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Successful Tendering Procedures for Public Sector Contracts:
The contracting authority planning the public procurement prepares the call for tender and sends the invitation (through appropriate publication services) to candidates to recognise relevant documentation and to issue their tender. In short, it provides notification of tenders to the suppliers.


The Tendering or Bidding Phase:
Covers the preparing of an offer by a tenderer and its submission to the contracting authority. In short, the response to the contract notification. This will normally only take place after strategic thinking and planning, it is the result of a marketing approach to the public sector.

Contract Awarding phase:
This phase begins with the opening of the tenders. After checking the contents of tenders, the winning tender is selected.

Contract Execution phase.
After the contract is awarded, the contract shall be executed by both parties the contracting body and the successful bidder.

Which procedure has to be followed by the contracting authorities before the contract is awarded? The contracting authorities must choose between three different procedures for the awarding of contracts. These procedures are a statuary legal requirement of all public sector agencies and are laid down by the Eurpoean Commission and incorporated into English Law.
Open procedure: Open procedure:
All interested suppliers, contractors or service providers may tender. Anyone interested in tendering who submits a compliant tender to the contracting authority within the appropriate time limit, in response to its invitation to tender, must be considered for the contract.

Advantages:
Unlimited amount of offers, therefore unlimited competition. Relatively quick.

Disadvantages:
Risk of huge pile of paper, all to be examine by the contracting authority.

Restricted procedure:
Only those suppliers, contractors or service providers invited to participate by the contracting authority may submit a tender.

Improvement of the SME Access Improvement of the SME Access with the New Legislative Package
Although there is some evidence that the current directives have a positive impact on public procurement markets and on SME participation, there are still some concerns that those markets are not yet sufficiently open and competitive. In order to respond to those challenges, the European Commission put forward proposals in May 2000 for a new legislative package that aimed to make the existing texts clearer and simpler and to adapt them to modern administrative needs and to the new economy.

The Tender documentation
The documentation is also sometimes based on defining a solution where a description of the outcome required would allow some flexibility in the solutions offered.

Time Constrainints
It is equally vitally important that all tender documents be delivered on time - preferably - before the final date specified in the tender invitation document.

Thresholds
The EC Directives apply to public sector procurements above certain monetary thresholds (for central government, these thresholds are approximately £100,000 for goods and services and £4,000,000 for works). Further details can be found under the Legal and Policy Framework section on the OGC Website.

Open Procedure
The Open Procedure is a one-stage procedure where the public sector advertises its requirement asking for tenders to be returned by a given date. This procedure is used a great deal by local authorities.

Negotiated Procedure
The Negotiated Procedure is only available in very limited circumstances and like the Restricted Procedure it has two stages. However the second stage allows departments to enter into substantive negotiation with tenders.

The tender process has two distinct stages.
After a call for expression of interest or invitatyion to tender has been made in the Official Journal, applicants must submit their requests to tender within a specified period. The contracting authorities then considers these expression of interest and excludes non-compliant tenders, these include all tenderer's who are unable to fulfil the technical specifications or who fail to meet the eligible criteria. The shortlisted candidates must then submit their tenders before a second deadline.

Advantages:
Preliminary selection of candidates based on qualitative criteria. By reducing the number of candidates there is less paperwork to examine.

Disadvantages:
Longer and sometimes more complicated procedure. Higher risk of complaints and court action.

Negotiated procedure:
Direct discussions and negotiations take place between the contracting authority and one or more suppliers, contractors or service providers of its choice. The negotiated procedure mostly applies to the utility sector

Advantages:
Hardly any procedural rules. Possibility to choose candidates without pre-selection procedure.

Disadvantages:
Can only be used in exceptional circumstances. As there is no objective pre-selection, there is a higher integrity-risk. The contracting authorities can choose which procedure they will use. All the Directives encourage the use of the open or restricted procedure, specifying situations where the negotiated procedure is permitted.

Technical capacity: The technical knowledge and ability of a contractor:
In construction projects, the references which the contractor may be required to produce must be specified in the notice or invitation to tender.

The Pros and Cons of Framework Agreements
  • For buying organisations, they are flexible, making it easier to vary quantities, while still negotiating bulk buy rates.
  • For vendors, they provide credibility and a foot in the door, but there is often no guarantee of work and the application process can be a slog. Read full advantages and dis-advantages here: -
  • Source: Kable GC weekly Newsletter


    Standard Industrial Terms & Definitions Sources of Information
    Where and what kind of information is available about Public tenders? One of the key elements of the public procurement regime is that all contracts caught must be advertised in the Official Journal. All public contracts are published in the "Supplement to the Official Journal" (S series) and available on the internet: if you have currently have access to the internet you can click this link to see examples OJEC Journal Improvement of the SME Access
    The Nature and Scope of a Project
    Enterprises express their concerns about the difficulty of identifying the nature and scope of a project through the specification document. If a specification document is unclear, it can be difficult to ascertain the size and, therefore, to approximate budget for a project. This makes quoting an appropriate pricing schedule difficult.

    Tender Format Response
    The format for responses is not consistent. Companies have to provide the same information in different formats each time they tender. Information that is frequently duplicated includes: financials, insurance requirements, company profile and methodology. Much of this information has been provided earlier.

    Tender Document Preparation & Presentation
    It is very important that the SME tender documents is professionally prepared and presented, that all related documents that have been requested, have been included, under appropriate headings, that the financila statements, company policy statements, company staff details and all requested regulatory documents are included.

    Restricted Procedure
    The Restricted Procedure is a two stage procedure which involves separate selection and award stages. For further details please see the step by step guide entitled Restricted Procedure.

    The Negotiated Procedure is only available in very limited circumstances and like the Restricted Procedure it has two stages. However the second stage allows departments to enter into substantive negotiation with tenders. Costs associated with bid preparation and proposal costs.
    These costs are a result of shortage of skilled labor that has the experience dealing with bid preparation. It is also because public procurement often involves greater bid and proposal costs than those found in commercial contracting.

Unclear Specification Document
If a specification document is unclear, it can be difficult to ascertain the size and, therefore, to approximate budget for a project. This makes quoting an appropriate pricing schedule difficult. The format for responses is not consistent.

Companies have to provide the same information in different formats each time they tender. Information that is frequently duplicated includes: financials, insurance requirements, company profile and methodology. Much of this information has been provided earlier.


There is no single way of finding out about subcontracting opportunities. Public-sector organisations may give you information about their main contractors or you might identify and contact a supplier who has won a major contract, for example through the OJEU. Make contact with the Euro Info Centre in your region if you want to obtain this information.

Regulatory Burden:
The regulatory burden associated with the public procurement process and with contract performance may be formidable for SME's. Some regulatory aspects of procurement, much of which is not related directly to selection of the contractor or contract performance, may constitute a significant barrier to entry for SME's.

Fees Associated with Procurement Documentation may be onerous for SME's.
The costs of inspections and contract administration may be relatively more burdensome for SME's. It is often very difficult for SME's to seek legal recourse against the government, and dispute resolution or litigation may entail transaction costs that are unduly burdensome to SME's that lack in-house counsel who are paid fixed salaries. Competition law and sometimes the law on small business programmes themselves may make twinning or joint venturing costly or risky. In some cases, governments may take action to alleviate regulatory burdens on SME's.

euro-info
Euro Info Centre


Europe Interprise



Europe Council for Small Business


Small Business Europe


For more information

 ITOL Accredited (Certificate / Diploma*) in Tendering & Public Sector Contract Management 

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