This Section of the Manual should be read in conjunction with the OGC Guidance "Supplier Debriefing" (link updated March 2004). 

It is Government policy to improve the competitiveness of suppliers. Debriefing unsuccessful candidates and tenderers enhances the Department’s reputation as a best practice purchaser and promotes better value for money in the longer term. You should offer all unsuccessful tenderers the opportunity of a debriefing.

In addition, unsuccessful candidates and unsuccessful tenderers have a right to know the reasons for the rejection of an application for inclusion on tender lists or, if invited, the tender under the EU Public Procurement Directives.

Subject to EU Public Procurement Directives requirements, the benefits of debriefing need to be balanced with the effort involved. On minor contracts, full debriefing may be more difficult to justify but remember the process is often of most value to smaller and newer firms.

The benefits include:

• assisting suppliers to improve their performance - during the debriefing interview the perceived weaknesses of the unsuccessful bid (for example in terms of organisation, procedures, people etc.) should be diplomatically indicated - sensible suppliers will rectify these deficiencies so that the Department can expect to receive a better tender from them in the future;
• offering unsuccessful candidates and tenderers some return on the time and money they have expended in preparing their tenders;
• establishing a reputation as a strictly fair, honest and ethical client, which is not only valuable in itself but ensures that the "best" suppliers (or contractors) are keen to submit tenders and their tenders are fully responsive to the enquiry documents and hopefully their best offer first time around.

The person responsible for specification and evaluation normally carries out the debriefing. Debriefing requires skill and should not be carried out by the unprepared.

While following a few basic ground rules, debriefing must be tailored to each tenderer:

• debriefing interviews must not be held before the contract is signed or otherwise satisfactorily concluded and all unsuccessful tenderers have been formally informed;
• suppliers must not be encouraged believe that the debriefing process can be utilised to change the Department's decision on the choice of supplier;
• prior to the interview, it is essential that the tenderer understands that the interview is being carried out on an informal basis with the object of mutual longer term benefits and that the company will be told, honestly (and diplomatically!) of perceived weaknesses, but that argument will not be entertained as to whether the perceptions are right or wrong;
• it is vital that, at the start of the interview, the tenderer understands that the weaknesses to be mentioned are not those perceived by one person only but by the tender evaluation team as a whole;
• it must be made clear to each tenderer that only their tender will be discussed and that there is no direct comparison with the tenders of their competitors;
• under no circumstances should such things as the commercial terms, innovative ideas, etc., put forward by one tenderer be disclosed to another;
• debriefings should normally be handled by interview - tenderers may want to take notes during the interview but requests for formal minutes should be refused;
• above the EU threshold, tenderers may require written reasons for rejection;
• letters may also be more appropriate for overseas based organisations;
• any written debriefings must be carefully constructed.
• in concluding debriefing interviews, it is both courteous and can be very illuminating to ask the unsuccessful tenderer to comment on the invitation to tender documentation;
• record the results and conclusions of debriefing interviews on the contract or supplier file for future reference.

A tender may be rejected for basically two reasons:

• during the evaluation process, a mandatory requirement of the invitation to tender is not met; or
• a tender passes the evaluation but is not ranked as offering the best value for money, i.e. not ranked first.

In either case it is likely that some parts of the bid are favourable though not all. The points which debriefing cover therefore may include:

• production schedules that are too long
• design deficiencies
• unacceptable delivery period
• unsatisfactory organisation and administration
• inadequate experience
• inadequate personnel
• equipment not up-to-date
• poor sub-contracting control
• inadequate cost and schedule controls
• industrial relations uncertain
• inadequate quality management
• suppliers contract terms and conditions being imposed
• poor after-sales service
• uncertain financial standing.

E.14.1 Contents

Introduction
The Meaning of Negotiation
Negotiation Techniques
Purpose of Post Tender Negotiation
Scope of Post Tender Negotiation
Control of Post Tender Negotiation
Training

This Section of the Manual should be read in conjunction with CUP Guidance Nos. 1 and 19 on Post-Tender Negotiation.

Negotiation can be used to strengthen the procurement process when competitive bidding alone does not appear to offer best value for money. Effective negotiation is a specialist skill and advice should be sought from procurement staff who have undergone the appropriate training.

Particular care is required when the procurement exceeds the EC threshold as negotiations may invalidate the tendering process if they result in substantial change to the specification.

Negotiation is not only about price, but reassessing all pertinent issues to a purchase.  Quality, delivery, learning curves, productivity, tooling and set up charges, design, contingencies, allowances, travel, terms and conditions, payment terms, warranties (and warranty periods), and so on may be re-examined. Anything that may add to the whole life cost of the procurement can be included.

Competitive bidding allows the market forces of supply and demand to establish prices (and other elements of whole life cost). Negotiation in a procurement brings into play the action and attitudes of the individual buyer and seller.

