Five ways to achieve transparency in your procurement
Transparent procurement strategies attract quality bids, secure best value prices and deliver better outcomes.
By Project Director Alistair Robson and Director Will Goring
Transparency needs to be hardwired into procurement as a lack of it can result in diminished due diligence, rushed solutions and poor-quality tenders, and may lead to several problems downstream in implementation.
The importance of transparency is highlighted in the UK Construction Playbook, which sets an ambitious agenda for change, for a more productive, resilient and capable industry. By making our procurement processes more transparent, the industry can develop better solutions, deliver higher quality tenders and reduce downstream problems, not just in the UK, but across the world.
Clients who provide the market with real-time visibility of the procurement process, from undertaking market testing to firm up their approach, to initial tender issue, response gathering and evaluation, are more likely to make the right choices. This ensures better outcomes, value and accountability for their projects and programmes.
There are incentives for those tendering for work too. For a start, suppliers are more likely to bid if they know the process is fair – with all applicants having the same access to information and being judged on the same criteria. Making it easy for would-be suppliers to access all relevant information will also reduce both the time and cost required to tender.
Not only will this give the procurement team a wider talent pool from which to choose, it will also help successful bidders feel like a trusted and valued part of the supply chain right from the start.
Embedding transparency in procurement
Clients should embed transparency into their procurement process through the following five steps.
1. Engage the market
Early engagement with the market before commencing procurement allows you to test proposed procurement strategies prior to sign off and commitment, helping to maximise the potential for successful returns, building confidence and reducing the potential for non-engagement.
It also helps to increase the market’s awareness of upcoming pipelines of work, allowing them to manage their resources accordingly and helping to validate the achievability of delivering the proposed outcomes.
A key part in market testing the procurement strategy is feedback on how best to achieve the requirements (and outcomes) through the procurement, including a definition of the requirements and their evaluation.
2. Clearly define requirements
The procurement package for prospective bidders should be clear and to the point, setting out the end-to-end tender process in detail, including the timeline.
Supporting information including design and project data should be clearly identified. Delivery requirements and the information bidders use for a response should be clear, easy to locate and provided in formats that are accessible for all parties.
For qualitative elements, the package should explicitly say the capabilities that are required from suppliers, how they are to be evidenced and, wherever possible, clearly establish in the assessment process, including the relative weight attributed to each section or question so that bidders understand this when producing their response.
Where price is a part of the evaluation process, the structure of the priced responses should be the same for everyone, with the level of detail required aligned to the timescales available for the supply chain to respond.
Better structured questions and responses will make it easier for bidders to show their suitability, boost the completion rate, and enable assessors to evaluate and rank submissions more effectively.
3. Clear communications and status updates
Support for bidders should be channelled via a single point of contact in the procurement team, who can answer (or obtaining answers to) any queries about the tender process, what is required and progress. Communication should also be kept to a single official channel and recorded so that parties are clear on who has communicated what, to who and when to avoid the need for later clarification.
Care should be taken to keep track of what stage each bid is at – both in terms of what has been sent to applicants, as well as what documents have been returned and when. Effective status management is vital to ensuring that on the day the client opens the bids for a particular package, all submissions are complete, and nothing is missing.
4. Informed business decisions
Standardised questions, together with the requirement to submit responses in an agreed format will encourage bidders to enter bids that are easy to review and score.
However, some suppliers may be tempted to submit more information than required. This can result in additional content supplied that is focused on marketing rather than evidencing their suitability, adding to their workload and to that of the evaluation team.
The response requirements for suppliers should be clearly identified and in some cases, restricted to the information that is relevant to the question asked, much like an exam question. For assessment, the formulae for the commercial elements of the package should be hardwired into an online application form. This will enable the procurement team to compare the key financials of rival bids, like-for-like.
Finally, for the evaluation of bids, there should be a clear separation of expertise in the assessment team to be able to evaluate the quality of the answer. Evaluators with expert knowledge in a specific area should be tasked with assessing bidders’ ability to meet that part of the brief, to ensure the right people review and score the right responses.
5. Digital technology to transform transparency
Just as BIM has transformed the design, cost and project management of construction projects, digital solutions are enabling clients to bring greater consistency, certainty and transparency to their procurement process.
Used correctly, eProcurement platforms can serve as a ‘single source of truth’ for both client and suppliers.
On the supplier-facing side, a good online portal will guide prospective bidders through the tender process, step-by-step, detailing exactly what is required of them, when and how they are to be assessed.
For the client, it should provide a clear overview of the procurement process, identifying which packages have been put out to tender, who is bidding and exactly what stage each bid is at. Platforms can even be set to give real-time updates when prospective suppliers open tender documents and receive submissions.
Our digital procurement tool eTender does all this and more. Developed from our industry leading procurement knowledge, eTender provides a transparent environment that enables the procurement team to not only gather all necessary information in a standardised format, but also review and evaluate the responses in a secure, cloud-based location that can be accessed by any authorised member of the procurement team who needs full visibility of the tender process.
The reliability and repeatability eTender brings to the procurement process has led several multinational clients, including a global technology company, to use our platform to procure projects and services across the globe.
Transparency front and centre
As well as the UK Construction Playbook, the UK Government’s recent Green Paper: Transforming public procurement also puts transparency front and centre of a bold vision of post-Brexit public procurement. Tellingly, it frames digital technology – together with an Open Contracting Data Standard – as the key enablers for reform.
Similarly, while the private sector may not have a statutory requirement to embrace transparency in its procurement, the commercial and operational case for transparent tendering (and the benefits it brings) is no less compelling.
Above all, the combination of transformative digital tools like eTender with a commitment to transparency is a formidable one. Together they enable procurement decisions to be robust, fair and evidence-based, increasing certainty, accountability and ultimately delivering better value and better client outcomes.