Understanding Tender Strategies in the Competitive Flexible Procedure: The Procurement Act

team working out their procurement strategy on a whiteboard

The Procurement Act 2023 has been enacted, but public sector buyers and suppliers have a grace period to get used to the changes the Act brings. There are new procurement methods and a tendering process to get used to, along with related best practices that must become second nature.

One of the procurement methods public sector bodies must come to terms with is the Competitive Flexible Procedure (CFP). It’s designed to give contracting authorities more autonomy when it comes to selecting suppliers. It’s also designed to simplify procurement by reducing the time and costs associated with the procedure.

We’re going to take a closer look at the competitive flexible procedure and its benefits for procurement buyers and suppliers.

What is the Competitive Flexible Tender Process?

The CPF is a procurement method that enables buyers to design and manage the process to suit their needs for each contract that is up for grabs. It’s typically a two-stage process that includes pre-qualification and dialogue to find the most suitable bidder, ensuring bid compliance and effective bid strategy development. Negotiation is optional.

Dialogue plays an important role in procurement, as it opens channels for communication and collaboration and allows both parties to go deeper into the contract’s requirements. In this way, criteria can be fine-tuned and alternative solutions explored.

Buyers must follow the rules for refinement.

  • Refinements can only be made if the right is reserved in the contract notice and tender documents.
  • Refinement is only allowed for the selection criteria and weighting of criteria.
  • The tender notice must be republished following refinement (to all existing bidders, not all the way to the beginning of the tender process).

A competitive flexible procedure can also increase the efficiency of operations up and down supply chains, and streamline the procurement cycle, which reduces the admin requirements for contracting authorities and suppliers.

It’s important to note that flexibility does not equal complexity. In fact, contracting authorities are bound to keep the bidding process as simple as possible. Much of this has to do with enabling SMEs to compete in the public sector marketplace. The Government wants to make public procurement more SME-friendly, which means procurement buyers must remove barriers to participation and make it easier to comply with the contract’s requirements.

Benefits of the Competitive Flexible Procedure

The Competitive Flexible Procedure (CFP) provides several benefits to both suppliers and buyers. We’re going to look at three of the top benefits.

Value for money

The ability to collaborate and refine requirements narrows your list of candidates and in so doing increases the competition among those who qualify to submit bids. This can lead to creative and innovative solutions that add value without raising the price, making it essential to create a compelling bid that convinces the buyer of your value and suitability for the project.

As we touched on above, creativity and innovation can have a positive effect on business operations, which saves time, money, and resources (staff who would otherwise be preoccupied with procurement tasks).

Risk mitigation

Communication really is the foundation for good relationships with suppliers, which is so important in procurement because it can affect the process at every level. Risk mitigation, for instance, is often a happy by-product of healthy business relationships.

Communication ensures the specifications are clear and there are no misunderstandings that could lead to dissatisfaction or unease from the supplier’s and buyer’s perspective.

Open communication also helps to identify problem areas (also from both perspectives). The swift resolution of problems before the contract is awarded significantly reduces risk down the line.

Stronger partnerships for a Compelling Bid

It goes back to communication again. You can’t go wrong with open, honest, and regular (without flooding) communication. Knowing which party is responsible for which function, anticipating where support is necessary, and ongoing collaboration are the keys to strong, mutually beneficial relationships between buyers and suppliers. Understanding and aligning with the buyer’s evaluation criteria further strengthens these partnerships.

Prequalification

Prequalification is a great benefit that deserves a section to itself.

One of the most convenient prequalification benefits is the massive time saved because the tender isn’t open to every Tom, Dick, and Harry who thinks they might have a chance.

The supplier pool only contains bidders that genuinely meet the contract’s requirements, so those evaluating tenders don’t have to work through dozens (hundreds?) of proposals. This also makes the process much more efficient than tenders without prequalification.

The knock-on effect generates cost-savings. Already the process is worth the effort.

Prequalifying Evaluation Criteria

The exact criteria will be different for each contract, but generally prequalifying questionnaires include certain elements such as the following:

Financial health

Buyers are risk averse. They must know if suppliers have the financial resources (cash flow) to carry them through the initial stages of the projects. Basically, can they afford to pay for the services and products to kick start their work on the contract. 

Buyers also want to know if suppliers’ financial accounts and overall management are sufficient to carry them right to the end of the project. 

This is important because contracting authorities are answerable for spending the public’s money. They must make decisions judiciously.

Licences

According to national and local policies, many public sector contracts require suppliers to be properly licenced. Suppliers without licences will be disqualified. 

Legal matters

Certain industries, including construction, conduct legal background checks to ensure there aren’t any ongoing, outstanding, or past cases that affect suppliers’ eligibility.

Compliance with national and legal regulations are also legally mandatory. Buyers look for compliance programmes that cover all issues, including due diligence and corruption management.

Health & Safety

Suppliers must comply with health and safety regulations and must be able to prove their compliance with suitable evidence.

Relevant Experience

Ideally, suppliers must have experience on similar projects. Of course, they need to have delivered the project successfully. References or testimonials from past clients can be helpful here. Highlighting your unique selling points is crucial to differentiate yourself from competitors and present a compelling case to the buyer.

Local support

Value added to local communities is essential and one of the best ways to provide support is to use local resources, from employees to equipment manufacturers. 

Delta eSourcing: Your Guide to the Competitive Flexible Procedure

Delta eSourcing is an industry leader in public procurement with the expertise and agility to adapt to the ever-changing procurement landscape. You can rely on our experience to guide you through the CPF, especially on three key points.

  • Understanding CFP Requirements: We provide the latest insights and help you get to grips with the regulations laid out in the new Procurement Act, ensuring your processes adhere to the principles in the Act.
  • Developing a CFP Strategy: There is no such thing as a one-size-fits-all strategy, but our experts ensure each strategy is perfectly designed to help you craft a tailored CFP approach aligned with your specific needs.
  • Effective Implementation: You’ll receive our support and guidance on running a successful CFP process, so you achieve maximum efficiency and optimal results.

Embrace the flexibility and agility offered by the Competitive Flexible Procedure. Partner with Delta eSourcing to navigate the Procurement Act with confidence. Contact us now.

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