What is eProcurement

Procurement Directives Overview The aims of the Directives are to ensure:      The free movement of goods and services within the EU. (Suppliers across all the EU are treated equally) Effective competition for public supplies, services and works contracts Open purchasing procedures and practices Removal of technical barriers to trade through harmonization of technical standards and codes Publication of advance information about public sector procurement programmes  There is a right to appeal The EU directives apply to most public sector contracts for goods and services over c154,000GBP in value, and works contracts over around 3.8million (GBP) in value. Be Open and Transparent Be Objective and Fair Be Consistent Overview – Procurement Procedures Open Open to ALL suppliers to tender. • Opens up the market place to all bidders and can encourage competition Restricted All suppliers can express an interest, but only those suppliers who meet the minimum requirements for economic, financial standing and technical capability may tender.  Allows purchasers to avoid having to deal with an overwhelmingly large no. of tenders. for technical reasons or because of protection of exclusive rights, the contract can only be • An example is when Negotiated Only those suppliers who meet the minimum requirements for economic, financial standing and technical capability may tender; a client may negotiate the terms of the contract with these suppliers. carried out by a particular person. • Allows contracting Competitive Dialogue The first phase ‘the dialogue’ allows for discussion between the invited tenderers and the contracting authority. At end of dialogue phase tenderers are invited to submit proposals which are not subject to further negotiation. authority to develop further suitable solutions for its requirements, on which chosen bidders can tender. Open Procedure OJEU Notice Standard 52 days Expression Of Interest ITT Evaluate Tenders Select Successful Tenderers Award Contract Reduced to 36 days with PIN 40 days for electronic tendering  Key Features:  Under the Open Procedure, any supplier who wishes to participate may request a copy of the tender documents and the contracting authority is bound to supply them with a copy of the documents and to consider their bid if they submit one.  All tenders are evaluated against a pre-agreed evaluation framework. The contract is generally awarded to Most Economically Advantageous Tender (MEAT).  It is important to remember that these time-scales do not specifically include any time for preparation of the invitation to tender documents, analyse the tender submissions or draft the contract. Restricted Procedure OJEU Notice PQQ Standard 37 days Evaluate PQQ Responses Shortlist Suppliers ITT Evaluate Tenders Select Successful Tenderers Award Contract Reduced to 26 days with PIN, 30 days for electronic tendering 40 days or 36 days with PIN 35 days for electronic tendering  All interested parties may express an interest in tendering for the contract but only those meeting the contracting authority's selection criteria will actually be invited to do so.  The restricted procedure is a two-stage process. Stage one is where requests for information from interested suppliers are gathered in order to assess their general capability and financial strength. Stage two is where suppliers are short listed according to those that passed the initial qualification and then sent tender documents to the contracting authority.  This route may be used where a contract is complex or specialist or where there are issues of confidentiality.  Also restricted tenders are traditionally used in situations where many bidders are expected. (etendering processes are reducing the administration workload, hence resulting in more open procedures). Restricted Accelerated – (with PIN) allows the timescales to be shortened further in limited circumstances.  Time scale - must be advertised in OJEU and allow 15 days for applicant to register interest, and 10 days from the date of dispatch of tenders to the closing date. Negotiated Procedure Same as Open Procedure Then… Standard 37 days Evaluate Tender responses Purchaser Can ask Clarification Questions Suppliers Respond to questions Select Successful suppliers Further negotiation Award Reduced to 30 days with electronic contract notice  Under a negotiated procedure, the contracting authority may select one or more suppliers with whom to negotiate the terms of the contract  Negotiated procedures are the least used of the tendering procedures  Where they are used, they tend to relate to large, complex procurements  There are two types of Negotiated Procedure: with the publication of a notice, and without the publication of a notice. There are strict rules concerning the use of the Negotiated Procedure and very few contracts qualify. One of the rules is that it may be used "when, for reasons of extreme urgency brought about by unforeseeable events, the time limits for the Restricted or Open Procedures cannot be met".  An example of where an OJEU notice is not required is when for technical or artistic reasons or because of the protection of exclusive rights the contract can only be carried out by a particular person. Competitive Dialogue OJEU Notice PQQ Select Tenderers Invite Tenderers To Dialogue Dialogue Phase: Filter Tenderers Final Tenders Evaluate Tenders Select Successful Tenderers Commence 10 day standstill Award Contract Standard 37 days Reduced to 30 days with electronic contract notice  Key Features:  It is in use for awarding complex contracts, where there is a need for the contracting authorities to discuss all aspects of the proposed contract with tenderers; Open or Restricted procedures would not allow the award of such contracts.  