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OPINION4 September 2009

Public sector procurement leaves small suppliers out in the cold

News Opinion

New government procurement recommendations designed to help SMEs win business in the public sector could end up making things worse, according to independent researchers.

Members of the Independent Consultants Group (ICG) are well aware of the frustration experienced by UK market researchers with the public sector tendering system - in particular pre-qualification questionnaires (PQQs).

But new recommendations designed to help SMEs win public sector business risk making things worse if they don’t take account of the objectives of market research projects and the skills required to achieve them.

The general impression among ICG members seems to be that, rather than encouraging SMEs, the procurement process excludes them. Paul Hutchings of Kindle Research has called the PQQ system “a bewildering, frustrating and time-consuming process”.

Ben Lovejoy of Plug and Play Research said: “Procurement departments are excellent at negotiating good deals on widgets, but have absolutely no idea what makes a good research agency and thus they can’t design a process to find out.”

Last year the government asked a committee led by Anne Glover of Amadeus Capital Partners to look into how to make it easier for SMEs to supply the public sector, and to consider introducing a target for SMEs to win 30% of public sector business within the next five years.

The committee’s report, published last November, was welcomed by the government and work has commenced on implementation. Among the recommendations being considered is that “qualification criteria should be standardised and incorporated in all pre-qualification questionnaires”.

This raises two vital questions. What are the most relevant qualification criteria for public sector market research projects? And how do we make sure that the people deciding whether potential suppliers meet them are themselves suitably qualified?

Many of the PQQ criteria not only automatically exclude almost all independent market research consultants, but also other small to medium-sized market research agencies.

Questionnaires commonly include requirements for an equal opportunities policy, an environmental policy, ISO 9000 accreditation, compliance with health and safety regulations in the workplace, submission of three or more years’ annual accounts, and very high levels of professional indemnity and public liability insurance. Our view is that these criteria are irrelevant to the great majority of market research suppliers.

We suggest that the following criteria be included as standard – on the grounds that they are  relevant and inclusive of suppliers of all sizes:

  • Evidence of prior working experience of similar projects
  • Demonstration of the ability to select the correct methods and techniques to meet the stated objectives of the project
  • Demonstration of how the findings arising from the recommended methodology will be both accurate and reliable so that decisions can be confidently based upon them
  • Showing how a supplier’s recommended methodology will add value and/or insight
  • Relevant formal educational and/or professional qualifications of the candidate(s) or project manager(s)
  • Provision of costs that represent best taxpayer value, but which may not necessarily be the lowest costing submitted.

Unfortunately public sector procurement departments do not always have the knowledge or experience to assess market research competencies. They are therefore often not qualified to make objective judgements about the best suppliers to invite to tender. In practice, procurement departments look to see whether PQQ boxes are ticked, rather than make quality-of-service judgements.

We believe that those best able to make a fair assessment of both PQQ submissions and resultant tender applications are those public sector personnel who will use the research outputs. Ideally the same staff will also have some understanding of market research methodology but, if they do not then external assessors should be hired from within the market research industry to provide this experience – as already happens in many private sector client organisations.

Failing to address these issues would deny the public sector the opportunity of being supplied by some of the most highly skilled and experienced market research experts in the country.

