Industry news

Informal Pre-procurement Conversations with the Government

26th January 2012

Due to misconceptions and over-interpretation of EU rules, sophisticated pre-procurement conversations were something that outsourcers only dreamed of. Now following Francis Maude’s statement: The Crown & Suppliers, a new way of working, those dreams are about to come true.

The NOA Masterclass, Informal Pre-procurement conversations with the Government, was hosted by Yvonne Williams and featured three key speakers who shared their insights on informal conversations with the Government.

Ian Cartledge is a senior Business Development Director at Teleperformance UK specialising in the Public Sector. He has over 20 years’ experience of working in the Business Process Outsourcing and contact centre industry.

Ian presented on how suppliers can be proactive with Government before the start of a formal procurement process, without it being seen as creating bias and unfairness in the process.

Ian said: “What should come before procurement is ‘Market Consultation’. The cost of public sector in France is £19,000 – and in the UK its £46,000. It typically costs four times as much to bid for a public sector contract than it does overseas. This can possibly be reduced through early talks.”

Ian emphasised that an open dialogue should be:

• Planned, transparent and universal

• That goes beyond the “usual suspects”, a range of views from a range of potential providers

• It is early enough in the process so that Government bodies can seek or accept advice that may be used in the preparation of the specifications

Technical dialogue sessions or supplier days are a great way to engage

• Gathering reliable information from the supply side to help build confidence in the viability of an effective procurement

• They are seen as vital in terms of obtaining market intelligence about what types of solutions may be out there

• Supports the design of a fit-for-purpose procurement, one that is lean (thus saving on process cost) and one that will deliver better outcomes

• Provides the foundation for a well thought out and researched PQQ and ITT providing the right information first time round for companies to respond to

• Allows companies to ask specific questions to perfect their bid rather than just trying to collate basic information to enable a response

• Helps build knowledge – having an understanding of what is being tendered, and when, helps companies to plan

Ian Hamerton, National Contact Centre Manager, NHS Blood & Transplant, has managed significant and lasting improvements in the service provided to donors.

Ian shared his experiences of purchasing processes and offered tips on how to get the best out of a pre-procurement meeting along with the process of retendering or putting together a new contract.

Pre-Procurement Meeting

• Acknowledge differences of interpretation with good grace

• Give everyone the same answer to the same question

• Ensure everyone at this stage knows what every question is

• Understand that most will not share their concerns in open court

• Try to anticipate issues and provide answers

Retendering or New Contract?

• If re-tendering be absolutely certain no routine contact with the incumbent delivers preferential knowledge or understanding

• Existing suppliers need to guard against complacency

• If a totally new project ensure everyone who applies receives the same information

• Potential suppliers must respond in the manner, format and with the information asked for – particularly important with the onset of computerised purchasing tools

Mike Ferguson is Head of Operational Procurement at Land Registry. Mike manages a team of procurement professionals primarily responsible for IT spend covering categories including hardware, complex software deals and professional services. Mike also leads all major IT procurements and has considerable experience of supporting major IT change management programmes and latest EU Public Procurement Regulations.

Mike shared his practical experience of pre-market engagement through ‘Concept Viability’.

Concept viability is facilitated by Intellect (trade association UK technology industry). Business needs are collated then circulated to a list of suppliers. Intellect facilitates a report based on findings which is fed back to the land registry.

Mike said: “Land Registry was the first organisation to use concept viability – a process which engages a whole market sector with ‘what is the broad approach of what we are trying to do.’ We see engagement with suppliers before the procurement process absolutely invaluable.” Benefits include:

• Market warmed up

• Senior management support

• Good way for suppliers to interact

• Market intelligence, market capability, market feedback

• Critical review of requirements

• Early visibility of risks

• Help design the procurement process

• Better outcome

The panel discussed various questions from the floor at the end of the session including:

• Do existing suppliers get preferential treatment?

• Has legal intervention increased during the procurement phase?

• Do long-term incumbents really lose a re-tender?

• How can international suppliers feed into the government?

• Can SME’s really win government contracts from the big players?

Serco, the international service company, has announced that it has been awarded a number of contracts providing a range of operational support, engineering and training services, known as Multi-Activity Contracts (MACs). The contracts to the UK's Royal Air Force (RAF) and Naval Air Command have a combined total potential value to Serco of £130m.