Dialogue is allowed with selected suppliers to identify and define solutions to meet the requirements of the contracting authority.  The award is made only on the most economically advantageous tender criteria.  Dialogue should aim to reduce the number of solutions/bidders.  When to use Competitive Dialogue:  If contracting authorities cannot define technical means of satisfying their needs or objectives.  If the financial and legal make-up of the project cannot be defined in advance. Competitive Dialogue continued OJEU Notice PQQ Select Tenderers Invite Tenderers To Dialogue Dialogue Phase: Filter Tenderers Final Tenders Evaluate Tenders Select Successful Tenderers Commence 10 day standstill Award Contract Standard 37 days Reduced to 30 days with electronic contract notice  Options for Implementation of Competitive Dialogue via eTendering: 1. By secure messaging and/or attachments - this gives you the benefits of the audit trail, but not good for setting enforceable deadlines or tracking versions 2. By single ITT & additional rounds - this allows you to set deadlines and add an iterative dialogue 'round', but may be a bit complex if not used to the 'final-round' function. 3. RECOMMENDED APPROACH - By several phased ITTs - i.e. create an initial phase 1 ITT, then when it is completed, copy it to a 2nd phase separate ITT (deleting suppliers that are not carried into the new phase) and publish to launch the second dialogue. Recent Updates  “Alcatel Ruling” - 10 day mandatory standstill period – 31 January 2006:  Contracting Authority must inform tenderers (in writing) of information regarding decisions to award a contract.  This information must include, award criteria, scoring if applicable and name of winning tenderer.  Contracting Authority must allow at least 10 days between the dispatch of this information and the start of a contract.  Request for Debrief: If debriefing is sought by the tenderer within 2 working days, the contracting authority must debrief in time to allow the supplier 3 working days to approach the court.  Article 54; „Use of electronic auctions‟ – 31 January 2006:  In open, restricted or negotiated procedures, the Contracting Authority may decide that the award of a contract is preceded by an electronic auction.  The eAuction shall be based on; solely price if contract is to be awarded to lowest price or prices/new values if contract is to be awarded to most economically advantageous tender.  Contracting Authorities which decide to hold an eAuction should state the fact in the contract notice.  Prior to an eAuction a full initial evaluation of tender responses must be carried out in accordance to the award criteria.  Throughout an eAuction adequate information must be provided to tenderers, (minimum ranking).  Auctions can be closed if; a date/time is predefined; when no new prices meet minimum requirements; if all requirements are met.  After closing an eAuction, it must be awarded in accordaance to Article 53, on the basis of results achieved during the event. Ie: 1st ranked supplier wins in a sole award event, or in ranking order for a multi-supplier award. Recent Updates  Consolidation of Procurement Directives:  The previously separate, supply, works and services public sector regulations are now consolidated into a single set of regulations.  The public sector regulations expressly provide for framework agreements and eAuctions for the first time. eTendering eTendering eTendering is a powerful end to end procurement process management system that provides automated analysis tools that free buyers from paper and admin overload to focus on value added activities and better decisions. Where eSourcing fits in… The eProcurement Lifecycle comprises two aspects – eSourcing supporting sourcing activity and ePurchasing supporting transaction purchasing. Payment Initiate Project Establish Business Need Invoice/GPC Develop Business Case Assess Market Receive Produce Requirements Define Procurement Strategy Order OJEU Notice / Advertisement EOI / PQQ ITT / ITN eAuction / Negotiate Selection/ Requisition Content Management Contract Management Close Project Workflow/ Approval Award Contract Implement Contract Business rationale for eSourcing Governance How do we keep track of all decision making activities and policies? Savings How can we improve the performance of our negotiations? Cycle Time How can we conclude our sourcing initiatives in the quickest time possible? Risk How do we ensure appropriate products/services are procured from reliable suppliers? Focus How do we free buyers to focus time and energy on value adding areas? – supplier performance, contract management, managing specifications, global sourcing, eAuctions etc. etc. The new interaction model SUPPLIERS BUYERS E-mail Tender Archive Opening Control Paper documentation Impact of e-Tendering on EU timescales Contract Notice published in OJ Open Receipt of EOI/ PQQ responses Invitation to Tender Receipt of Tender responses Contract Award - 52 days or 36 days with Prior Information Notice (PIN) - Reduce to 45 days for electronic contract notice or 29 days with PIN - Further reduce to 40 days for electronic tendering - 37 days - Reduce to 30 days for electronic contract notice - 37 days - Reduce to 30 days for electronic contract notice - 37 days - Reduce to 30 days for electronic contract notice - 40 days or 36 days if PIN is issued - Further reduce to 35 days for electronic tendering Restricted Negotiated Competitive Dialogue - Not specified - Not specified -16% -23% 77 65 -19% -19% 52 40 37 30 37 30 Open Restricted Negotiated Competitive dialog