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Publication Date: 01-MAR-06 Publication Title: Chartered Management Institute: Checklists: Operations and Quality NOTE: All illustrations and photos have been removed from this article. Introduction This checklist focuses on the process of writing an invitation to tender by detailing what should be included in the invitation document. When purchasing capital plant or equipment, or goods or services, there are various steps that you can take to ensure that a cost-effective solution, matched as far as possible to your particular needs, is reached. Having made sure that your objectives conform to your organisation's overall strategy, that you have developed a business case for using an outside supplier, and you have prepared a detailed specification of requirements, you are then ready to invite suppliers to tender. The nature of the contract--its value, size, whether of a scientific, technical or constructional nature, level of expertise required, quality and so on will determine whether to opt for an open public tender or closed tender from a pre-selected list of preferred suppliers. Most public sector contracts over a certain value have to be advertised as open tenders in the Official Journal of the European Union (OJEU). Various other on-line resources are also available. The advantages of writing an invitation to tender (ITT) are that it clarifies the issues involved ensuring that nothing is left out. An ITT also provides a standard against which to assess the tenders received. National Occupational Standards for Management and Leadership This checklist has relevance to the following standards: E: Using resources, unit 1 Definition
for example. It should not be seen as a one-off event. Scope the Overall ITT Process It is important at the outset to scope the overall process of inviting potential suppliers to put in a proposal for goods and services. Set the scene This summarises the purpose and content of the document and defines the objectives. Explain whether there is an intermediate stage where you will expect an . Make it clear whether it is an open or closed tender. A search on the Internet for "invitation to tender" brings up many real. should respond with a formal proposal. The conditions attached to a response should be stated. if they wish to respond to the invitation. The minimum would include market awareness of where the organisation is now and where it plans to be in the future. for example. and acceptable methods for delivery of the tender. you will probably stipulate that suppliers should keep the ITT document confidential and should not pass on any costs incurred in replying to it. and how the new suppliers will fit into the overall strategy to drive the organisation forward.An invitation to tender (ITT) is a formal document that asks potential suppliers to demonstrate that they can meet your specific requirements. what the internal processes are that will get the business to where it is going. detailed specifications. Enclose a label and request that the envelope containing the quote does not identify the supplier. 1. Each supplier. but as part of a coherent business strategy that starts with developing a business case for bringing in outside suppliers that fits with the organisation's overall strategy. courier or registered post. by hand. Action checklist When drafting the ITT ensure that the following points are included. Give clear instructions about deadlines. This first step helps to ensure that the end of the process--integrating the new supplier into the organisation's operations--is as effective as possible and achieves the intended outcomes.
it may be better to save the price for the tender submission. Provide organisation overview and background information To give the suppliers a perspective on your organisation. your concept may be insufficiently developed so you may value an indication from the prospective supplier as to how they would approach the issues listed. If the competitive process is in two stages which later involves a formal tender. Suppliers will not want their unique ideas to be used in the invitation to tender. This stage is sometimes employed to assist in defining a shortlist of suppliers and can be useful in further defining your needs. Suppliers need to convince you of their ability to deliver their requirements-this is of utmost importance at this stage. This section may also give additional. Indicate whether you require prospective suppliers to show how they would approach your requirements. that may have triggered the need for the project. should be included. more specific information such as physical / environmental considerations or constraints. and longer . mentioning factors that would be considered. Explain the organisational culture as far as possible. Details of any recent activities. Explain whether you are asking for prices at the Expression of Interest stage. Do not expect a prospective supplier to present all their key competitive advantages. Expression of interest rules Explain whether the Expression of Interest is a simple credentialing exercise or do you expect more. At all times you can expect prospective suppliers to communicate with the assessment panel to ensure that they do not produce a non-conforming submission. At this stage. a description of its mission and activities should be included here. such as a merger or acquisition. 2.'Expression of Interest' (EOI) to be received. Information received from the Expression of Interest could be used by you to help prepare the tender document. 3.
components must conform to national or international standards. 5. are often phased over several years * training--for example. in the use of any complex equipment * maintenance--for example. quality and reliability--for example. 4.term objectives. The number of present and future users should be estimated in order for suppliers to provide quotes on any necessary licences. An invitation to visit the site should be extended where appropriate. You must make clear what is essential and what is desirable. will there be an increase or decrease in the usage of the capital equipment? Equally. for other requirements. large construction projects. indicate how the organisation's needs are likely to change over the period of the project. The evaluation process will be much more difficult if you allow the tenderers to assume your needs. of buildings or equipment. List the main applications or functions required More detailed or technical requirements should be placed in the statement of requirements in an appendix. including a corporate video can also be enclosed. Estimate the size of the project If it is an IT project. the amount of traffic or usage that the package will have to cope with should be estimated and future growth predicted. The latest annual report and/or promotional literature. for example. Specific requirements should cover: * the package itself--what is the outcome required from the supplier(s) * delivery--whether phased or not. Think about long term requirements. . or keeping a service up-to-date * performance.
