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Home > Typical Assignments > Public Sector Procurement
Public Sector Procurement
Introduction
An important element of procurement consultancy is the ability to provide a robust procurement management function. The options and approaches for the procurement process and how our clients are guided through the necessary steps are an important part of our working relationship with our customers. Purchasing Software is fast becoming a day to day activity for most of our clients. The rapid changes in the public sector require a more responsive approach to procurement within the boundaries of the rigorous process applied within the public sector. Limited commercial experience and a lack of detailed understanding of the technology being purchased can be major issues faced by clients. Our challenge has been to build the required capability for our clients to adopt structured software buying techniques; make the necessary organisational and process changes, and develop the necessary interpersonal skills needed to become an effective software procurement specialist.
Business Issues
The success of a procurement process depends on implementing key steps such as:
- Identifying Business Need - The need for goods and services should be derived from business requirements, which are the responsibility of the 'Business Sponsor'.
- Writing the Business Case - It is important to provide accurate information on costs of hardware, software and associated services. This must reflect cost for the full term of the contract and not just the initial purchase costs, including licence fees, maintenance charges and professional services required to support the ongoing delivery of services. The business case should demonstrate value for money over the full life of the contract. Producing a business case the responsibility of the 'Bid Manager'.
Approach
At entier we use an approach that we have proven time and time again. There are various options with regard to financing & leasing, which we discuss with our clients e.g.
- Buy as you go
- Price Fixing
- Framework Agreements
- Pre Pay
- Enterprise License Agreement
- Finance with payment schedule
- Leasing and Lease Purchase
The client should consider all possible options to ensure that the chosen procurement route meets business needs and provides value for money.
The procurement strategy needs to be agreed and should consider the following sourcing options:
- S-Cat/G-Cat (the catalogue of Services and Goods operated by OGC)
- Existing Departmental Contracts (e.g. Framework contracts)
- Other Government Department (OGD) contracts.
- EU Competitive tender (OJEU)
The chosen procurement route must be fully justified and a full audit trail of the whole procurement activity must be maintained.
Procurement Plan - Procurement procedures will vary according to the chosen route but a Procurement plan should be produced. This is where tasks, roles and responsibilities are assigned (e.g. appointment of the evaluation panel) and activities are set out against a timetable. Also, decisions made on optional activities (e.g. the use of Pre Qualification Questionnaires) should be recorded.
Sourcing Options
- Services Catalogue (S-CAT) and Goods Catalogue (G-CAT)
- Single source
- Mini-competition
- Existing Departmental Contracts
- Contracts held by other Government Departments (OGDs) EU Competitive Tender
Evaluation of Responses
There are two types of evaluation:
- Commercial Evaluation;
- Technical Evaluation.
Evaluation takes place at the following key stages…
- Expressions of interest (if applicable);
- Pre Qualification Questionnaires (PQQs) (if applicable); and
- Bids in response to the Invitation To Tender (ITT).
… and other stages, which may form part of the procurement process, such as:
- Product demonstrations/Presentations;
- Reference Site Visits; and
- Proof of Concept;
Selecting the Supplier
We support our clients to select the bid that best meets their business needs. A number of criteria may be used in making the decision; e.g. cost, technical requirements, and organisational and strategic fit. A higher cost bid can be selected providing additional benefits can be quantified and justified in VFM terms.
Optional Activities
In addition to the mandatory activities, we discuss a number of activities that may or may not take place depending upon our clients' needs. The decision on whether or not to include the following activities will be taken when producing the Procurement Plan
- Reference Site Visits
- Presentation Day
- Debriefing sessions for unsuccessful bidders
- Proof of Concept (POC)
Supplier Negotiations
We support our clients during the negotiation process. Negotiations are normally undertaken as part of the clarification process to identify any potential areas in which the bid might be improved. They must be conducted in away that does not distort competition.
- We guide our clients through different pricing models eg
- Per Site
- Per Server/Machine
- Per CPU
- Per User - Concurrent and Named
- Per Connection/Connector
- Licensing - Development, Test, Deployment & Packaged
- The client should also be guided through the different maintenance models and associated pricing models e.g. Maintenance Fees, the Support Matrix
Award of Contract & Sign off
Once a supplier has been selected, we support our clients during the formal approval process from the budget holder.
Outcomes
Our experience of using our tried and tested processes provides ample evidence that our approach is effective.
We have helped our clients through key business decisions related to buying software and assessing competition.
We have helped our clients understand the basics of the software industry from a technical perspective, in particular how ever changing pricing models map back onto the technology that is being purchased and the relationship that maintenance has with license fees paid.
We also provide an insight into the mind of the Account Manager, understanding how they are paid, their operating thresholds and the flexibility they have when negotiating licenses, maintenance and services.
Finally, we explain how to predict what a software salesperson will offer as an initial bid, where they will discount and why.
entier has direct experience of assisting clients in managing the procurement process and outcomes in a number of major public sector organisations; for e.g. HM Revenue & Customs.
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