TenderScout wishes Niamh Bushnell well in her new role as Head of TechIreland

The reality of running a tech start-up is far from the image words like “founder” and “entrepreneur” instil in people’s minds. While I wouldn’t change it for anything, guiding your business idea to fruition can be isolating at times, and challenges are par for the course nearly everyday.

People you meet can have a huge effect in this environment, and Niamh Bushnell’s influence on TenderScout will be felt for a long time to come.

Niamh’s support of TenderScout started in the early days when she was part of the panel that included us in the final of the WebSummit Spark of Genius Award. This was a great industry validation of what we were about and looking to achieve as a start-up, and a huge mental boost for myself.

Her championing of TenderScout continued with Niamh inviting us to participate in startup activities and SaaS workshops. Niamh also played a pivotal role in our seed investment round by introducing us to Gianni Matera of Growing Capital who led our Seed funding round.

Of great personal meaning, Niamh invited TenderScout onto the Mentoring for Scale programme although we hadn’t raised any funding and we weren’t as far along as others. Now, as Niamh moves to her new role, it’s with pride that I can say we have warranted her belief in us and are scaling into new markets in no small part due to the quality of mentoring that we’ve received.

Both myself and TenderScout would like to thank Niamh for her support through the years and we wish Niamh everything of the best as she takes up her new role as Head of TechIreland.

 

How to write a winning tender proposal

Are you applying for government tenders? You should be.

Globally, government tenders are worth a huge 18% of GDP, and in the Republic of Ireland, the largest buyer from Irish suppliers is the Irish government.

Yet you could be one of the many business owners who don’t attempt to compete for government tenders, which could be in relation to anything from looking for a stationery supplier to seeking ecommerce consultancy services, believing that you’d never stand a chance of winning one.

We’ve got news for you.

Firstly, government tenders are regularly awarded to SMB suppliers.
Secondly, to win one you need to have a strategic approach. Applying for a tender in an ad hoc fashion is a waste of time and effort.

Winning a government tender rests on a few elements; one of them is the proposal, and we discuss how to write a tender bid here. (We’ll be speaking about the other elements, such as qualifying your leads, in other posts.)

What does the client want to see?

Here’s a little insider knowledge for you. Putting out a tender is a job that no one enjoys. It’s a time-consuming process for government departments (and for businesses who may occasionally issue tenders).

This insight can work to your benefit if you show clearly in your tender proposal that you understand what the client needs. It sounds simple, but few companies competing for government tenders do this, relying instead on populating free tender templates and speaking about themselves rather than highlighting how you can help the buyer with their requirement.

You’ll seldom find all the information you need to build this understanding of the buyer’s needs through the tender notice. They’re notoriously cryptic (though TenderScout provides extensive additional information for each notice we serve on our platform, such as highlighting all the documents that need to be completed as part of the proposal and rating the opportunity in line with your own business).

To show that you understand what the buyer is looking for, you need to ask questions to gather the information you need, and the best time to do this is before the tender process begins. Hence our advice earlier that to win government contracts you need to adopt a strategic approach.

Ensuring an even playing field for all prospective suppliers once the tendering process is in play often means that government departments are restricted in what they can tell you. This is why it is so important to meet the relevant buyers and speak to them prior to the tender going live. TenderScout provides users with a list of current active tenders at any one time, as well as information on potential prospects, including details on past tenders and information on when they were won, and who won them, to help business owners build pipelines.

Knowing whether the buyer is issuing the tender because of operational or financial (or other) reasons will change the approach you take, so understanding the buyer’s motivation, and showing that understanding in your bid, is your first step in writing a winning tender proposal.

Mind your language

When you write your proposal, make sure that you use the language the buyer uses. This immediately establishes rapport and highlights you as a supplier that has an understanding of what the buyer is looking for.

Unnecessary jargon is annoying and government procurement officers are able to sift through clichés and exaggerations at speed.

Communicating in your proposal as you would with a live human is what you want to do. It’s important to include case studies that show how your product or services can help the buyer achieve their aims, but do this in a way that seeks to inform rather than impress. Don’t describe every process you have as results-driven, and not everything you do is a paradigm shift compared to the rest of the industry so don’t depict is as such.

Time is of the essence for everyone. Write clearly and concisely in your tender proposal, and ironically, you will impress the buyer.

