Q&A: the benefits of tendering

Tender team manager and Pelican procurement expert Kim Nailor answers some of the most frequently asked tendering questions

When it comes to the tendering of food, non-food and beverage procurement, many organisations are unsure whether they need to follow EU legislation and generally what the benefits are of tendering.

Pelican’s expertise in food purchasing and EU tendering is unique in the marketplace. They have a team with CIPS-qualified procurement experts who manage all aspects of formal food and non-food tendering on behalf of their clients, adhering to EU procurement legislation and the highest standards of professional practice. Here Kim answers your most frequently asked questions…

Q: What are the advantages of going to tender?

There are many advantages in using a tender process as your procurement method of choice for approaching the market – these include:

  • Due diligence: it can help to provide the best possible value-for-money outcome from procurement activity.
  • Service: while generating financial savings is important for all businesses, this shouldn’t be at the detriment of service levels – by incorporating specific service KPIs in the tender documentation, suppliers will be aware of the standards you wish to achieve.
  • Quality: when requesting the market to respond to your tender, it is important to stipulate the quality of products you require – again, via a tender you have the opportunity to evaluate product quality, as well as service and price.
  • Competitive: as a number of suppliers compete for the business on offer, the tender process delivers the most competitive value from the marketplace.
  • Awareness: it assists companies in maintaining an understanding of what alternatives are available in the market.
  • Control: it not only helps to keep current suppliers mindful regarding their terms of service, pricing and quality of products, but it means suppliers submit proposals based on your specific requirements, and not on their own terms.
  • Best fit: going to tender is the best way to test your pricing against market pricing. Plus, you can invite best fit suppliers for various categories, whether the need is for national supply or you use local or regional suppliers to suit your business.
  • KPIs: you establish your key performance indicators, quality standards and service levels at the outset, meaning you are in a better position to negotiate terms as suppliers can see what your needs are from day one.

Q: When should an organisation undertake a tender?

Currently, any government or state organisation in the UK, by legislation, must follow the EU tender route. The current threshold for an EU tender is £181,302; anything below this figure means the organisation is not compelled to go through the EU tender route, but many use the non-EU route to achieve the best value from the market.    

Q: What are the overall benefits of adopting the EU-tender practices?

The aim of EU procurement practices is to enable organisations to demonstrate that their processes and practices affecting suppliers are professional with respect to:

  • Equal treatment: ensuring that the procurement process gives equal opportunity to every supplier.
  • Transparency: the procurement process adopted is open to scrutiny.
  • Non-discrimination: not to be treated unfairly.
  • Proportionality: so that smaller suppliers are not disadvantaged by lengthy procedures.
  • Mutual recognition: the right of every supplier in the EU to bid for business.

The benefit of adopting these practices are:

  • Compliance with legal and financial obligations
  • Achieving financial savings that can then be re-invested in frontline services
  • Ensuring that all goods or services purchased are fit for purpose
  • Ensuring that suppliers deliver as agreed and stipulated within a Service Level Agreement (SLA)

Q: What does a tender do to show you savings?

The tender process can include consolidation; at present you could be buying your products from lots of suppliers. By purchasing from multiple suppliers, the value of your purchases to each may be relatively small, and as such you may not necessarily be seeing the biggest purchasing value. The tender process consolidates your purchases; leveraging total scale on a sole supplier or a few suppliers that best fit your needs.

In addition to financial savings, there are two other important criteria to make the process holistic: service and quality.

To summarise, the three key areas that are being evaluated in all tenders are – price (the commercials), service (to ensure goods are delivered at the right time, to the right place as agreed) and quality (value for money) – to ensure you are purchasing the right product, at the right cost.

To find out more about Pelican, visit: www.pelicanprocurement.co.uk

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