organisations.

There have been many examples of organisations successfully collaborating to win tenders, however if the process is not adequately planned it can be difficult and costly.

Benefits of collaborating to tender

There are many benefits of collaborating to win tenders, including:

• A better chance of winning with the resources of two or more organisations coming together.
• Fewer competitors involved in the tender as they are working together.
• A broader range of skills, experience and expertise is being brought to the bid.
• Where there is a minimum turnover criterion, this being met by adding individual organisations turnover together.
• The collaboration sharing costs, risk and ultimately the liability associated with tendering.
• Providing more confidence to awarding bodies through a strong collaboration.

What causes collaborations to fail?

There are a number of potential pitfalls associated with collaborative tendering.  These include:

• Mistrust and doubt between the partners as a result of not having built a good relationship in advance.
• Failing to share vital information in advance of the tender due date.
• Lack of strong commercial agreements or contracts which set out roles, responsibilities and rewards.
• Selecting the wrong partners in the first instance and not recognising it until it’s too late.
• Trying to form a collaboration and complete a tender at the same time; the process of forming collaborations should start well before the tender is issued.

Stages involved in collaborating to win tenders

The three stages are:

1. Develop the collaboration arrangement in terms of identifying partners and establishing ground rules governing the partnership.
2. Prepare a tender toolkit (standard materials required as part of the tender submission).
3. Complete a Preliminary Quality Questionnaire (PQQ) or Invitation To Tender (ITT) response.

Ideally these three stages should not be completed at the same time, but rather follow one another, in order, over a timescale that suits all partners in the collaboration.

Some key questions and issues to address

Ask yourself the following questions:

Where are the boundaries?

• Will the collaboration be for one tender or a number?
• How long will it last?
• Is this part of a strategy towards a full merger?

How will we make decisions?

• Will it be by consensus or majority vote, or will a mediator be appointed?

What if we can’t decide?

• Will the collaboration collapse or will we agree to an ultimate decision maker?

Who will lead the bid?

• In most tenders it will be necessary to nominate one organisation to lead the bid, how will this be determined?
• Are you prepared to let others lead?

What are we both bringing to the table?

• Is it clear what the strengths and weaknesses of all parties are?
• Do some of the parties think that their contribution is greater than it actually is?

What strengths do we perceive that we have?

• Are we clear about what we are bringing to the table?

Have we outlined our expectations?

• What do we want out of the collaboration in the short, medium, and long term?
• Is our board of directors aware of the rewards and the potential risks?

CollaborationNI has created a  simple guide to the questions each partner should ask themselves prior to deciding to collaborate entitled, Checklist of Questions for Partners Considering Collaboration.

Process of forming a collaboration

The process of forming a consortium, partnership or other form of collaboration should embrace the following:

Deciding on partners

An important part of your bid strategy will be deciding whether or not to partner with other organisations.  This might mean an arrangement such as:   

• action as the prime contractor (other partners will be your sub-contractors)
• becoming the lead organisation in a consortium
• joining a consortium led by others
• creating a new ‘Joint Venture’ company for the purpose of the contract or this type of work; in most cases this is not a necessary condition of the request for tender

Whatever the arrangement you should:

• create a shared vision and set of outcomes for the contract you are tendering for
• formulate a written agreement covering issues such as: intellectual property; licensing; funding the bid process; programme development costs; allocation of financial risk; dispute resolution; legal arrangements; exit strategy
• establish a management structure with clear roles and lines of authority for each partner and put it in writing
• define each partner’s share of the work, share of the cost/effort and share of the profit, in advance
• make sure that everyone working on the bid is made aware of agreements, not just the senior people who approve it or sign it off

All potential partners should be subject to a degree of due diligence and asked to declare any potential or immediate conflict of interest.  All parties to the tender bid should sign off the tender submission.  For complex arrangements, you should consider an independent bid chairperson.