It’s not over until it’s over

Many SMBs set themselves up for failure by competing for one tender, not winning it, and then doing nothing.

Don’t make this mistake. You’re legally entitled to feedback on your tender proposal and to find out why you scored lower than the winning proposal.

This information is gold dust!

Actively ask the buyer for it. Not only does this provide you with a further opportunity to speak to the buyer and build the relationship, which stands you in good stead when they tender again, you will also receive first hand information on how to improve your tender proposal.

Then, use this information. Again, you’ll be surprised at how many SMEs don’t and submit a second tender proposal for an opportunity that looks exactly the same as their first. Another waste of time and effort.

We help businesses win more government contracts. Our method is exactly as we outline here, and businesses that work with us and follow our advice increase their winning rate to 70% within three tender proposals.

If you’re interested in how your business could gain a slice of the government tender pie, please feel free to contact us. We’d be delighted to hear from you and help you win tenders.

 



Boost your revenue with government contracts

Generating revenue is a constant preoccupation for small and medium sized businesses (SMBs). For those that have a sales strategy, keeping a pipeline filled with qualified leads that are likely to close is an uphill battle. Yet, every year, the vast majority of SMBs are ignoring over 100,000 contracting opportunities that could help to revolutionise their bottom lines.

Too many SMBs are stuck on B2B selling

Most SMBs rely on other businesses for the majority (over 70%) of their revenue. When I started my first company, I relied heavily on just a couple of contracts for my entire cash flow. And even then, the cash didn’t exactly flow – as a supplier, you’re often at the whim of buyers when it comes to getting paid on time. Quoting non-compliance with Directive 2000/35/EC of the European Parliament on late payments isn’t likely to speed up the process, and is more likely to reduce your chances of getting another contract!

Nowadays, buyers are very well informed about what it is they’re buying, how much they should be paying and what kind of service they can expect. They have plenty of choice when it comes to selecting a supplier and are increasingly more comfortable with a ‘panel’ of suppliers rather than relying on just one or two companies.

What’s wrong with this picture?

My own experience, working with several hundred SMBs, is that most don’t even have a sales and marketing strategy. ‘Sales’ generally consists of fielding referrals and keeping existing clients happy enough that they’ll give the company more business.

This type of selling is expensive – it requires businesses to be extremely flexible when it comes to different client demands. Some clients will want marketing brochures, some will want workshops or demos and others will want full-blown proposals. They’ll all be at different stages of their buying cycle; and they may simply be educating themselves without having any particular buying need.

Governments spend billions every year on equipment to maintain roads, research reports, office stationery, landscaping and thousands of other goods and services. In the private sector, where most SMBs do their business, there’s an opportunity missed every time the government goes to the market.

Government contracts = qualified sales leads

The great majority of SMBs treat government contracts with disdain, because participation can be expensive or require specialised skills. But there is a huge upside for SMBs here – all government contracts follow a standardised process. It’s not perfect by any means, but it’s got a beginning, middle and an end; the rules of engagement and how the contract is to be awarded are clear. And government organisations tend to pay on time too!

SMBs that learn how to incorporate competing for government contracts into their overall sales process have a massive opportunity to grow their business through consistent and cost effective sales activities.

In my next article, I’ll look at ways to create a pipeline of such opportunities through a process of finding, evaluating and selecting the right tenders for your business.

HSE faces EU fines over procurement

At the weekend, the Independent published a story about HSE recruitment: HSE facing huge EU fines over tender delays

The taxpayer could face huge EU fines because of the failure of the Health Service Executive (HSE) to issue new tenders for agencies to provide doctors and nurses across the country.

In recent years, procurement competitions involving healthcare personnel have been subject to significant challenges, the recent High Court action brought by healthcare providers being just another example. One of the reasons for this may be that when dealing with outsourcing of specialised services, it is difficult to award contracts where much of the criteria relates to subjective judgement around the quality of personnel and support processes.

Nonetheless, it is unacceptable – given the level of support available to buyers from organisations such as the Office of Government Procurement – that procedural issues remain in the effective administration of contracts.

Ultimately, the issue is one of transparency. The public procurement rules are clear as to how public contracts are advertised, awarded and administered. Any deviation from these rules must call into question the framework and suggests that those responsible don’t actually care whether they are following the rules or not. If this is the case, it’s very disappointing – especially given all the effort the Government, the Office of Government Procurement and bodies such as Intertrade Ireland have been expending in encouraging suppliers to participate in public competitions.