6 Comments

10 years ago

A recent Parliamentary report shows that small businesses are still finding difficult to bid for public sector contracts, despite Government policies and attempts to intervene. The report, released by the House of Commons All Party Parliamentary Small Business Group (APPSBG), recommends that many barriers still need to be removed to help SME's win public sector contracts.(Ref. Source: Contract Eye (http://www.contracteye.co.uk/public_sector_contracts.shtml)) A major problem is not that public sector agencies are not preparing the pathways so that SME's find the process of tendering a lot easier a recent survey conducted in the London area by Business Junction concluded that most SME’s do not tender for public sector contracts - their perception is that they will be unsuccessful and their time and resources would be better spent on pursuing activities which are less demanding and whose outcome is more within their grasp. (Ref: London SME Survey conducted by Business Junction March-2009) Other major factors include the level of audit that public sector agencies have to undergo and the frequency of these audits, which SME’s might not be aware of. Public sector agencies inadvertently award contracts to suppliers who take the time to get into system and find out how it works and (in most cases) provide goods/services/supplies that are of the required standard at the right price and at the right time and by so doing provide added value. At the same time that public sector agencies are preparing to make the system more attractive (for use of a better word) SME’s also should show some commitment to take part in the system by finding out ‘how the system of public procurement operates, it is of no use that SME’s complain on the difficulties of entry and subsequent success - while at the same time giving excuses as to why they do not take part. Among the reasons for the audit is that - it is public money (collected in taxes - from the same SME's that do not take part) - that is being spent, these SME's fail to realise that the UK is part of the EU and that SME's in any part of the EU has the same right to submit a tender in response to an invitation to tender, just the same way as UK SME's. If public sector agencies spent a lot of their time sorting out unsuitable tenders there would be an outcry on how much time and money is wasted on such a process from these same SME's. SME's have a duty to find out 'how the system works and what is required to satisfy the requirements of the system', it is not a sustainable position to imagine that the government will somehow wave away EU or their own policy directives just because some SME's say 'I am not interested, it is too difficult and anyway I might not win the contract'. Another point is that even if SME’s were given the 30% of public sector contracts as indicated by various reports it is not certain that they would flock to take part and in some cases not all SME’s would be capable of fulfilling the requirements of these contracts - all SME's need to be encouraged to allocate some time for personal training and personal and business development, which not only improve their chances of success but also other areas of their business activities, unfortunately training has been traditionally a sore point with most SME’s. There is a process in all things and success only comes if and when you are fully prepared and competent enough to take part in the process. Regards Lloyd Sewell Tendering for Contracts Training Tel: 01483 267098 http://www.tfc-training.com http://www.tfc-training.com/tfct_pres.htm (PS) You are free to make use of this article in full – under normal copyright rules. REF: Lloyd Sewell started in business (1988), as an importer of golf equipment while living in South Limburg, Holland. He has both UK and European business experience, expertise in developing and providing training and advice to individuals and small businesses, counselling for new business start-up, and providing training on bookkeeping and accounting systems .Other past activities include, treasurer of Thames Valley Small Business Club, member of a local action group, member of executive action program, instrumental providing assistance in the planning and successful delivery of the first Black Lawyers Conference in London in year 2000.Training projects "Tendering for Contracts Training" first piloted in the form of a one-day workshop to small firms is available online at: http://www.tfc-training.com

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10 years ago

So "Public sector agencies inadvertently award contracts to suppliers who take the time to get into system and find out how it works and (in most cases) provide goods/services/supplies that are of the required standard at the right price and at the right time and by so doing provide added value"? How do public sector agencies award ANYTHING inadvertently and claim competence at the same time? I am presuming that I am not replying to a new graduate being ironic but the tone of this comment makes me wonder. Public sector procurement is notorious for buying the wrong tools with the wrong tools at the wrong price. The list would go on all morning - Chinook helicopters (no software because MoD Procurement knew best) and Passport Office software (supplier ran rings around Procurement, going over-budget and supplying late - try that as an SME and find-out how many times you get to pitch again). These are just two immediate examples that come to mind. All of these "added value" items were bought from companies who had taken great pains to get to know the system in which "compliance" with the system itself is the only immediately apparent goal. Unlike the first commentator I did not notice anyone in the article waving the UKIP card, trying to blame the EU for this when the EU provides an over-arching system which does not account for the huge variation in PQQ and Procurement processes, all happily invented on taxpayer's time and money in the UK to increase the apparent added value of a public sector procurement staff that has repeatedly and expensively, with my tax money, proved itself not fit for purpose. The reason for my anonymity is that contrary to the blanket assertion from someone touting for business, I DO pitch for public sector work, although I am seriously coming to doubt it is worth the effort. The public sector procurement process has no apparent interest in the quality of the product and does everything it can to exclude anyone with any product knowledge from the selection process. The results speak for themselves.