Critical steps for collaboration

Consider the following steps when planning with partners for collaboration on a tender:

• Review risks, conflicts of interest and complete due diligence up front, this stage will identify all of the potential threats and will form the basis of an open discussion.
• Create a shared vision and set objectives for the contract; it is vital that all parties are working towards the same vision.
• Formulate a written agreement – a collaboration agreement - completed with professional legal advice; the more thought and effort that are put in at this stage the better chance of having a robust agreement. The benefits of well-written contracts and agreements are clear when things go wrong.
• Establish a leadership and management structure with roles and lines of authority and decision-making. This is likely to cause some degree of contention and it is at this stage that collaboration can fall apart, but it is unlikely that awarding bodies will consider a tender submission where there is no clear leadership and lines of authority.
• Define expectations, workload and timing; the completion of a project plan is necessary to ensure clarity, this is a vital step in the process.
• Agree inputs, resources, and processes as well as outputs and outcomes; each party should expect to contribute to the formation of the collaboration and the tender preparation and submission in line with their potential reward, and this should be written down and agreed at regular stages throughout the process.
• Ensure the whole team is aware of the content of the collaboration agreement and the surrounding arrangements. Regular reviews of documentation including agreements are critical and partners should get approval from their committees or boards before signing up to any agreements or contracts.
• Get all partners to sign off the bid; though critical, this element is often overlooked due to time pressures so build time for it into the overall plan as partners need to know what they are signing up for and what the implications will be for non-performance.

A leader’s checklist for collaboration

'Make Sure' Overview

• Make sure the collaboration is in the interests of your organisation, its stakeholders and beneficiaries.
• Make sure that in some way, directly or indirectly, the collaboration will further your objectives.
• Make sure that the collaboration agreement, in whatever form it takes, clarifies goals, roles, processes and responsibilities.
• Pay attention to communication and make sure that people at all levels know the why, what and how of the collaboration deal.
• Make sure that your organisation’s independence is not inadvertently compromised.

Factors to consider that influence collaboration

Each of the following factors influences the collaborative process:

• Leadership - the leader facilitates and supports team working, and encourages diversity and individual, group and organisational strengths.
• Vision and Values – the partners share clear vision and values with tangible goals that are meaningful and achievable.
• Connectedness – partners in this collaboration are connected and have established informal and formal communication networks at all levels. 
• Understanding Stakeholders - the collaboration understands the stakeholder dimension and gives consideration to its people, cultures, values and habits.
• History – There is a history of partners working cooperatively, solving problems and getting things done.
• Rationale - the collaboration was started because the existing problem(s) or the reason(s) for collaboration required a collective approach. 
• Research and Evaluation - the collaboration has conducted a needs assessment or has obtained information to establish its goals and the collaboration continues to collect data to measure goal achievement.
• Political Climate - the history and environment surrounding power and decision-making is positive. 
• Policies/Regulations - the collaboration has policies and/or regulations that allow the collaboration to function effectively. 
• Resources - the collaboration has access to the resources needed to be effective; resources refer to five types of capital: environmental, in-kind, financial, and human and social.
• Communication - the collaboration has open and clear communication; there is an established process for communication between meetings. 
• Sustainability - the collaboration has a plan for sustaining membership and resources; this involves guidelines relating to terms of office and replacement of members.

Legal implications

There are many legal options in relation to forming a collaborative grouping.  It is vital that you take specific legal advice and the board of directors/committee of each of the partners understands and accepts the implications of the legal agreements.  The options range from a light touch Memorandum of Understanding to a more binding contractual agreement with in-built non-performance penalties.  Some organisations opt to set up a separate company with directors appointed by each of the partners.  The decisions around the legal options will be determined by:

• The level of risk or liability involved in the tender; where there is greater risk more detailed legal agreements are necessary.
• The awarding authority requirements. Some awarding authorities will insist on dealing with a separate legal entity however a new company may not be able to meet the previous experience criterion of tender selection if it has no previous trading history, so in this instance one of the partners may need to take the lead.
• The requirements of the boards of the different partner organisations. Understanding the Constitutions or Memorandum and Articles of Association of each of the partners is important as there may be clauses which prevent them tendering in the first instance or even clauses which restrict them in forming collaborations. A review early on in the collaboration process is recommended to allow time to get governing documents amended if necessary.

Recommendation:
Get independent legal advice at this stage of the process

Moving towards tendering

Having agreed to collaborate and being confident that you have a winning team, the next stage is to start preparing for the tender.  This should commence well before the tender documents are issued.  Investment in time and other resources at this point will significantly improve your chances of success. 

Any public body undertaking a procurement process will be looking for suppliers who:

• have the ability to deliver the contract to the standards set out in the specification
• have the capacity in terms of their people, technical ability and financial resources
• have a process, including contingency plans, to deliver the work to a standard that meets their needs

It is important that when you are completing the tender proposal it is the sum of the individual parts that becomes your strength as a consortium. All materials should focus on the consortium strengths rather than the strengths of individual members.