A Procurement Ombudsman has been mooted several times in the recent past. The idea is that an ombudsman would keep public servants on the right side of EU and national legislation, but sadly there’s no sign of that happening soon. It is more than a shame that the HSE, charged with administering health services, has failed to administer its own contracts, with the net impact being fewer resources available to deliver health services in Ireland.

SMEs: how to win more competitive sales opportunities

Government awards nearly a quarter of all public contracts to mid-market businesses. These tenders represent an exceptional opportunity for companies of all sizes to build new revenue streams. The sentiment towards small and medium business and increasing participation in public sector tendering hasn’t been this high in years, but for companies who want to get involved, where do you start?

Here are our top five tips for mid-market companies looking to compete:

1: Find and select the right opportunities

Most countries have a free source of tender alerts. In Ireland, etenders.gov.ie is the best source of ‘national’ tenders (anything up to €200,000), while ted.europa.eu is the go-to resource for higher value tenders across Europe. In the US, fbo.gov is where most opportunities end up.

Some companies gather opportunities from a variety of sources, so rather than signing up to lots of different ones, you can choose one and cut down on the time spent searching for opportunities. Most require an annual subscription, but might also have a free version so that you can try it out.

There are literally thousands of ways for buyers to categorise goods and services, so you need to make sure you are filtering search results in the right way – covering all the goods and services you are able to deliver. The best tender alert tools incorporate specific tools that help you to filter opportunities by categories, keywords and geographies. Be as specific as you can to avoid wasting time sifting through inappropriate tenders.

2: Assess the landscape objectively

Before deciding whether or not to compete, you need to make an objective assessment of the buyer, your competitors, the tender and your own ability to deliver. Winners will typically invest a minimum of 3% of the contract value on their proposal. If you’re not investing that much yourself, then you’re going to struggle to succeed.

Look at the buyer’s procurement history and who they have previously bought from. Incumbent suppliers do have an advantage, but the data shows that they lose contracts far more often than they retain them.

Read the request for tender carefully and asses how well you meet the criteria, whether you have the relevant experience required and how well suited your team are to delivering the services requested. Only compete where you believe that you will score highly (>80%) against the evaluation criteria.

3: Partner with other suppliers to be successful

Your chances of success are vastly improved if you can partner with other suppliers, and in some cases where there are minimum requirements (e.g. turnover) will be the only way you can compete. The Irish Competition Authority has published a guide for SMEs looking to form partnerships for competitive bidding, entitled How to comply with competition law when tendering as part of a consortium. In the US, the FBO provides information about Vendor Collaboration on their website.

Collaborating with other suppliers can increase your credibility, your overall team expertise, and gives you increased chances to be successful. It can help you to achieve the economies of scale that larger organisations are often able to deliver. If you have had limited success in the past, partner with companies who have demonstrated their ability through previous tender successes.

4: Build your network and strengthen your relationships

For the best chances of success, find out about opportunities before they are even published! Many tender opportunities arise from expiring contracts and so can be predicted. Oftentimes, simply asking buyers what their plans are is the best course of action. Your challenge is to be known to the buyer before the tender is published – people buy from people!

Establish a strategy to pipeline future opportunities before they arise. Keep a calendar and source information about procurement opportunities from as many sources you can: previous tenders, newspaper articles, trade magazines, networking events, the grapevine… Start nurturing relationships with the right people and plan ahead so that you are in a strong position to compete when the time comes.

5: Win Government business by not tendering!

For public contracts below a certain value (€25,000 in Europe) there is no requirement on the buyer to ‘tender’ for the business. At least half of all government spending is below this threshold and represents an ideal opportunity for smaller businesses to get a foot on the ladder without the effort associated with responding to a formal tender.

Typically, three quotes will be sought in these cases so the most important thing is to be known to the buyer. Buyers will rely on their network of contacts to solicit quotes so it’s essential that establish your credentials with buyers and put yourself in a position to be offered the opportunity to quote.

Alan Kelly faces questions in row over a state tender

The Minister for the Environment Alan Kelly has come under scrutiny and has “serious questions to answer” according to Anti-Austerity Alliance TD Paul Murphy, over his meeting last December with Labour TD Brendan Ryan and Task Community Care, a company that was the successful bidder in a state tender.

