The first of a two-part series by AsiaPacific Infrastructure Content Partners Caroline Boot and Kerrie McEwen looks at tendering practices and influences.
Part one examines what has been achieved in 2017 and what still needs some work. Part two on 20 November will look at the challenges and expectations for 2018.
It’s been a busy year — more than 1000 opportunities released on GETS across all sectors in New Zealand; the rise of pre-qualification; and a move away from the traditional physical ‘tender box’ by some clients.
Increasing use of GM–RFx templates
Since their introduction in 2016, MBIE’s suite of Government Model RFx Templates have seen plenty of use during 2017 by government agencies.
Even some local councils have adopted them. Easily identified by the heading ‘This opportunity in a nutshell’ near the start, the templates aim to provide practical, easy-to-navigate, plain English templates for routine types of procurement.
We applaud those procurement managers who are taking the time to customise the templates for their specific contract or project. The best examples focus on questions which are targeted and specific, so that suppliers can be evaluated and differentiated according to quality, risk and value-for-money.
On the flip side, we’ve seen some organisations releasing RFx documents to market using these templates with almost no customisation.
The worst offenders have released a mish-mash of confused instructions and irrelevant questions – needing effort on both sides of the procurement table to deal with extra Notices to Tenderers and Clarifications, which adds unnecessary time and cost to bidding.
A definite trend which has continued into this year has been the release of prequalification panel RFPs.
Auckland Transport, the Ministry of Education, Housing NZ, and Wellington City Council among others have been active in this space.
While some panels remain ‘open’ for evaluation over the course of the coming year or longer, others had strict submission deadlines – suppliers needed to quickly understand submission requirements and respond accordingly, or face missing out on future opportunities.
The continued rise of (multiple) H&S prequalification systems
An increasing number of Plan A clients are now requiring suppliers’ Health & Safety systems and practices to be assessed by external parties.
With a number of different prequalification providers available – domestic and international – this can mean extra costs for suppliers to keep up with multiple assessment requirements.
For example, Housing New Zealand’s method for assessing contractor Health and Safety is changing.
Tenders listed on GETS after 1 November 2017 will include a pre-condition which requires respondents to have registered and completed an Impac PREQUAL Health and Safety assessment.
Another example is Auckland Transport, where ISNetworld (ISN) is the provider of the Health and Safety Prequalification system.
Litigation and court cases
In February we saw the country’s largest bribery case conclude and two prison terms handed down. Several months later a supplier won a legal challenge to a council’s tendering processes.
Both are sobering lessons for local authorities to get their processes and their paperwork right – and for tenderers to make sure they’re also playing by the rules.
Continued use of online response platforms
More and more government agencies are now using online ‘portals’ to manage their tenders. There advantages include that they provide a convenient audit trail for recording the submissions received; reduce the chances of a tender getting ‘lost’; eliminate geographic barriers that impact on tender delivery timeframes and costs; and enable streamlined communications with suppliers.
While online submissions reduce costs associated with graphic design and printing of bids, there is a catch for tenderers if they haven’t taken the time to prepare properly and understand what’s required before uploading their response.
Many tenderers will be familiar with RFTs which limit the number of pages in the Non-Price Attributes section of a bid.
In some online portals this goes a step further with very tight restrictions on character count.
At its strictest, we’ve seen a 2000-character limit per question (yes, that’s characters and not words – and we’re already at about 4000 characters so far in this article). In this situation, every word counts.
For bid managers, the time required to distill responses down to essential but compelling content can often be underestimated.
It’s no easy task, and for those that are facing a tight deadline and trying to get on with their day jobs, it’s another hurdle to overcome.
A far better mechanism to get a consistent and sensible level of detail in the responses is for RFTs to give a guideline on the number of pages (or paragraphs) expected in the response. This is more workable and flexible for suppliers to respond to, and achieves a pragmatic result that helps evaluators in comparing responses.
A focus on social outcomes and sustainability
It’s heartening that price is becoming less and less important as the key factor in winning a tender.
Too many government procurements have ended up with false economies through awarding tenders to cheap (and therefore, often poor-quality) suppliers.
There’s a sensible shift towards quality-based attributes and balancing risk and opportunity to deliver true Value for Money. Local and central government clients are also increasingly aware of the need to meet their social obligations.
The recent Auckland Transport Physical Works Supplier Panel ROI is a good example: respondents were asked how they would support AT’s sustainability objectives in future physical works projects.
Reducing greenhouse gas emissions, improving water quality outcomes during construction, valuing Māori, supporting Pasifika development, and supporting local business – all of these featured in AT’s ROI document as areas for respondents to address.
First graduates for the new Procurement qualifications Damien Wood, Development Engineer for Whanganui District Council, and Marion Henton, Senior Planner for Bay of Plenty Regional Council Toi Moana made history when they were the first graduates in the NZ Certificate in Infrastructure.
The Level 6 qualification was previously known as the CPP or NZTA Qualified Evaluator qualification.
The updated version made some important changes – by extending application to all of government procurement; incorporating Government Rules of Sourcing; and focusing on procurement planning. This qualification is now the benchmark for government procurement professionals.
The qualification stands out as being achievable on-the-job for procurement professionals with busy schedules involving practical procurement activities. Because assessment is through mentoring, coaching and working with experienced and qualified procurement assessors, organisations that have candidates working through it gain a double whammy.
The assessment mentoring has been instrumental in leveraging change not only for the individuals who work through the qualification, but also for their colleagues and departments.
Since its introduction in 2016, the uptake from procurement staff engaged in all kinds of infrastructure contexts is growing fast.
At the time of writing, more than 70 people are undertaking assessment, and many more are expected to sign up in the next few months.
About the writers
Caroline Boot and Kerrie McEwen offer insight to all stages of the procurement pipeline – and draw on experience from tendering in over 30 countries, to training tender evaluators in best practice procurement methods.