Serco has successfully rebid its RAF Northolt MAC, providing aviation and engineering facilities and logistics support at this major RAF airport, including maintenance and associated support of 32 (The Royal) Squadron, and at various satellite stations in and around London. The contract commences in April 2012, is for a threeyear period with options to extend by up to a further four years and would have a total value to Serco of approximately £70m over the full seven years.

West Midlands Police, along with Surrey Police Force, has issued a tender to deliver a "cutting edge approach" through a seven year shared service deal.

The forces are hoping others will come on board the initiative which could see spending rise to £3.5bn.

RealNetworks, Inc. has announced that it has signed an agreement to sell a significant number of its patents and its next generation video codec software to Intel Corporation for a purchase price of $120 million. Under terms of the sale, RealNetworks retains certain rights to continue to use the patents in current and future products.

"Selling these patents to Intel unlocks some of the substantial and unrealized value of RealNetworks assets," said Thomas Nielsen, RealNetworks President and CEO. "It represents an extraordinary opportunity for us to generate additional capital to boost investments in new businesses and markets while still protecting our existing business.

"RealNetworks is pleased Intel has agreed to acquire our next generation video codec software and team," said Nielsen. "Intel has a strong reputation as a technology innovator, and we believe they are well positioned to build on the development work and investment we've made in this area."

Illumina Inc. is granting investors the right to buy shares at half the price in a so-called poison- pill defense, following Roche Holding AG’s hostile $5.7 billion bid for the maker of gene-mapping tools.

Shareholders will receive one preferred stock purchase right as a dividend for each common share held as of the close of business Feb. 6, San Diego-based Illumina said in a statement. Investors will also have the right to purchase $550 in common shares for $275, or, assuming a price of $55 a share, 10 common shares at that price. The rights won’t be exercisable initially, Illumina said. The strategy can block an unwanted bid by making it prohibitively expensive.

A mixed global economic outlook, high levels of volatility, weak consumer demand, and ongoing corporate uncertainty continue to impact outsourcing demand and consulting growth, according to the KPMG 4Q11 Sourcing Advisory Pulse Survey of KPMG field advisors and leading global business and IT service providers.

The study also found that organisations engaged in outsourcing are recognizing the need to invest in IT-enabled solutions, but must overhaul business and operating models to fully exploit the technologies' potential.

"Buyers are placing great emphasis on investing in IT, but given the economic uncertainty, all efforts undertaken will occur under watchful, cost conscious eyes," said Stan Lepeak, global research director in KPMG's Management Consulting Group. "Buyers and providers are smarter, more experienced, and less likely to enter into larger and more risky deals, and evolutionary innovations such as cloud computing and targeted BPO are changing the nature of what constitutes outsourcing."

Some 73 percent of advisors and 79 percent of providers polled cited the weak economy as likely having the biggest impact on buyer businesses and operations, especially in Europe.

Monaghan Mushrooms has signed a two-year deal with Belfast IT and business process outsourcing firm Equiniti ICS. The contract concerns off-shore software development support and will be delivered from centres in Northern Ireland and India. Outsourcing is expected to play a major part in the growth of the Irish mushroom producer.

npower has created 200 new positions in the north east, and hopes to fill them by the end of March. The call centre jobs are available in: Peterlee, Houghton le Spring and Thornaby.

Paul Robinson, head of npower’s contact centres, said: “We have noticed a significant increase in demand from our customers which is why we are growing our contact centres. These jobs are designed to bolster our team and ensure we can deliver the very best service to customers. We hope to attract a wide variety of applicants from across the region. This is also great news for the North East with the creation of 200 new jobs at a time when a number of organisations are reducing the size of their workforces.”

The company that owns Harvester, O’Neills and Toby Carvery is rolling out cloud computing across the whole group. Mitchells & Butlers, the largest restaurant and pub operator in the UK, has partnered with Fujitsu to extend networked SaaS to its 1,600 branches.

Mike Sackman, chief information officer at Mitchells & Butlers said:

"Customers will be able to book tables, and place orders including takeaways from their smartphones, and access public wifi in our branches. There is a revolution in what our customers want to be able to do with their own technology. We will also be able to offer much more personalised promotion and marketing to them."

Rhapsody has acquired Napster's European operation, marking the music streaming service's first move beyond the US market and kicking off a battle with Spotify.

The US service, which has only been available to American customers for the past 11 years, has reached a deal to acquire Napster International's subscription music business.

The deal, for an undisclosed sum, will see Rhapsody launch in the UK and Germany under the Napster brand name and take the fight to the increasingly popular Spotify.