Claims of “serious irregularities”

It has been suggested that minister Kelly may have violated the rules over state procurement in Ireland. The tender in question is related to the Seniors Alert Scheme, which arranged for the provision of alarm systems to elderly people throughout the country. The meeting took place only days after the deadline for tenders had ended, and before the evaluation process had been completed.

The tender process was temporarily suspended two days after the meeting took place between Kelly and Ryan. According to the department, this pause was put in place to ensure that the meeting did not affect the procurement process. The process was found to be compliant with national and EU guidelines and regulations, and was subsequently resumed – with state agency Pobal choosing Task as the successful bidder.

Lack of consistency

With a tender process that was likely to have had over 40 respondents – spending upwards of €200k in competing for this contract – it’s crucial that companies can believe there is a level playing field. While it’s possible that no problematic conversation about the tender took place (as has been maintained by the department) the companies who compete in these processes, and whose business is impacted by these decisions, deserve to have the rules applied fairly and consistently. Quite simply, this is a meeting that should have never taken place.

An Ombudsman needed to ensure transparent arbitration

This is yet another argument for a procurement Ombudsman to be set up, a point I highlighted in the TenderScout Annual Report earlier this year. I laid out the case that a procurement Ombudsman is needed to ensure transparent arbitration.  Transparency is the single biggest issue impacting on confidence in the procurement process, and ensuring a fair system which does not find itself open to scrutiny when a company feels it has been wrongly passed over for a particular contract. I went on further to recommend that the Ombudsman should have the power to arbitrate in disputes and ensure that both the spirit and the letter of procurement guidelines are upheld.

The best outcome for transparency

In the case of this tender, it’s clear to me that the process should have been scrapped, and then run again under the same terms and conditions. This wouldn’t have resulted in any major additional work for SMEs, as they could largely submit the same documentation. Although there would have been a cost implication to the procurement authority (who would have had to re-evaluate submissions, which is a cost to the tax payer) this would surely have been a better outcome for transparency.

As it is, we have a contract process that’s in dispute, and a case that will only reaffirm the prejudices about public procurement that SMEs already hold. This is an issue the OGP have been struggling to overcome – that public tendering is not transparent. There is no doubt in my mind that the outcome of this latest case will only lead to yet greater mistrust and uncertainty in relation to the process, and as a result there will be less supplier diversity for the government in the future. What’s most frustrating of all is that this whole thing could have been easily avoided!

The new Legal Services procurement landscape

The Legal Services Regulation Bill was introduced in October 2011 by Alan Shatter, a draft which has received objections from the Bar Council & Law Society, but is now likely to finally be enacted by Christmas.

The Irish Government spends some €0.5 billion annually on legal services, the majority of which has not previously been put out to competitive tender. There is a strongly held view, going back to the Competition Authority’s 2006 report, that lack of competition in this sector means that the cost of legal services in Ireland is amongst the highest in the developed world. Many contracts are allocated on the basis of administrative convenience, where the incumbent provider of such services is familiar with the needs of the public body.

In 2011, the troika requested that a Legal Services Regulation Bill be put in place – increasing the transparency around legal fees with the aim of eliminating barriers and improving buyer understanding of what is being paid for and if it represents good value. But are the changes made to the Legal Services Bill going to meaningfully reduce the cost of legal services? Legal services lobbyists have been able to convince the government to row back on some of the financial elements of the bill that would have impacted them unfavourably.

The OGP and the new frameworks

The Office of Government Procurement is at the forefront of building frameworks for the purchasing of goods and services for government bodies, and the legal sector is in their cross-hairs. In briefing sessions held earlier this year, prior to establishing up to eight separate Legal Frameworks to provide goods and services to various government bodies, it was mooted that future procurement of legal services would acknowledge different tiers of legal service complexity. This would allow the larger, more diverse firms to deal with the most complex issues, while smaller firms – which account for the vast majority of practices – would benefit from simpler tender processes for less complex issues.

These Frameworks are now being rolled out (the first one was for Local Authorities and the most recent one for Legal Services to Public Sector Bodies (excluding Central Government Departments)).