Set time scales This section should include the following elements: * issue of ITT (and return date) * clarification of any 'expression of interest' stages with key milestones defined * clarification discussions with short-listed suppliers * presentations by short-listed suppliers on how they can meet your requirements * evaluation of responses * final negotiations * final presentation from preferred supplier to senior management * contract awarded.The statement of functional requirements should be the result of agreement between users on their detailed needs. It should take the form of a numbered list for ease of comparison between suppliers and should not invite subjective evaluations or assertions. An indication of the time allowed by the organisation to each supplier to discuss the ITT and their response should be included. All suppliers should be given an opportunity to ask for clarification of any . 6. It is useful to specify that the response to each requirement must be coded. for example: A--meets requirement. they should accompany it with the requirement reference number. C--major modification required. B--minor modification required. Explain that if the suppliers wish to give additional information.
The objective of the evaluation process is to determine which Tender represents best value for money.issue raised in the document. Outline your framework for evaluation A copy of the Rating Schedule Form should be issued and explained within the Request for Proposal documents. including examples of similar projects successfully completed . Copies of questions and answers should be circulated to all suppliers. 8. (See Assessing Responses to an ITT) Explain that the evaluation process primarily focuses on scoring the returned proposals against the initial evaluation criteria detailed within your Project Brief. Suppliers' details Details of the precise general and functional requirements of the tendering suppliers should be included in appendices. The general requirements may take the form of a questionnaire and will cover: * registered and trading offices * insurance details * trading record. 7. Prospective suppliers need to understand that the underlying principles of the evaluation phase are to ensure that the selection process is the most cost-effective solution to meet your identified business needs. operational and commercial requirements. There are three major areas for consideration when evaluating proposals: * the solution itself * cost of the proposal * supplier from whom the solution will be acquired. with regard to whole life cost and compliance with technical.
Examine the written. except that price information is always required.* employment data. Excellent 9--10 points. add these products to make a total sum for each supplier. * Multiply the individual weights by the individual scores and record the products. use a total weight of 100 so each weight is a percentage. The highest total score . including staff turnover and an organisational chart * diversity and equal opportunities policies * health and safety policies * quality policies * environmental policies. Good 7--8 points. Include the assigned weights in a Rating Schedule Form issued within the Request for Proposals. discussions and visits to other users. the timetable set in the ITT should be strictly adhered to. * Then. enter a rating score for each criterion according to the following code. compare the total scores on each form. * Finally. Every proposal must be evaluated using the same weights. Fair 4--6 points. A suggested framework would be as follows: * First assign a weight to each criteria in your ITT based on its relative importance.) The weights and the criteria may vary from contract to contract depending on the nature of the work. (For convenience. Poor 1--3 points. It may be helpful to speak to other organisations that have issued similar invitations. Assessing responses to the ITT In fairness to the suppliers. formal responses to the ITT in conjunction with evidence you have gleaned from demonstrations. using a separate form for each proposal received. Your evaluation framework should be explained to prospective suppliers to enable them to respond accordingly.
technical merit. and seen to be so. must be fair and legal. otherwise an aggrieved bidder may decide to sue for unfair practices. Invitation to tender--good practice checklist Have you: * Included copyright and confidentiality statements? * Made the aims of the document clear? * Provided a brief company background and strategy? * Outlined the overall project objectives and deliverables for the project (i. unsuccessful bidders are understandably anxious to know exactly why a bid has failed. whether private or public sector. It is important to note that regulations require public sector authorities to state clearly in the tender notices whether the award process will be based on the lowest tender or on the most economically advantageous offer. The regulations also allow unsuccessful bidders to request the awarding authority to explain on what basis the bid failed. It follows that the evaluation of all tenders. in order of importance. although at the moment it is unclear exactly what degree of detail has to be provided.should indicate the proposal which potentially will provide the best value to your organisation. if possible. With high costs involved in preparing major bids. quality. business case)? * Included details of your anticipated budget? * Provided a specification of your requirements? . The criteria to be used must be listed. and maintenance and support requirements. The latter may take into account factors such as price.e. The cost of submitting a tender can be high.
broken down into individual elements? Managers should avoid * taking on trust the suppliers' answers to the ITT * expecting a perfect solution--you may have to select the best compromise .* Established and communicated your tender Evaluation Criteria? * Included the information you require in the Expression of Interest (EOI)? It is good practice to provide headings. * Indicated a preferred method of response? * Developed a system for logging questions and an agreed turnaround time for questions? * Arranged a central point of contact for dealing with those suppliers that are tendering? * Indicated a desired project timescale? * Stated a date and procedures for the submission of the Expression of Interest? * Requested an indication of infrastructure requirements from the suppliers that are tendering * Requested details of suppliers' background and experience? * Requested references from at least 2 of their existing or previous customers? * Included your terms and conditions of trading and an acceptance form that they can sign and return? * Requested a budgetary indication of costs.
Stamford. P D V Marsh Aldershot: Gower. 2001 This is a selection of books available for loan to members from the Management Information Centre.ojec. David Nickson Aldershot: Gower.cips. 3rd ed.org .org.* getting bogged down in procedural issues Additional resources Books The bid managers handbook.managers. 2003 Contract negotiation handbook. Lincs PE9 3NZ Tel: 01780 756777 www. Easton on the Hill.uk/mic Internet resources The Official Journal of the European Union (OJEU) is a gateway to resources for purchasers who wish to publish tender notices and suppliers who wish to search for business opportunities: www. More information at: www. 2003 Bids tenders and proposals: winning business through best practice. Harold Lewis London: Kogan Page.com Organisations Chartered Institute of Purchasing and Supply Easton House.
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