Research Paper: What are Commissioners looking for when procuring services?

What are Commissioners looking for when procuring services?

The principle of commissioning services to Voluntary and Community Organisations (VCOs) is central to the government’s agenda for ‘modernising local government, devolving power and significantly strengthening local government’s leadership role in local areas’ as indicated in last year’s White Paper. This also recognises the importance of the relationship that local Government has with the third sector. The introduction of local Compacts further compounds the obligation that local government has to communicate with, engage and consult VCOs in local decision making and delivering public services.

A significant part of the government’s modernisation plans involve a move from the ‘traditional’ grant funding to contracting out services to local VCOs in accordance with Local Area Agreements and locally agreed service specifications. It has acknowledged that the third sector can, do and have been providing high quality services to the community at lower cost than public sector bodies. Under the new approach, services will be advertised and invitations to tender will be offered. VCOs can then submit tenders or expressions of interest to deliver those services if, in doing so, they are legally achieving the objects of the organisation in accordance with their governing document . Although the process and administrative procedures, up to this point, are not significantly variant from the normal grants process, there are differences, implications and intrinsic fears surrounding the concept of tendering and procurement.

Research shows that the concerns that the third sector has about contracting with public bodies are, amongst others,

• the loss of control over the project or service that they are to deliver because they will be designed by commissioners rather than the VCO themselves, and secondly
• the implication or inference of heightened bureaucracy and stringent monitoring that may be involved with contract working in order for VCOs to demonstrate that they have the necessary infrastructure to delivery quality services.

The objective for this paper is to identify the gaps and barriers that groups face when considering tendering for public services with a view to providing support packages that will better equip and dispel some of the fears surrounding commissioning, enabling more groups to feel more confident about entering into the process. For obvious reasons, the criteria set when each contract goes out to tender, will differ from contract to contract, depending on the particular commissioner, their specific priorities and the service to be delivered and the requirements should be proportional to the value of the contract being offered.

In their current move from grants to commissioning the London Borough of Newham published guidelines, as part of their consultation paper on the process, on the ‘Proposed Eligibility Criteria’ for VCOs that are considering tendering. These criteria are categorised into two specifications; low to medium cost projects and medium to high cost projects:

For all organisations wishing to submit to the commissioning programme for any level of funding, the following must be in place:

• Equal Opportunities Policy and Procedure (inclusive of recruitment procedure)
• Health & Safety Policy
• Child & Vulnerable Adults Protection Policy & Procedure - A Criminal Record Bureau Check will be expected for those staff and volunteers working with any vulnerable category of client.

Organisations must also have the following in place to satisfy the Council that they have the capacity to deliver the proposed project.

• Constitution /Memorandum and Articles
• Annual Accounts
• Clearly defined roles and responsibilities for those delivering the project.
• Workplan which demonstrates a risk assessment and milestones to be achieved.
• An organisational structure chart showing how staff or project managers are accountable to Trustees.
• Records from AGM, (Minutes and Attendance List).

Organisations wishing to submit to the commissioning programme for the delivery of a medium to high cost project, in addition to all the above criteria, must have the following in place to satisfy the Council that they have the capacity to deliver the proposed project.

• Procedure in place to review all policies and procedures
• An organisational development or business plan
• Records of all staff /volunteers/trustees in the company/organisation
• Company/organisation registered with Companies’ House and/or Charities Commission where appropriate.
• Procedures to address the training needs of volunteers, trustees and staff
• Accreditation under a nationally recognised quality standard system (or working towards)
• List of the full names of any professional associations or guarantee schemes of which the company/organisation is a member. Where appropriate please indicate the maximum value of any one contract covered by the scheme.

NCVO’s Introductory Pack on Funding and Finance: Guide to Procurement and Contracting is aimed at VCOs, to help them in preparing for contract working and, although it focuses more on the concerns and benefits for the VCOs rather than the criteria that the commissioner may have, it also includes some more general advice on what Public Service Organisations might look for when they assess tenders. These include:

• Value for money
• Affordability and sustainability
• Efficiency
• Community Benefits

GuideStar is a new online service that has been developed in response to feedback from local government organisations who need access to detailed charity information and it is anticipated that this will be a resource for government organisations to look at information on registered charities that have submitted tenders to deliver public services. Unfortunately, it focuses solely on registered charities. GuideStar have developed a Charity Checklist that both charities and government organisations can access; charities to amend and government organisations to access information. The information included in the form is:

• Registered charity number
• Registered company number
• Governing Document
• Legal Status
• Trustees/Board members
• Procedures for election of council/board members
• Short description of activities
• Charitable objects
• Legal charitable objects
• Activity classification
• Services provided
• Beneficiary types
• Number of beneficiaries
• Performance information
• Public liabilities certificates
• Employer’s liability compulsory insurance
• Professional indemnity insurance
• Structure and governance
• Reserves
• Equal opportunities policy
• Staff recruitment
• Staff and volunteer information
• Employee handbook
• Health and safety policy
• Complaints issue resolution
• Confidentiality
• Child protection
• Criminal records bureau check
• Data protection
• Environmental
• Ethical policy
• Investors in people
• ISO 9000:2000
• External Quality Management Systems
• Exit Strategies and contingency plans
• Monitoring and feedback policy