Negotiation is not used to counter market forces, but to exploit them and direct them to achieve the DTI objective of "value for money" in procurement.

The object of negotiation is to obtain contractual improvements without putting other tenderers at a disadvantage, distorting the competition or damaging trust in the competitive tendering process. It is not a mechanism to extract commercially and ethically unacceptable terms.  Negotiation should be a means of obtaining best value for money by ensuring that an acceptable finished product or service is delivered to the desired specification at a competitive but fair market price.

Professional procurement staff employ negotiation skills to ensure that the DTI is not at a disadvantage when dealing with sales people who are often well trained in the art of negotiation. Broadly, this means planning and preparing for meetings carefully which should cover the following:

• preparation - knowing the commodity and its importance, deciding sourcing policy;
• market considerations - knowing the position of the supplier in the market, turnover, policy etc.;
• DTI position - deciding objectives, strategy, listing possible concessions, rehearsing opening gambit, producing an agenda;
• supplier organisation - learning about the company, check trade journals, trade lists, "Who Owns Whom" and "Key British Enterprises" etc.;
• the supplier's personnel - referring to previous notes, noting likes and dislikes, noting authority levels;
• meeting plan - reviewing notes, strengths and weaknesses - recognising tactics of the other side;
• conclusion - reaching a mutually acceptable agreement.

DTI policy for any post-tender negotiation is to obtain best value for money (not simply lowest price) and to use techniques that are fair, ethical and comply with national regulations and EC Directives.

The post-tender negotiation is a logical step in the procurement process when conducted with professionalism and integrity . It can reduce the overall "Total Costs" of products and services or gain other advantages. It must, however, be carefully planned and managed so that confidence and trust in DTI are retained. Pay particular attention to the terms of CUP Guidance Nos. 1 and 19 and always observe good ethical standards.

Safeguard against negotiation carried out under the ‘open’ or ‘restricted’ procedures of the EC Directives resulting in distortion of competition, particularly on price, or a change in the specification that might invalidate the procurement process. Any significant changes should be notified to all tenderers, thus initiating a re-tendering process.

The purpose of post tender negotiation is the exploration by both parties of the means by which the purchaser can achieve a better deal on a mutually acceptable basis.

Such negotiations should be a normal part of the bargaining process in assessing quotations (up to £10,000). For purchases of major requirements, the cost of negotiating may be high (several man days per tenderer), so a careful judgment needs to be made on the likely value of any benefit which might be gained.

The use of post-tender negotiation should not be only to distinguish between comparable bids. Even if one bidder is clearly ahead of the others in value for money terms, there can still be scope for negotiating further improvement.

Potential areas for negotiation will differ for every contract but typical areas might be as follows:

• terms of payment;
• supply and cost of spare parts;
• earlier delivery or completion dates;
• warranties and guarantees;
• documentation requirements;
• quality - zero defects - right first time;
• progress and inspection procedures;
• training of personnel;
• maintenance, repair or after-sales service;
• compensation for failure to meet specified requirements;
• procedures for remedial action;
• price.

This list is not meant to be exhaustive. It is a concept of purchasing that "everything is negotiable".

Post tender negotiation must be a controlled and documented process.  Prior approval for a negotiation should be obtained from a line manager who must be satisfied that there is a considered and solidly based prospect of improving value for money and can justify the resource costs.

Negotiations should be carried out by trained and experience procurement staff.

Negotiations must be fully documented so that there is a clear audit trail recorded on file, justifying the post tender negotiation and showing that it has been conducted in a fair manner.

The agreed benefits should, where possible, be quantified and entered on the quotation or tender tabulation form. The final ranking and prices can then be established and a recommendation made for awarding the contract.

Any changes agreed with the tenderer must be confirmed in writing (letter, telex or fax) and embodied in the final contract document or order, which will be sent to the successful tenderer for acceptance.

All tenderers must be advised and invited to re-tender in accordance with the instructions to tenderers if the specification or requirement is changed to any marked degree.

Procurement staff likely to be involved in post tender negotiation can apply for one of the many courses on negotiation techniques presented by the Civil Service College (CMPS) and the Chartered Institute of Purchasing and Supply. There are also many videotapes in addition to literature available on the subject. Information on courses and literature can be obtained from your Training Liaison Officer or Procurement Officer.

E.15.1 Contents

Introduction
Ordering Using the Government Procurement Card (GPC)
The Purchase Order and CTP
Summary of CTP Process

This chapter needs to be read in conjunction with the Commit to Pay MENTOR guidelines (link updated March 2004).

Ordering is the part of the procurement process whereby the Department enters into a contractual relationship with a supplier for goods or services. Ordering usually follows the tendering process and, by acknowledging the order, the supplier agrees the contract. Strictly speaking there is no actual requirement for the supplier to provide acknowledgement as this is, in effect, our acceptance of his offer. Nevertheless supplier acknowledgement may be requested.