Public sector procurement: how does it work?
Workforce strategy

What is public sector procurement and how does it differ from doing business with the private sector?

When a public sector body buys any goods, works or services, that is public procurement. Public procurement is different from when private companies do business with each other because of the regulations that apply to all public sector contracts over a certain value, known as a threshold.

What are public sector contract thresholds?

Any public sector organisation publishing a contract opportunity over a certain value or threshold must advertise it in the Official Journal of the European Union (OJEU). There are different thresholds in place depending on the type of contract being awarded and the sector the contract is being advertised for. Contracts with a value less than £106,000 are 'below OJEU’ and anything over that is considered high value.

I’ve heard the term tendering, what does that mean?

A public sector contract can also be called a tender and the procurement process is sometimes known as tendering, but it all comes down to the same thing - a public sector organisation buying goods, works or services.

What’s the difference between open and restricted tenders?

In an open procedure advertised tenders invite interested parties to submit bids by a set date, which are then evaluated, and contracts are awarded to the winning party or parties.

In a restricted procedure there are usually two stages. The first is a filtering stage in which a shortlist of providers is identified using a pre-qualification questionnaire (PQQ). The second stage follows the open procedure, with shortlisted contractors submitting bids.

We’re a small company, aren’t most public sector contracts out of our reach?

Not at all, public sector contracts vary greatly in size and scope, and many are better suited to smaller, local providers. You might also want to consider working together in partnership with other organisations to form a consortium that can, jointly, deliver a service.

Where are public sector contracts advertised?

A contract notice is how a public body formally announces an opportunity. It’s your first opportunity to understand what the buyer wants and it’s your first chance to put yourself in the running for the eventual award. These are advertised through commissioning or contracts portals, which you can sign up for (see below).

What does a contract notice include?

A contract notice contains all of the information about the requirement, usually including the contract value, the specific nature of the requirement, the tendering procedure to be followed, the criteria the supplier will need to meet and the economic, financial and technical capacity that will be expected of successful bidders. Sometimes there’s more information than this, but this will only help you put together the best possible response.

I’ve read through the contract notice and the requirement is divided up into different lots. Do I have to express interest in all of them?

No, only for the lots, or requirement, that you feel you can deliver. Make sure you read the notice very carefully though, because the commissioning body might prefer to work with a single provider who can deliver against multiple lots.

What’s a framework agreement and how is it different from a contract notice?

Frameworks are umbrella agreements that set out the terms – particularly relating to price, quality and quantity – under which individual contracts (call-offs) can be awarded throughout the period of the agreement (normally a maximum of four years). They are typically used when the buyers identify a need for specific products or services but are unsure of the scope or timeframe.

Does being on a framework agreement guarantee contracts?

Sadly not, there’s no guarantee of business even if you’re selected as an approved supplier and there’s risk too, as suppliers unsuccessful at the selection stage are locked out of any call-offs for the duration of the agreement.

If we’re included on a framework agreement for the provision of counselling services, does this mean we have an advantage over competitors?

It depends. Competitors outside of the framework agreement will not be able to express interest in a call-off (contract) and, if your organisation is the only one on the framework agreement, the buyer can simply call-off a requirement from them as and when they wish. However, if you’re one of a number of providers on the framework agreement you may find the buyer awards the contract based on best value for money.

My Local Authority awarded a contract without it going out to tender. Can they do this?

Yes, depending on the contract value. For example, for contracts below £10,000 an award can be made after just one written quotation. Under the provisions of section 135 of the Local Government Act 1972, every Local Authority must set out their contract procedure rules. These are publicly available and set out contract value ranges and required procurement routes.

Can I find out who was awarded a contract?

Yes, contract award notices appear in the same place as the contract was advertised. The notice usually includes information about when the award was made, the criteria the award was made on, the number of offers received, the details of the successful bidder and the value of the contract.

What if I disagree with a contract award, can I do anything about it?

It’s not unusual to feel aggrieved by a contract award decision that didn’t go in your favour, however if you feel that errors have been made or processes have not been followed in accordance with the law, you can raise a challenge under the Public Contracts Regulations 2015. For this you would need to seek advice from a qualified legal professional, but time is of the essence in procurement claims. In most cases, you will generally only have thirty days from the date you were aware there might be grounds for a challenge to bring a claim and sometimes as little as ten days.

If you want to raise concerns anonymously about potentially poor public sector procurement practice you can do this through the Public Procurement Review Service.

For more information contact Kris Ambler, BACP Workplace Lead, at kris.ambler@bacp.co.uk