This list does not necessarily suggest that all of these should be in place but it does give an indication of the areas public service organisations may want more information about when assessing tenders. It is clear that the methods towards which commissioners are leaning, in safeguarding the delivery of the services that they procure, have similarities to the methods by which quality assurance systems such as PQASSO and IIP ensure that there is evidence to support the requirements for each of the standards. This may, therefore, imply that groups that have already put in place a quality assurance system may be in a better position to demonstrate their ability to deliver quality services when tendering. In simplifying the criteria under which VCOs can realistically tender, commissioners and sector support agencies have produced lists of suggested evidence that they may use to determine the suitability of the VCO for the contract. Whilst this may be helpful for groups to work on areas in which they may lack structure or accountability, it may be misleading if VCOs view the attainment of the requirements detailed by the commissioner as an assurance of winning the contract as opposed to simply making them eligible to compete. It may also be misleading in that groups may assume that meeting the requirements of the commissioner guarantees that they can deliver the service successfully. This is seldom thecase. When tendering for services, VCOs need to carefully consider, not only the requirements of the commissioners, but also the implications of preparing tenders, winning contracts and delivering quality public services, on the organisation. This can be a lengthy and expensive process so VCOs, particularly smaller groups, need to decide whether taking part in this process is viable both in terms of the money they will spend and potentially acquire and also in terms of staff time, resources and the effect that it may have on their core service delivery.

NCVO’s guide gives advice on how VCOs can prepare for and write tenders and includes checklists on what should done in preparation and what the implications of contracting with statutory bodies may be. It includes advice on each of the following:

• Identifying and approaching commissioners
• Marketing the service
• Meeting the commissioner
• Deciding whether to bid
• Building a case
• Legal and technical matters
• Preparing a tender

The ‘Charities and Public Service Delivery’ guide, published by the Charity Commission also concentrates more on the implications on groups thinking about tendering rather than the requirements of the commissioners. It includes advice on the following:

• Understanding the risks
• The legal framework
• Sticking to your mission
• Guarding your independence
• Full Cost Recovery

Information from VCOs that have successfully tendered for contracts already also indicates that it is not just a case of ticking commissioners boxes, it is equally important to ensure that an organisation is ready to go through the process. According to groups who have already gone through the process, organizations thinking about tendering should

• be well staffed to be able to go after whatever the opportunity is
• believe in what it is that they’re tendering for, not just the contract but the actual service
• build good networks
• build credibility, be available whenever needed
• follow the tender process exactly, don’t think that there’s anything you don’t need to do
• communicate well within the organisation, between departments
• make sure everyone knows what the service is and what’s good about it and get all the staff on board
• Be well-resourced
• work out what time it will take for each department to do their bit for the tender
• have the tender proof read by someone independent
• allow time for changes to be made

These more less formal, internal criteria are heavily reliant on the organisation’s staff, volunteer and management committee’s efficiency and commitment to both the organisation as a whole as well as the contract itself. It is highly likely that these unimposed criteria will be met partly as a result of the more rigid requirements proposed by the commissioners and partly through additional input from the group.

The information gathered for this paper gives strong indications of what commissioners may be looking for when procuring services, as well as what each VCO should consider and the process they should go through to ensure they are in a good position to tender for and deliver services. From this information, it is possible to determine what the potential gaps may be for groups submitting tenders.

Through community development work carried out by the Community Involvement Unit at Aston Mansfield, the following areas were highlighted by groups for improvement. It is likely that lacking infrastructure in these areas will indicate the potential gaps that will prevent groups from submitting successful tenders. The most common areas of infrastructure that the groups worked with wanted to improve were:

• Financial controls and accounting procedures and fundraising strategies, including exit strategies
• Adequate and up to date staff and volunteer polices and handbooks
• Quality assurance

Followed by:

• Recruitment of management committee members, including induction and appraisal systems, roles and responsibilities and skills audits

Then:

• Recruitment and retention of staff and volunteers, including contracts and task descriptions

   

  • Marketing and PR strategies

  Less common but still important to the groups were:

  • Defining legal status and ensuring the governing document is appropriate,

  up to date and understood

• SWOT and/or PEST analyses

These previously identified areas of improvement in groups’ infrastructure give some indication of the potential gaps that may exist for groups wanting to deliver public services.

More in-depth research and direct consultation with both VCOs and commissioners is needed before a more comprehensive summary of the gaps can be specifically identified and even once this is done, there may well be other, less easily identifiable barriers that groups may face, which local infrastructure organisations should help VCOs to overcome. Through this process, it will be possible to begin to develop support packages for groups to be able to fully prepare and submit tenders.

Amy White, Aston-Mansfield CIU