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10 years ago

I am also writing anonymously, as I am currently working 'inside' the system ... ie a full MRS member managing market research for a public sector organisation, and have also done so for two other similar bodies in the past three years, including a Government Department. Please do not confuse the clear intent of many researchers (both market and social) who appear from my experience to feel 'handcuffed' by procurement policy. Most researchers I have come across, both with heavy public sector leanings and those like myself with extensive private sector experience, want to promote and use smaller agencies. Yes it is true that most PQQs contain questions that ask about equal opportunities, environmental policy, accreditations etc. Please remember these are important to the 'client' from a wider perspective, rightly or wrongly. However the trick for us researchers trying to encourage more smaller and 'one man band' researchers to at least apply for research frameworks is that the weightings that are applied to PQQs can 're-balance' the equation. The scoring allocated to such a criteria can easily be downgraded compared to what some of the ICG members have advocated as relevant criteria - demonstration of quality research which is clearly of higher value. It's just a matter of score weighting. So small research agencies and independenet consultants out there, please keep applying to frameworks - there may well be someone (other than a procurement operative) who really is on your side and wants you to have a crack and is trying to ensure you are represented. Buyers want you to succeed too!

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10 years ago

My small business has submitted both government quotes and tender, some successful some not. They take a lot of time to compile and extra attention compared to normal RFT/Qs because the compliance aspect can fail the bid, even if everything has been addressed sufficiently. We always ask for feedback if unsuccessful and have had answers (in writing) stating things like "not sufficient industry experience" for a composting industry project. Now, if this was such a major deal breaker should it not have been clearly stated as a criteria in the RFT? If it had I would not have wasted 4 days on completing the bid. Another one was "you seem busy and therefore we assumed too busy to undertake the project given you are a small enterprise." What the? is all I thought - why would anyone go to a company that wasn't busy? We had made it clear in the bid that we are a boutique company and we schedule projects meticulously and do not take on other work that impacts on the delivery of confirmed work placed with us. Even that's not enough to convince them.... In the end I have given up directly applying for RFTs/Qs unless it is a department I have worked with before or one that has a good reputation for their procurement. Sad because I know other SME's that are saying the same thing so the pool government draws from is smaller and that cannot be a good thing?

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10 years ago

From to point of view of members of the Independent Consultants Group members, theproblem is that to date the PQQ system is designed on the assumption that all potential suppliers of market research services are employers. Hence questons are included about equal opportunities policy, environmental policy, IS) 9000 accreditation and so forth. These are simply irrelevant to ICG members because we are not employers by defintion. If we were we could not be members. However, PQQs are designed by public sector procurement departments and it these departrments that make the final selections for projects. Unfortunately. it is a case of the wrong people who make the final selection decions based upon the wrong selection criteria. Many of us in the ICg know this to be true from actual experience of submitting our bids for public sector tenders. Hopefully the Glover Report and its recommendations has provided us with the opportunity to persuade government as represented by the Office of Government Commerce (OGC) to improve the system to make it more SME friendly. I can understand why Llyod Sewell believes that SMEs should make more of an effort to find out how the system works and to be trained in how to bid for public sector tenders. His company provides the training.

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10 years ago

Rather proving my point, the Nimrod crash investigation (http://www.telegraph.co.uk/news/newstopics/onthefrontline/6453387/MoD-cost-cutting-led-to-Nimrod-spy-plane-crash-that-killed-14.html) lays the blame for the biggest single loss of life for UK forces outside the Falklands war not at the feet of the Taliban or Iraqi forces, but UK MoD Procurement. The assumption was that because the aircraft had flown safely for 30 years it would continue to do so. This epitomises the tick-box procurement approach of measure-everything-know-nothing I have seen so often.The cited story of incompetence, complacency and cynicism is exactly my experience of the public sector process. Any thought about what they were actually buying was ignored if it was even attempted, and the job went out, "fully compliant" to the "most economically advantageous" tender. MoD procurement is not just incompetent. It has blood on its hands. New Labour and KPMG brought about this cultural shift at the MoD. As usual with the public sector, no-one is to blame.

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