Should size matter?
Francis Maude’s statement that he is scrapping onerous pre-qualification questionnaires (PQQs) to help SMEs access more public sector contracts is welcome news. He announced a number of measures including no central government PQQs for contracts under £100,000 as well as the creation of SME product surgeries.
Bias should not be part of any tendering process, especially where public funds are involved. The problem is not so much that many tenders are biased to big companies; more that they are biased against small ones. The issue is not so much the OJEU process or the European Union’s fault, but the interpretation and application of the regulations by the buyers.
What is the point of a PQQ? It should be about filtering out suppliers who are not going to meet your needs and including those that can. The trouble is this invariably gets translated into ‘show us your policies for training, CSR, diversity, health and safety, accounts for the past five years’ and so on. Big companies have loads of material on this. However, many small, innovative companies – which might make an excellent supplier but may be a new business – don’t.
It might seem incongruous, but the government’s desire to improve access to SMEs is fully supported by DHL, one of the world’s largest private sector companies, with over half a million employees. Why? Our experience in operating NHS Supply Chain for the past four years has been telling. We’ve integrated the PASA and NHS Logistics to create a commercial, customer-focused organisation. We’ve found that in order to create access for small, innovative businesses we’ve had to make life simple for them and for us. We’ve used ‘pilots’ as a way of getting their inventions into the NHS without needing to implement OJEU until we’ve seen if customers use them. We’ve also been ruthless in considering the questions we ask in our PQQs and tenders. We ask ourselves: what are we going to do with the answer to this question? Can we evaluate a supplier’s response? If we don’t know, we don’t ask.
Additional government measures such as the ‘mystery shopper’ concept which invites challenges to poorly constructed tenders and the SME panel which aims to hold the government to account are steps in the right direction but they focus on what is being issued rather than how they can be better constructed in the first place.
There is also to be an interchange programme to bring secondees from business into public sector procurement teams to transfer skills and provide civil servants with broader commercial experience. This is a positive step but we need more detail and it needs to start as soon as possible. Tendering processes can be very drawn out as a result of the level of scrutiny and compliance and anything which can be done to streamline this and produce quicker, more effective results must be implemented immediately.
☛ Roger West is head of procurement outsourcing, DHL Public Sector
![[Bloglines]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/bloglines.png)
![[del.icio.us]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/delicious.png)
![[Digg]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/digg.png)
![[Facebook]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/facebook.png)
![[Google]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/google.png)
![[LinkedIn]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/linkedin.png)
![[Twitter]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/twitter.png)
There are pros and cons. If without trials, sizeable companies always prevail and buyers can in no way test if small companies are competent. How can small companies be developed?
PQQs should be proportional to the proposed contract. I start off with a standard template, and then consider what I need to know. If I don’t need certain responses, I don’t ask for them. However, if the organisation is looking to award a long-term, high-risk contract, then it may be necessary to look at various policies.
I tend to ask for turnover details only, initially, and consider the responses in relation to the size of the contract. I would only ask for accounts if I had any concerns, and refer these to an accountant.
Public sector bodies are increasingly being required to consider non-technical issues, e.g. Equality and diversity. SMEs may not have developed policies in these areas.
Feedback on how we can we overcome these issues, especially if PQQs are scrapped, would be interesting.
It is correct that public sector bodies often request odd policies and other documents – however a point to note is that if the contract procider is happy that supplier (a) understands his needs and provides the goods/products/services that will be required – why would they spend valuable time with supplier (b) who does not understand his/her requirements – even if they can supply these same goods/products/services.
The potential contract supplier must take the time to understand “How the system works” – if they intend to profit from the excercise – there is no alternative and the relevance of any government action is limited – since all public sector agencies are audited – and all expenditure must be accounted for – and faliure may result is personal liability from the individual concerned – so public sector procurement officials are unlikely to take that risk of personal liability.
Here is a short presentation that highlight all sectors of the PQQ – I hope it helps – http://www.tfc-training.com/flh/tfct_pre.exe
You can also find more information here – http://www.tfc-training.com/uk_sme_public_procurement.htm
Regards
Lloyd Sewell
Tendering for Contracts Training
Is this not just an uninformed attempt to be “seen to be doing something”? (cf the Philip Green report).
Not clear to me how removing PQQ stage will benefit small suppliers – tender and evaluation exercises will be drawn out and there will be many more disappointed, out of pocket small suppliers.
At least at the moment their costs are limited when they fail a PQQ and they can then get focused feedback on how to improve their chances, rather than raise their expectations unfairly by allowing them to tender for any number of contracts through the open procedure.
In reply to Graham Crook, absolutely right about proprtionality.
The PQQ questions on specific subjects such as Equality and Diversity would in my view have to be limited to any legal breaches or professional misconduct together with remedial steps put in place. Although SMEs will probably not have developed policies, it’s likely also that they will have no legal or professional convictions.
Where something like Equality and Diversity is relevant to the subject matter of the contract I think it would be appropriate to ask for details of previous experience of that type of contract and hoe they implemented those specific aspects rather than ask for a policy as such.
At evaluation/award stage I think the important thing is not to ask about policies but rather to ask specifc questions about how those policies will be implemented on a daily basis in your contract.
It’s professionally lazy not to right-size a PQQ not just for the Requirement but for the supply base. Yes have full-blown PQQs for PLCs and the like but scale-down the required response on information for SMEs within that PQQ…..if you don’t you’re hardly going to be comparing like-for-like! If an SME can’t respond on certain questions because they are not appropriate for their size of organisation then what are you going to do? Penalise them by not awarding compliancy marks? Same principle of approach needs carrying forward into the tender exercise too. (I’ll get off my soap-box now…….)