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Choosing the right route to market – Procurement Essentials

Procurement Essentials is a new series of articles to help you overcome common hurdles, understand key concepts, and make your life as a buyer of common goods and services easier.

How do you go from identifying a need for a product or service within your organisation to choosing the right route to market?

Knowing the options open to you – and the rules you need to follow – when choosing how to go about procuring goods or services is crucial. 

UK procurement policy defines the overriding requirement for buyers as obtaining value for money – or ‘getting the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought’. 

Choosing the right route to market starts with understanding what the likely value of your procurement will be, and whether that puts you over or under certain legal thresholds.

Step 1: Contract value – know the rules

Thresholds – the limit above which you must follow procurement rules differ between different parts of the public sector, the devolved administrations, and on the type of goods or services you want to buy. 

Central government departments and their arm’s length bodies have different thresholds to our customers in the wider public sector, including local councils, schools and NHS Trusts. 

A typical high value threshold for goods and services is £118,000. Above this limit, you will need to follow the full procurement regime set out in the Public Contracts Regulations (PCR), and advertise your tender opportunity on the Find a Tender service. This is to ensure all suppliers have a fair and equal chance to bid for the contract.  

All contracts above that threshold, as well as those worth more than £10,000 (for central government) or £25,000 (for the wider public sector) should be advertised on Contracts Finder. You can still advertise on Contracts Finder even if the value of your requirement is below these thresholds, and this may attract a wider base of potential suppliers.

Your organisation may also have its own procurement processes. You may be able to seek 1 or 3 written quotes or, alternatively, put out an Invitation to Tender.

Public sector procurement is subject to a legal framework which encourages free and open competition between suppliers and value for money. This legal framework comes from the UK’s internationally and nationally-agreed obligations and regulations. The government also aligns procurement policies with lots of other wider policy objectives.

Step 2: follow the right process – open or restricted routes

For high value procurements you must follow the PCR, which includes specific processes to ensure all suppliers are treated equally when they bid for the contract. 

You can choose from 5 procurement procedures – some of which can only be used under special circumstances: open procedure, restricted, competitive dialogue, competitive with negotiation and innovation partnership. The most common procedures are open and restricted.

The open procedure is recommended by the Cabinet Office as the default procurement route and works best when you’re procuring common goods and services. It is a one-stage process which means suppliers can receive all the procurement documentation at once. 

The restricted procedure is a two-stage process. A pre-qualification stage reduces the number of suppliers, who then receive the next part of the contract information. The restricted procedure is useful where you might need to reduce the bidding suppliers to a manageable number for the award stage, or where you need bidders to sign an NDA before sharing confidential information regarding the contract. 

‘Competitive dialogue’, ‘competitive with negotiation’ and ‘innovation partnership’ are the most complex procedures – so speak to an experienced procurement professional if you take this approach.

Step 3: choosing the right route to market – using procurement frameworks

If you don’t want to put things out to tender yourself, procurement tools such as CCS framework agreements can help you identify a list of suitable suppliers. Frameworks also have the advantage of including pre-agreed terms and conditions, saving you time on negotiations, as well as having built-in, robust legal protections. 

CCS’s procurement frameworks have already been advertised on Find a Tender and suppliers have been assessed using one of the procurement procedures. This means all you need to do is follow the award process in the contract or in the customer guidance that CCS provides for all its frameworks, knowing that all suppliers who are able to bid have been assessed for their ability to deliver to the agreed standard on the goods and services you need.

You can also use the Digital Marketplace to find technology services and specialists for digital projects.

Find out more

More information and guidance for public and third sector buyers, as well as full details of all of our commercial agreements, can be found in the latest CCS digital brochure.

Channel website: https://www.crowncommercial.gov.uk/

Original article link: https://www.crowncommercial.gov.uk/news/procurement-essentials-choosing-your-route-to-market

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