Yes-No guide on deciding to bid

Making a decision to bid or not is a crucial one. Make the decision on a realistic assessment of your chances to win, based on your knowledge of the market and client. You will need to decide immediately on release of the request for tenders.

Yes indicators

• customer already aware of your organisation, the partners and their capability
• understanding of procurement history and confident that there is a fair chance of success
• can deliver value for money as a consortium
• compelling USP (unique selling point) when presenting as a consortium
• capability and capacity matches tender requirements
• can present as a winning team
• you have a better than 50:50 chance of winning the tender

No indicators

• you are blind to the client (your only information is from the written request to tender)
• risks are too high
• feel you are going through the motions
• lacking resources to submit a competent tender bid – no partners able to put in the development time 
• cannot price competitively – possibly due to one partner’s unit costs
• capacity is stretched
• there is an incumbent contractor and no evidence of dissatisfaction

Other factors to consider

• Does the contract fit or align with each partner’s strategy – does everyone have something to gain?
• Is the cost of bid preparation worth it?
• Has the consortium access to working capital and will the contract be profitable?
• What is the risk to each of the partners’ businesses (operations and finance)?

Generic tender process in ten stages

The following flow chart sets out the generic process for a larger tender:

Completing tender documentation

The tender documentation will vary slightly depending on the policies of the awarding body and the scale of the work being tendered but is likely to include:

• Preliminary Quality Questionnaire (PQQ) - A detailed questionnaire which is used as part of a first stage screening process. Any organisation is free to submit a PQQ however a restricted number of organisations will be invited to tender.
• Instructions to tenderers - These instructions are the rules for the tender process, what format responses should be in, how to find out more information and what the return date and time is. It is vital that you comply with all of the instructions included in this document.
• Terms of Reference (TOR)/ Specification - This is the most important part of the tender documentation as it sets out in detail the work that is being tendered. All partners should read this and confirm that they understand and agree with interpretations.
• Invitation to Tender (ITT) - Organisations that meet the standards required at the PQQ stage will be invited to compete in the final stage of the tender process. They will be issued with a detailed questionnaire along with various documents which must be signed and returned by the closing date.

When you submit a PQQ/ITT you will be asked a series of questions. These questions are designed to identify factors which would put the awarding authority at risk and give them the most confidence that they are making the correct awarding decision.  Completing the responses and providing the necessary documentation should be a team effort based on a detailed project plan.  The information typically required is set out here, but each commissioner will have slightly different requirements and this list is indicative only.

Pre-qualification requirements (PQQ)

The first stage in many competitive tendering processes is the completion of a Pre-Qualification Questionnaire (PQQ).  This is the first stage in the evaluation process and is open to any organisation that feels they can meet the specification requirements.  The PQQ normally includes a series of questions inviting you to give:

• details of your experience of completing similar types of work over a specified time period
• information about your policies and procedures including governance
• details of your financial capability
• confirmation of the legal status of the organisation(s), insurance cover and details of any third party accreditations

Information provided in the PQQ is evaluated using a scoring process which is usually provided to all applicants.  A short list will be produced and only those on the shortlist will be invited to tender.

Invitation to Tender (ITT)

The Invitation to Tender (ITT) will be issued to those organisations that have achieved the required standard in the PQQ submission with a return time and date.  The ITT will normally include:

• A series of questions which are specific to the tender: It is vital that in answering the questions your consortium ensures that all answers reflect the questions and are specific to the tender.

Typical questions are:

• Describe how you will deliver the work outlined in the tender?
• How will you ensure quality in the delivery of this tender?
• How will you manage the delivery of the tender giving details of the team and their relevant experience?

There will usually be a word/character limit for each response and any words over the limit will not be taken into account.

• A pricing template which should be completed in line with the guidelines: To complete the pricing template you will need to have worked out your costs and be in a position to ensure that you do not submit a price which loses money; If the price is too high you will be uncompetitive and could lose points in the scoring process, so it is advisable to have someone with financial skills involved in this part of the process.
• Copies of your policies and procedures and proof of information provided at the PQQ stage: Failure to submit this information usually results in disqualification.

The return time and date is important as failure to return or upload the completed ITT before this time will mean disqualification.  It is therefore recommended that you allow time to ensure that you don’t miss this deadline.

