Call for tenders – How to search for pro­cure­ment bids

Requests for tenders by public service entities and gov­ern­ment de­part­ments like the National Health Service, in­di­vidu­al UK boroughs and councils or the UK Atomic Energy Authority are highly sought after. That’s because public service contracts are usually for a longer duration and are viewed as pres­ti­gi­ous in many in­dus­tries. In 2015, the UK gov­ern­ment spent around £260 billion on such contracts. To ensure that all companies have a fair chance to secure a service contract, au­thor­it­ies must issue contract op­por­tun­it­ies publicly. In­ter­ested or­gan­isa­tions can then apply for a tender by a set deadline. Public au­thor­it­ies procure services according to the proposals received that best match their re­quire­ments and available funds.

Gov­ern­ment pro­cure­ment in the UK is regulated by European Union rules as set out in the 2014 Directive. As one of the 27 member states of the EU, UK con­tract­ors can bid on projects published by member states. The rules may change depending on the outcome of Brexit in 2020.

The UK is also part of the World Trade Or­gan­isa­tion’s Agreement on Gov­ern­ment Pro­cure­ment (GPA).

A call for tenders is the process whereby a gov­ern­ment or private or­gan­isa­tion invites service con­tract­ors and suppliers to make an offer to execute a proposed project. This could include the supply of parts (e.g. in aerospace sectors) or the provision of services (e.g. marketing ini­ti­at­ives for an education de­part­ment). Pro­cure­ment notices are not only used by gov­ern­ment or public sector au­thor­it­ies but are also fre­quently employed by private companies and in­di­vidu­als. However, contrary to private companies, public sector entities are legally required to tender, and pro­cure­ment is heavily regulated.

Tendering for state-funded projects must be ac­cess­ible to all companies. Calls for tenders are therefore usually published in spe­cial­ist journals or online in dedicated portals. Au­thor­it­ies or companies may first release a request for proposals that allow service providers to discuss the methods and tools they would use to fulfil a contract. Pricing can also be discussed at this point. A tender is the procedure of bidding on the proposed project once the spe­cific­a­tions and price ranges are es­tab­lished.

In many countries, gov­ern­ment de­part­ments who receive tax funding are legally required to publicly tender service projects. That’s because le­gis­la­tion states that public money should be used as ef­fi­ciently and eco­nom­ic­ally as possible. Strict pro­cure­ment pro­ced­ures also serve to minimise cor­rup­tion and nepotism when awarding public contracts.

In­creas­ingly, private companies are using tenders to obtain the most eco­nom­ic­al offer for their projects. This allows them to minimise costs and increase their prof­it­ab­il­ity.

Contrary to public clients, com­mer­cial or­gan­isa­tions aren’t required to adhere to strict pro­cure­ment reg­u­la­tions set out in the Public Contracts Reg­u­la­tions 2015. Special reg­u­la­tions apply to defence and security public contracts.

There are five types of pro­cure­ment pro­ced­ures in the tendering process:

• Open tender: The majority of public tenders are procured via open pro­ced­ures. This means that anyone can bid on a contract to supply services or goods in line with the con­trac­tu­al re­quire­ments. Open tenders are used where there are no special cir­cum­stances or re­quire­ments. The number of bids received is not re­stric­ted in an open tender. It provides the best op­por­tun­ity for new companies and start-ups to secure gov­ern­ment work.
• Re­stric­ted or selective tender: In a re­stric­ted procedure, a shortlist of suppliers is created. This may include a pre-qual­i­fic­a­tion survey to determine suitable con­tract­ors. Selected companies are then invited to tender. De­part­ments and companies use selective tendering to reduce the ad­min­is­trat­ive costs that a large number of bids could burden them with, and to ensure that con­tract­ors match their re­quire­ments. Highly complex or secretive projects often involve re­stric­ted pro­ced­ures.
• Ne­go­ti­ated tender: This type of pro­cure­ment procedure is mostly used within the en­gin­eer­ing and con­struc­tion industry. A ne­go­ti­ated tender occurs once a company has selected one or two suppliers and ne­go­ti­ates with them on certain aspects of a contract. This may involve fee ne­go­ti­ations or could concern specific con­trac­tu­al ob­lig­a­tions.
• Com­pet­it­ive dialogue tender: Sometimes, a client may specify the desired outcome of a contract but remains unsure as to how to reach their goal. For example, a public authority may require new software, but not know how to implement it. That’s where a com­pet­it­ive dialogue can be useful. A hybrid of a re­stric­ted and ne­go­ti­ated tender, the first stage of a com­pet­it­ive dialogue enables companies to discuss and negotiate in­di­vidu­al aspects of a project. During the second stage, an in­vit­a­tion for tenders is extended.
• In­nov­a­tion part­ner­ship: In­nov­a­tion part­ner­ships are unique to the EU and were in­tro­duced in the UK in 2015. These part­ner­ships allow au­thor­it­ies to work with spe­cial­ists and con­tract­ors to develop a product or solution that doesn’t currently exist. Suppliers can submit ideas to notices. Au­thor­it­ies are then able to make a selection and can choose more than one partner to fulfil a contract.

As part of the EU, the UK has access to a large number of contracts across member states. Depending on the outcome of Brexit, pro­cure­ment reg­u­la­tions will need to be revised and in the worst-case scenario, the UK may lose access to the majority of EU contracts. However, the UK is part of the WTO GPA which means that UK companies can bid on in­ter­na­tion­al contracts and vice versa. This includes some European contracts above a certain

threshold.