Advantages and disadvantages

The tender to establish a number of multi-supplier Framework Agreements to provide Legal Services to Local Government sees local authorities divided into regions – the theory being that there would be nine firms to take charge of the northwest region of Sligo and Mayo, 10 in Cork and another 10 in Dublin. But in reality a large Dublin firm isn’t excluded from competing for opportunities in Sligo or Cork; so there’s no particular advantage to a firm in Sligo being locally situated, and smaller firms are also less likely to be successful in their attempt to bid for the tender as they have fewer resources to invest in competing. The upshot is that smaller firms, particularly those that don’t form consortiums,  are going to be squeezed out of he public procurement scene.

A major flaw in the public procurement contracts are structured lies in the way it has tiered services based on their complexity. While this would appear to be a logical way to structure the services supplied, there is no qualitative mechanism within the tender to evaluate this complexity. There is a real danger that tender submissions will be evaluated subjectively, particularly if there is an intention of ensuring firms of varying size are represented on the frameworks.

The costs of bidding

Over 100 suppliers can be selected to each of these frameworks, although in reality the figure will be lower. Tenders of this scale are likely to attract several hundred bidders. With the average cost of responding to a tender at around €5,000, up to €10Million is likely to be spent by law around the country – competing for contracts where it is not clear that the selection criteria is sufficiently robust and quantitative.

One major feature of the new Legal Services Bill is that it provides limited type company structures for law firms. In the past, the unlimited liability that legal firms were subject to was a major obstacle to collaboration amongst smaller firms. With frameworks like this now becoming the norm, smaller firms will have to collaborate more and re-invent the way they work using the new provisions put in place. Even the largest Irish firms are small by international standards, and if they are going to compete on a larger scale and compete internationally, then it would be in their best interests to build relationships with other firms.

The challenge for smaller firms

A great deal of money is going to be spent competing for tenders which are likely to be evaluated subjectively, and to the detriment of both smaller suppliers and the diversity of service delivery within public procurement.

This is a wake-up call for smaller legal firms to take advantage of the Legal Services Bill and to start building consortia and new legal company structures, painful as that may be. Unfortunately, this raft of frameworks is coming at the same time as the Legal Services Bill. If these companies can survive – and dedicate the next four years to developing such structures – then they will be in a far better position to compete in 2020.

How looking at different buying signals could boost your sales opportunities

I’ve arrived at Dreamforce 15 in San Francisco for a week of innovation, fun, giving back and learning about the latest trends in sales and marketing automation. As I walk around, I’m struck by the number of firms with really cool technologies that turn customer engagement into real sales. One thing that’s noticeably absent (although it’s a big conference, I may not have found it yet) are solutions that specifically address competitive selling – where the buyer isn’t looking to engage with you and, worse, is forcing you to sell through a process with a proposal at the end!

Marketing automation technology, such as Marketo or Hubspot, provides a valuable link between a company’s marketing collateral and its sales systems (e.g. Customer Relationship Management systems).  A core feature of these solutions is lead generation and qualification. They often rely on social buying signals – for example, qualifying a lead based on the fact that they have downloaded your white paper.

But such social buying signals cannot reliably predict outcomes in competitive sales, so businesses relying on such tactics are missing out on opportunities. Competitive sales is characterised by a Request for Tender (RFT) from a buyer. Most government contracting (worth 18% of global GDP) and an increasing percentage of B2B business is carried out this way.

Many SMBs never participate in a competitive sales process or, worse, invest in opportunities with a low probability of closing. Low SMB participation in competitive sales is due to two factors:

The first issue is SMBs believing they don’t have any chance of winning a competitive contract. The reality is that recent policy initiatives mean that more SMBs are being awarded contracts – by law, 23% of US government contracts go to SMBs (amounting to $83.1 Billion in 2014) and in Europe, 56% of contracts are awarded to SMBs (with a total worth of €123 Billion in 2011).

The second issue is SMBs failing to identify opportunities they have a good change of closing because they aren’t using competitive buying signals. Governments are precluded from awarding contracts on the basis of tenure, past relationships or because they like your marketing material – they make decisions to buy on the basis of formally submitted proposals.  In TenderScout research, we found that as buyers become more professional, just 1 in 4 contracts were retained by incumbents! Past performance is no longer a guarantee of future success.