Information to prepare in advance

When planning a collaborative approach you should allow time to draw together as much information as possible well in advance of the tender being issued.  This should be stored, updated and be accessible to the bid team.

Short History of the Organisations Involved

• a short introduction
• summarise key milestones and achievements
• give details of legal status and governance structures
• rationale for the collaboration being set up

The Team

• explain who they are
• give details of their experience/qualifications
• identify the Senior Responsible Officer (SRO)
• outline the management structure
• summarise what resources are available for project

Relevant Experience

• give specific experience of similar projects to the ones being tendered for (update this on a regular basis)
• outline team or organisational experience
• demonstrate how experience is relevant
• summarise outcomes or previous similar projects

Other Experience

• outline experience of managing other programmes/projects
• demonstrate learning
• summarise outcomes

How We Will Deliver

• set out proposed approach
• use diagrams or flow charts
• be innovative

Endorsements/References

• build up a library of endorsement and references as you develop experience
• ask clients if they will give you future references when you complete projects
• explain to referees what the programme is and the timescale when references will be required

Certificates (IIP, Quality, H&S, Insurance etc)

• include all requested certificates
• get good quality copies scanned
• index them clearly          

Develop CVs for team

• get team members to update their CVs as their experience builds
• use standard format to facilitate reading and include photographs

Accounts for the past three years

• have available as an electronic copy so that they can be uploaded

To help review if your organisation is ready to tender see, Are You Ready to Tender?

CollaborationNI has created assistance for reviewing key areas of planning for collaborative tendering entitled, Organisational Readiness Action Plan and a template for planning entitled, Collaborative Tendering Action Plan .

Finding Out About Tender Opportunities

There are many sources of information on tender opportunities:

• websites and portals
• tender directories
• newspapers
• direct contact

Below are some sources of information and guidance on tendering, but you should keep close to the organisations likely to issue relevant tenders and make sure you are kept aware of opportunities.

• The Central Procurement Directorate is a central procurement body made up of the Procurement Service and Construction Service. Tender invitations are advertised on the Procurement Service website.
• e-Sourcing NI allows companies to take part in tenders through the network of Centres of Procurement Expertise (CoPEs), through which all Public Sector procurement is channelled. To respond to a tender opportunity you will first need to register on this site using the Register button. You will be sent a password via email, giving you secure access to the site. You will then be able to login with your username and password.
• This section of the DTI Website is designed for suppliers and potential suppliers to DTI. It is also intended for procurement contracts in other parts of the public sector, professional bodies, academia and the wider procurement community.
• The Forum on Public Procurement is the representative body for organisations and individuals concerned with public procurement in Ireland. Covering both Northern Ireland and the Republic of Ireland, its principal objective is to improve the quality and effectiveness of the public procurement market, for the benefit of all participants.
• eTenders provides a central source for Irish public sector procurement opportunities. This site provides access to tender notices and other opportunities that currently exist within the Irish public sector.
• Europa-EU gives an overview of the Public Procurement market in Europe and provides information on various issues such as legislation, standards, funding and signposts to other relevant PP websites.

Top tips for success

• Develop relationships with the organisations that you are likely to be submitting tenders to well in advance of the tender being issued; know their strategies; be familiar with work that they tender and their timescales as once the tender is issued staff will not give you information other than through the official process which will be available to everyone submitting a bid.
• Have a system of identifying tender opportunities; delegate the task of looking at appropriate web sites and checking tender sources on a regular basis to one or two reliable people in your organisation.
• Form a ‘bid team’ to complete the tender; include people with experience of the work being tendered for as well as completing tenders.
• Make sure that you understand what is being asked in the PQQ/ITT and that you answer the questions that are asked, not the ones that you would like to be asked.
• Complete a detailed ‘Tender Completion Plan’ with duties being delegated and timescales set for completion; give yourself plenty of time to review before the submission date
• Use the language of the awarding body and make sure that you quote their strategy where appropriate.
• If you have the opportunity, make sure that your submission is well presented using an easy to read layout. Most tenders will have little flexibility and you will be required to complete responses using a standard style and font size and within a word or character count.
• Get your submission in on time. The deadlines are set in stone and if you miss the return time by one second your submission will be rejected, having done all the work, it is a disaster to have it all wasted because you didn’t deliver it or upload it on time.

Regardless of the outcome of the tender you can ask for feedback on your performance. You should always take advantage of this opportunity to get tips to improve for future tenders.