Whether EU prin­ciples for public pro­cure­ment apply or not depends on the value of the contract. Thresholds are €144,000 for service and supply contracts and €5.548 million for con­struc­tion projects. Contracts below these limits are usually subject to national pro­cure­ment reg­u­la­tions.

These thresholds mean that EU and UK public sector contracts must be published on the Tenders Elec­tron­ic Daily (TED) website which is the official tenders website of the EU.

Thanks to the Internet, searching for tender op­por­tun­it­ies is now re­l­at­ively easy. Multiple websites regularly publish calls for bids. The UK gov­ern­ment provides a dedicated portal to search for public sector contracts.

Open tenders are listed by location, authority, value of the contract, the date they were published and project deadlines. In­ter­ested con­tract­ors can read a brief de­scrip­tion of the project and contact the client to obtain further in­form­a­tion.

Pro­cure­ment notices in the EU are published via Tenders Elec­tron­ic Daily (TED).

Lower value tender notices are published on mytenders.co.uk.

Sometimes op­por­tun­it­ies are published in spe­cial­ist trade journals, though the majority of contracts are nowadays available online.

If a company is in­ter­ested in bidding for a tender, they can request the pro­cure­ment doc­u­ment­a­tion via the relevant authority or directly from the client. The details received should include in­form­a­tion on the technical expertise and skills required. They should also provide an in­dic­a­tion of the ex­pect­a­tions from the client and spe­cific­a­tion of services required. Usually, bids will include in­form­a­tion on the ap­plic­a­tion procedure and deadlines.

In general, the following re­quire­ments apply to all par­ti­cipants taking part in a pro­cure­ment procedure:

• They must have the necessary spe­cial­ist knowledge or skillset and may be required to submit proof in the form of previous work contracts or re­gis­tra­tion cer­ti­fic­ates.
• The company must prove its op­er­a­tion­al or per­form­ance potential by sup­ple­ment­ing a list of personnel and financial resources.
• A company must show that it is re­spons­ible and reliable by sub­mit­ting cer­ti­fic­ates of conduct and proof of timely tax payments.

Tenders may call for ad­di­tion­al re­quire­ments depending on the project or services required.

Where a company meets all re­quire­ments and is in­ter­ested in securing the project contract, it needs to send off all completed and error-free doc­u­ment­a­tion to the con­tract­ing authority or client. Once the deadline has passed, au­thor­it­ies will assess all ap­plic­a­tions.

When writing a tender, it’s important to focus on what the client wants and how your company may fulfil their brief most ef­fect­ively. Some of the important points to cover when writing a tender are:

• Skills. How does your company meet the needs of the client? Propose solutions to the stated problems by focusing on your spe­cial­ist skillset and ex­per­i­ence.
• Qual­i­fic­a­tions. If a client has requested qual­i­fic­a­tion doc­u­ment­a­tion, make sure to include this in­form­a­tion.
• Value. Discuss proposed fees and how your company provides value for money. It’s not ne­ces­sar­ily the lowest bid that wins a contract. Often, con­tract­ors are chosen depending on what they can bring to the table.
• Resources. Demon­strate that you have the necessary resources to finish the project. This includes staff, fa­cil­it­ies and tools/machinery. You can emphasise the strengths of your team and elaborate on why they are the most suitable for the project.

The following stages demon­strate the procedure for an open tender (i.e. a public in­vit­a­tion for tender). These steps apply to most tenders with the exception of re­stric­ted pro­ced­ures and where no public in­vit­a­tion to tender is issued.

1. First, a public sector authority or com­mer­cial company iden­ti­fies a need and outlines the specific ob­ject­ives to realise a goal. These can be sum­mar­ised in a service de­scrip­tion.
2. Then, it creates the tender documents which detail the services expected. Special qual­i­fic­a­tions or skills required to meet the demands of the project as well as legal and con­trac­tu­al con­di­tions are detailed.
3. The award procedure is based on expected per­form­ance, applicant re­quire­ments and cost cal­cu­la­tions. In the majority of cases, calls for tender are open. Other types of pro­cure­ment pro­ced­ures are only made where necessary.
4. The call for tenders is published online or in special print media. Tenders must include contact in­form­a­tion so in­ter­ested parties can request more in­form­a­tion or download the specifics.
5. In­ter­ested ap­plic­ants submit their completed offer and all necessary doc­u­ment­a­tion such as cer­ti­fic­ates, ref­er­ences, fee cal­cu­la­tions, service de­scrip­tions, and other ex­plan­a­tions.
6. The awarding body securely stores the ap­plic­a­tions until the deadline has passed. Ap­plic­a­tions are only viewed once the deadline has been reached.
7. Tenders are subject to a formal review upon opening. Documents con­tain­ing formal errors are auto­mat­ic­ally excluded.
8. Ap­pro­pri­ate offers are evaluated. Clients will pay attention to a company’s qual­i­fic­a­tions and ex­per­i­ence. Proposed costs are assessed against com­pet­it­ive offers.
9. Where an offer is deemed suitable and eco­nom­ic­al, the awarding authority decides which company to award the contract to. In rare cir­cum­stances, for example, where none of the tenderers are deemed eligible to fulfil a contract, the call can be cancelled.
10. There is usually a “stand­still period” during which un­suc­cess­ful tenderers can view feedback on their sub­mis­sion and challenge the review for more in­form­a­tion.
11. Finally, un­suc­cess­ful bidders are usually debriefed. According to UK reg­u­la­tions, un­suc­cess­ful tenderers are provided with guidance on why the winning bid was better than their offer. The ex­plan­a­tion given will be unique to the con­tract­or and cannot be a standard reply given to all ap­plic­ants.

Please note the legal dis­claim­er relating to this article.