Among the rapid changes facing the NHS at the moment is the increasing exposure of services to competition by commissioners in order to secure maximum value for money.
Where once acute trusts would provide services almost as of right, through geography or history, they are now increasingly being asked to tender in competition with other potential providers.
Many trusts have little experience in this field; so what is the process, and what are the keys to successful tendering?
Procurement in the UK is subject to a whole raft of domestic and EU rules and regulations, designed to ensure fairness and transparency. Many healthcare services are exempt from some or all of these regulations, but the requirements for a fair and transparent process remain.
Therefore, commissioners often base their procurement process on the EU processes - of which there are several types. The simplest, an open process which allows any willing supplier to submit a tender, may appear straightforward but in reality often results in a very large number of organisations submitting tenders - all of which must be fully and fairly evaluated.
In a restricted process, the commissioner restricts the number of tenderers by carrying out a pre-selection or pre-qualification process, usually though requiring prospective tenderers to complete a questionnaire setting out details of their organisation, its experience and expertise.
For the most complex procurements, commissioners may use a process involving competitive dialogue (CD), where the procurement includes a dialogue stage giving both sides the opportunity to clarify and refine proposals.
Both restricted and CD procedures (or variants thereof) are increasingly used by commissioners to expose services to a competitive commissioning process.
So what are the secrets of submitting a high quality tender?
Firstly, the prospective tenderer should carry out initial analysis to decide whether to bid at all. Bidding can consume a large amount of time and/or money, so the tenderer should be satisfied that they have a reasonable chance of winning the contract on acceptable terms. In particular, the prospective tenderer should ask ‘what are our wins themes – the factors that give us a competitive advantage?’
These can be many and varied – geography, track record in a specialty, reputation, relationships, or even a lack of competition. If there is no competitive advantage, there may be little point in bidding.
Once the decision to submit a tender has been taken, a properly resourced bid team must be assembled. This may include external financial and legal advisers depending on the scale and complexity of the exercise. With this basic preparation complete, what are the most common reasons for losing a tender?
1. Failing to manage time
Task one in the tendering exercise should be to produce a bespoke project plan and timetable. This should identify key tasks and allocate them to named individuals. There are several tools available to assist in this process, perhaps the best known of these is Microsoft Project. Once the project plan has been developed, the bid manager must carefully monitor progress and take early action to deal with any slippages. Procurers do not take kindly to missed deadlines; a late tender will routinely be disqualified - and it is far easier than many people imagine to simply run out of time.
2. Not answering the question
Invitations to Tender (ITTs) will generally require bidders to respond to a series of questions covering a wide range of matters such as clinical approach, IM&T, facilities and accommodation, and staffing. The responses to these questions are then evaluated by the commissioner and scored against a pre-set points framework.
Each of the questions in the ITT must be read carefully and the response written specially for that question. Bidders sometimes fall back on responses to previous ‘similar’ questions which have been prepared for other ITTs. These responses may have been developed for questions with subtle or not-so-subtle differences; cutting and pasting a previous response is a certain route to losing points.
3. Failing to build a relationship with the procurer
The key objective of commissioners is to let a contract on acceptable financial and commercial terms. The procurement team will seek to provide tenderers with the all of the information they might need to develop a robust tender submission. Much of this information will be contained within the ITT documentation. However, it will be for the tenderer to identify any gaps or seek clarification of any ambiguous matters. This clarification process provides an excellent opportunity for tenderers to build a positive relationship with the procurer and ensure that their submission is as relevant and well developed as possible.
4. Poor presentation/poor English
The tenderer’s response should be produced to a high standard, with appropriate flowcharts, diagrams and illustrations. I would also like to make a plea for tenders to be written in a decent standard of English. Poor English is likely to give the evaluator a headache, which in turn is likely to reduce the points score. Anyone who does not know the difference between principle and principal, enquire and inquire, or consortium and consortia should not be allowed anywhere near a tender response.
Competitive commissioning is likely to be an increasingly common occurrence in the future, whether run by PCTs or commissioning consortia. Those providers who understand the rules and devote sufficient time and effort to tender preparation can look forward to great opportunities to develop both the quantity and quality of the services they provide. Those who cannot rise to the challenge are likely to see their operations shrink significantly over the next few years.
Richard Tierney is a public sector procurement specialist at BDO LLP.