Competitive buying signals are a different category of buying signal that offer the potential for more accurate lead qualification and predictions of success. For example, it’s much more valuable to know that the contract has been with the same supplier for 15 years, than the fact that somebody in the buyer’s organisation recently downloaded your white paper. Sales and marketing automation can make buyers aware of your business and solutions, which may increase your chances of being offered a chance to pitch. However, government and many B2B buyers, are unmoved by marketing collateral or invitations to webinars.

So, how can you add intelligence to your competitive selling? Many technologies, like GovWin IQ, collate government leads, while analysis tools can semi-automatically qualify them based on how well they fit both your ‘sweet spots’ and how likely you are to beat the competition. Signals such as how often a new supplier wins a contract with a particular buyer, what price was paid the last time this contract was put up, or who is already supplying this buyer are all available either through research or through market intelligence technology. The intelligence collated from competitive buying signals can be stored and used to create a track record of buyer and competitor behaviour – which can in turn help to predict future outcomes.

My view is that sales teams should be spending every minute of every day closing deals.  Generating and qualifying leads is time-consuming, subjective and challenging for many SMBs. But strategic use of technology based on competitive buying signals can deliver actionable, qualified sales opportunities and insights. Instead of guessing who MIGHT buy from you, you’ll know who WILL buy and what it will take to close the sale.

SMBs that can build competitive sales intelligence into their process are giving themselves a better way to score leads and a more comprehensive understanding of the competitive landscape – they’re going to win more business. As I look around Dreamforce, I see great solutions from SalesPredict, Velocify, Radius, insidesales.com and Lattice which can help, although I haven’t found that silver bullet just yet. There are hundreds of potential solutions at Dreamforce though, not least SalesforceIQ, just released yesterday, so the search goes on.

If anybody reading this knows of any great solutions for competitive sales, I’d love to hear from you!

To OJEU or not to OJEU – that is the question

A challenge for buyers running a public procurement process is to accurately estimate the required budget for whatever is being procured. Estimating the cost of goods is one thing; estimating that of services and technologies (especially emerging or innovative technologies) is another matter altogether.

The buyer must ensure that there will be enough money in the budget to cover the total cost of the winning tender. What then does the buyer indicate to the market when initiating the tendering process?

Few tenders explicitly indicate the value of the services being procured. Buyers believe that where the buyer’s budget estimate is high, releasing this information could encourage suppliers to increase their prices. However, there’s very little evidence to support this theory. Suppliers in a genuinely competitive process will compete on cost regardless, especially if there’s a substantial weighting on cost in the evaluation criteria. There is no reason to assume that they will see an indicated value as a minimum price. On the contrary, they are just as likely to undershoot as to exceed such a guide price (so long as the procurement is a genuinely competitive process).

The advantage of using a guide price is that it indicates the scale of the solution required by the buyer. However, the buyer must be confident in their budgeting process, and trust the competitive nature of the process to ensure that they get value for money.

There is always the potential for error. If the responding suppliers’ prices exceed an indicated contract value, then obviously the budget will not cover the cost of the contract. The buyer is forced to either go back to their organisation and seek a budget increase, or to cancel the procurement altogether – which can be embarrassing for both the buying team and the organisation. For this reason, and being naturally risk averse, public servants rarely indicate the value of the contract.

Even without a stated contract value, there are still some clues for the supplier as to the potential value of a contract. EU countries stipulate that contracts above a certain minimum value (for example: €50,000) must be hosted on a national or regional procurement website. So, if a contract notice is posted on such a website, interested suppliers know that the budget for the contract is above that minimum.

Furthermore, the EU has thresholds above which contracts must be advertised on the EU procurement site TED – Tenders Electronic Daily. TED is the online version of the Supplement to the Official Journal of the EU (or OJEU), dedicated to European public procurement. The EU threshold for services is currently €134,000. If a tender for services is expected to be worth more than this value, then the tender notice (called an OJEU notice) is hosted on the TED site. If the value of the tender is expected to be below that value, then the tender notice (usually termed a non-OJEU notice) is hosted on the relevant national or regional procurement website.

Whether the tender notice is OJEU or non-OJEU can be a broad, though useful, price indicator for potential suppliers. For example, if a supplier sees a non-OJEU notice, but believes that the service cannot be delivered for less than €134,000, they will usually no-bid; i.e. decide not to respond to the tender, thereby concentrating their sales efforts on more commercial opportunities.

