Dermot Cahill and Ceri Evans describe a survey of Welsh companies’ experience in tendering for public sector contractsOctober 30th, 2012
A majority of supplier organisations responding to public procurement tenders in Wales are not provided with feedback following the outcome of a tendering exercise, according to our research. This contrasts with bids for larger contracts that have to be advertised across the European Union. In these instances suppliers must by law be automatically provided with feedback.
However, because the majority of Welsh companies are too small to bid for most EU size threshold contracts, this means the contracts that they typically apply for are the ones where they tend not to automatically receive any feedback. Overall, Welsh suppliers are dissatisfied with the level and quality of feedback they receive from the Welsh public sector.
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We carried out an in-depth survey at Bangor University involving several days of interviews with 40 Welsh companies in transport, printing and publishing, engineering, environmental, consultancy, business services, education, training, energy and manufacturing. The results showed a negative experience of tendering to the public sector in terms of the feedback element.
In the survey 85 per cent said they were not provided with automatic feedback when they were notified of the results of their tenders. Even more worrying is they said that they usually had to request feedback, and sometimes had to make such requests repeatedly in order to get a response.
Wider participation in public procurement is vital for the future of the Welsh economy and the growth and sustainability of private and third sector organisations in Wales. It accounts for some £4 billion, approaching a quarter of Welsh public sector spending, and has the potential to provide a substantial boost to indigenous enterprise in Wales.
Feedback for companies that have been unsuccessful in bidding for contracts is important for at least the following reasons:
- It promotes integrity and confidence in the public procurement process, because it give suppliers confidence that the process has been conducted with integrity, even when the feedback they receive demonstrates that their tender had fatal flaws.
- It helps the supplier to identify what skills deficiencies, or other deficiencies, they possess, and allows them to identify their weaknesses, so that they can do something about it for the next time that they intend to enter a public procurement exercise.
- Suppliers expect comprehensive and meaningful feedback given the effort and time they devote to tendering and because of the opportunity costs incurred.
- The practice of systematically providing good feedback drives improvements in tender processes because it helps public purchasers to identify areas where suppliers need to make their future tenders fit-for-purpose. This has benefits for both purchasers and suppliers.
It is important to state that some organisations received commendations from suppliers concerning the quality and care that they took in order to give effective feedback. The reality is that there can be considerable differences in the quality of feedback provision within each public sector organisation – for example, between centralised procurement units where there has been adequate training, and decentralised departments where individuals are often purchasing on a part-time basis. However, in general, suppliers in Wales appear dissatisfied with public sector purchasers when it comes to feedback.
Moreover, in situations where suppliers did receive some ‘feedback’ all that most were given was merely a statement of their overall score, in comparison with the winner’s score. Only a minority (10 per cent) received an explanation describing the weaknesses in their submissions.
Of the suppliers we interviewed who had received written feedback, 44 per cent found that it was not useful at all, with a further 33 per cent giving written feedback a rating of only 2 out of a possible 5. Generally, the feedback companies get fails to give them guidance so they can improve their tendering capabilities in future.
This lack of adequate feedback means suppliers are discouraged from applying for contracts again and many will not even consider doing so with the particular public sector organisation with which they have been dealing. In response to our survey:
- 10 per cent wondered whether the tender process was carried out properly and according to procurement rules and regulations.
- 25 per cent stated they were put off ever bidding for public sector contracts again.
- 35 per cent said the lack of feedback meant they were prevented from improving their tendering skills.
It is clear that Welsh public procurers face difficulties in delivering effective feedback, in terms of resources but also their organisational culture. However, this must be tackled if we are to develop strong indigenous businesses with the skills to sell to the public sector.
If Welsh SMEs are to grow employment, and help regenerate the economy, winning more public sector contracts has to be a priority. We are not saying that contracts should always be awarded to local companies – that would be a recipe for short-term gain and long-term disaster. What we need is an improvement in the public procurement feedback system to be embedded in the procurement practice of all public purchasers in Wales.
If public sector tender offers were made clearer and fit for purpose, the effort currently spent on evaluating tender offers could be reduced and the time saved used to give more effective feedback. This would have the added benefits of helping Welsh SMEs to become more tender-ready and better equipped to win contracts outside Wales.
A number of public sector organisations have made improvements to feedback provision in recent years. However, this seems to have been driven more by a desire to comply with the requirements of the new EU Remedies Directive, rather than a desire to assist the SME sector with effective feedback. Implementing good practice because one is forced to do so by legal obligation, rather than by organisational aspiration, is not a good way to proceed.
We have also observed that suppliers’ public procurement experience is much better when they deal with trained procurers. So we need more effective professional training for procurement officials within the public sector. Bangor University is helping meet this need with its new Masters in Procurement Law and Strategy, a programme welcomed by John McClelland who has recently conducted reviews of public sector procurement in both Wales and Scotland.
This acute training need was acknowledged in Influencing the Modernisation of EU procurement Policy, a task and finish group report by members of the National Assembly’s Enterprise and Business Committee in May. They referred to what has become known as the ‘McClelland benchmark’, following his review of procurement in Scotland in which he states there should be one skilled professional for every £15 million of spend. According to recent data, Wales has 106 procurement officers with a Chartered Institute of Purchasing and Supply qualification. Applying the McClelland benchmark would mean that Wales should have 174 professionals. In our view, there should be even more than this – 174 is the absolute minimum.
We have been conducting public procurement research in Wales and Ireland since 2004 and, repeatedly, the question of feedback has arisen as an issue. However, this is the first time that we have quantitative data to support our findings. Public sector bodies now have an opportunity to recognise there is a problem, and more importantly, do something about it. Meaningful feedback to a supplier involves much more than numerical ranking against the successful tender. To be effective it should openly:
- Explain how the evaluation process was carried out.
- Detail how the scoring method was applied in a transparent way.
- Provide guidance as to what the evaluators were looking for in submissions.
- State how many organisations competed
- State who won the tender.
- Provide the suppliers’ score for each evaluation factor in comparison to the winners’ score and average score;
Most importantly, feedback should provide detailed, meaningful and prescriptive explanations why the supplier was not successful according to each evaluation criteria. Suppliers do not want high-level generic comments. They want to know what they need to do to improve, with indicative guidance on their strengths and weaknesses, and suggested corrective actions.
The new sustainable development White Paper being prepared by the Welsh Government for publication this autumn offers an opportunity to legislate on feedback requirements along these lines. Sustainable communities need employment and economic regeneration. Providing effective feedback to Welsh SMEs when they lose a tender would better equip them the next time they seek a public contract, whether in Wales or further afield.