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Open procedure procurement – why the market needs more guidance on the process

By Graham Tomkinson, PA sourcing and procurement expert

In the UK, there is a strong Cabinet Office push to encourage the use of the open procedure for more complex procurements, particularly for services based on or enabled by information technology. The approach gives the whole market, including SMEs, the chance to participate and, because of the shorter timescale for the procedure, reduces costs for bidders.

However, while some open procurement procedures have delivered these benefits, others haven’t. Some have resulted in the procuring authority receiving only a small number of poor-quality and qualified tenders. 

This situation is not acceptable to either the government or the market. Both parties are spending more resources and time than necessary on procurements. So what can be done to address this challenge and deliver the benefits that the open procedure can bring? 

To encourage more and better tenders under the open procedure, the Cabinet Office must start to develop a meaningful dialogue with the market across all industries. The aim should be to give businesses the confidence to make what appear to be riskier bid decisions, and to educate potential bidders in the standards required and the operation of the open procedure. 

We have supported a number of open procurements. The particular issues we see include: 

Suppliers have decided not to tender

A key factor in bidders’ decision on whether to tender or not is the probability of winning. It’s harder to gauge this in an open procedure than in a restricted procedure where, after bidders have made it through the PQQ stage, their chances are much clearer. In addition, completing a PQQ requires much less effort than producing a tender. As a result, we are finding that decision makers are less likely to approve expenditure on open than restricted procurements. 

Responses are not fit for purpose

Some aspects of the government’s ICT contracts are hard to understand and difficult to respond to correctly. This is particularly the case for financial models. These are always challenging documents to complete, but in the open procedure, the tenderer must respond without any support from the contracting authority (apart from guidance notes), which exacerbates the challenge.

Responses are qualified

Unlike the restricted and competitive dialogue procedures, the open procedure does not allow for the qualification of responses. However, many tender responses have been qualified and qualifications must be addressed to the extent allowed under the regulations. This considerably increases the risk of a successful challenge to the procurement, and also increases costs.

Businesses are shying away from open procedure procurements because they think they’re more risky than restricted procurements, or because preparing a tender is too difficult and too expensive. If public procurers want to receive a good range of high-quality, unqualified tenders, the market needs more guidance.

To find out how PA can help you with your procurement and sourcing requirements, please contact us now.

Contact the government and public sector team

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