Buyers with budgets close to, but below, the threshold should consider issuing an OJEU notice rather than a non-OJEU notice, for the following two reasons:

  1. the best responses they receive may come in over the threshold
  2. a non-OJEU notice may put off suppliers who may (rightly) believe that the service cannot be provided at a cost below the threshold

Even though, mathematically speaking, an EU procurement threshold is just a single value along a large range of potential values, it still raises many issues that need to be carefully considered by both the buyer and potential suppliers in a procurement process.

Gifts, inducements and rewards: what is going on in hospital procurement?

Last night’s Prime Time (RTÉ One) investigation into corruption in hospital procurement is another blow to public perception of the procurement process and has the potential to undo much of the good work that has recently been done by the government to restore confidence in the system.

The programme looked at the cosy relationship between the Sales Director and owner of family-run, Dublin-based Eurosurgical Ltd and senior hospital staff, one where trips to Florida and Portugal, televisions and shopping vouchers are alleged to have been used as inducements to circumvent existing contracts and procurement legislation.

Interviewed for the programme, Justin Carthy, CEO of the Irish Medical and Surgical Trade Association (IMSTA), said:

He also described some of the revelations from the programme as “bizarre and unbelievable.”

And it seems that the favours go both ways. The programme showed emails in which a Contracts Manager at St Vincent’s shared commercially sensitive information with Eurosurgical – in this case a breakdown of sales to the hospital by a competitor, John Bannon Ltd – disclosure which John Bannon describes as, “a very serious threat to our business.”

John Devitt, of Transparency International, Ireland, said:

In TenderScout’s 2015 Irish Procurement Survey, we found that 26% of SMEs intended to compete more than in previous years. This positive sign was as direct result of SME-friendly directives from the Department of Public Expenditure & Reform, combined with initiatives such as the Tender Advisory Service from the Office of Government Procurement, aimed at enabling SMEs to compete on equal terms.

The question that SMEs will be asking themselves today is how widespread practices of favouring particular suppliers, ignoring value for money propositions or willful non-compliance with EU and National procurement directives actually are. We were shown an example in last night’s programme of a buyer placing an order worth €7,000 with Eurosurgical, even though their price was ten times higher than that of the existing supplier.

Although the two hospitals mentioned in the programme are not run by the HSE, it is no stranger to allegations of irregularities itself. Last September, the Comptroller and Auditor General published a fairly damning report on procurement in the HSE. Compounding a lack of transparency and general under-reporting was the striking revelation that – in a sample of procurement competitions – 36% of the transactions audited were found to be non-compliant with procurement rules.

In the past five years, TenderScout has worked with SMEs on around 500 procurement competitions. While the tendency is to blame ‘the system’, in reality, most SMEs are unaware of how high the standard of competition is and are reluctant to make the level of investment necessary in their own sales process to be successful.

The variance in quality between Requests for Tenders (RFTs) remains high, although the OGP have established a degree of standardisation in recent years.  It seems that while the policy makers have done their part, there is very little policing of the process ‘in the wild’.

When TenderScout first launched its sales intelligence platform in 2013, it analysed all Irish public sector data as far back as 2003 and noted that for 80% of RFTs, buyers never informed the general public of the outcome. Although the OGP issued a directive in April 2014, mandating that all RFTs should have a corresponding award notice, this has largely been ignored by public sector buyers.

One of the most common uses of our TenderScout platform is to assess the transparency of a buyer. SMEs decide whether it’s worth their while competing for an opportunity by evaluating the buyers’ general compliance with procurement processes – using measures such as the percentage of contract award notices that they’ve published as an indicator as to how transparent they are.

Prime Time’s investigation is welcome in that it exposes unsavoury practices going back many years. While this doesn’t reflect the diligence of most public sector workers, it does undermine the progress that has recently been made. It is shocking that no official investigation has so far been carried out into the information provided by the Eurosurgical whistleblower.

Many small firms that previously indicated they were going to tender more frequently are now going to stay away – the result is lost innovation, competition and value for money to the public sector.

More policing of the procurement process is crucial. We should start with random audits and a Whistleblower’s Charter. The cost of mounting a legal challenge is a huge barrier, as is the total lack of transparency about the review process. We will never encourage more SMEs to tender while the entire process remains shrouded in secrecy. There should be a penalty for buyers that don’t comply with policy, starting with those that don’t publish award notices within three months of a contract award.

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