ProjecTeam Ltd
21 Lakeside
Bury BL9 9TX
INDEX:
FREE GUIDANCE:
Tender
Evaluation
Tender
Boards
Contract
Management
SUGGESTED
UPDATES TO TREASURY MODEL
ADVANTAGES FOR:
Government
NHS
Trusts
Companies
GOODS
PROCUREMENT
FREE GUIDANCE
ProjecTeam
Ltd
Tel: 0161-766-8709 Fax: 0161-766-6620 E-mail: mdrake@projecteam.co.uk
Treasury Model Contract Documents for Services Contracts
TEXT TAKEN FROM ARTICLE PUBLISHED IN
"OVERVIEW" ISSUE 9
Written by Martin Drake
With the driving forces of market testing, outsourcing and more recently PFI contracts, over the past five years the Government and private sector have had to come to terms with each other in the contracting of services. This has focused attention on the need for Government to recognise the movement away from the purchasing of goods to that of being the leading purchaser of services.
The purchasing process requires new skills and procedures. Conditions of contract must be used which specifically relate to the provision of services as opposed to those already available for new construction or the provision of goods. The new strategic services suite of model contract documents to be published in May by CUP are designed to meet this requirement.
For some time industry has expressed concern with regard to the lack of consistency between Government Departments to the tendering process and conditions. They are not alone in expressing concern. Some small Government Departments have been concerned at their lack of resources and expertise to address some of the technical issues involved.
The Efficiency Unit "Competing for Quality Review" recognises the need for some central consolidated guidance. All of which supports the need for the work done over the last 18 months by the Inter-Departmental committee set-up by the CUP, as part of their programme for implementing "Setting New Standards", with producing a new set of model documents relating to the letting of strategic services contracts.
The CBI have been consulted in some depth and whilst not able to endorse the whole document they are very supportive of the approach and their positive and constructive comments have largely been incorporated.
Use of the documents is not mandatory but a statement of good practice. The benefits of using the documentation include:-
-
consistency between Departments,
-
no re-inventing the wheel,
-
reduced consultancy fees,
-
comprehensive coverage of contracting issues such as TUPE,
-
variation procedures,
-
setting-up period and handover,
-
clarity.
The model documents cover:
-
Model Questionnaire to be issued in response to expressions of interest
-
Model letter of Invitation to Pre-Qualification Interview
-
Model Invitation to Tender (ITT) letter
-
Model Section 1: Form of Agreement;
-
Model Section 2: Conditions of Contract.
Model Supplier Questionnaire
It is envisaged that the questionnaire will be sent to all respondents to the advertisement for tenderers. The answers to the questions should be evaluated in order to select the shortlist for pre-qualification interview.
Model Invitation to Pre-qualification Interview letter
The objective is to make the interview specific to the procurement in hand. In order achieve this companies should be given enough information to enable them to make a meaningful presentation. It is recommended that they are sent draft tender documents and provided with a background briefing.
Timing is important, time must be allowed reflect upon issues raised. On the other hand if it is carried out too early the draft documents will not have been sufficiently developed.
The focus of the interview needs to be on "how" the service provision would be managed and carried out at working level. The wording of the invitation letter seeks to obtain the attendance of the designate contract manager or person of that level.
Invitation to Tender
This will assist the bid equalisation process and help in the understanding that a level playing field exists. The documentation requires that the position regarding the use of existing Authority's Property and the availability of the Authority's Premises is clearly stated to all tenderers, which includes where appropriate In-House teams.
The current practice of incorporating the Form of Tender and any associated pre-award correspondence into the contract has been eliminated, providing a true Entire Agreement contract. Any agreed changes to the proposed contract documents, arising from the tender, should be word processed into the contract before it is signed.
There is a structured approach to the application of the TUPE provisions. It differentiates between market testing/outsourcing situations and the reletting of existing contracts. It also provides for the Authority stating its view on the applicability of the TUPE regulations.
Provision has been made for the Authority to inform the tenderer of the evaluation criteria.
Section 1: Form of Agreement
The agreement consists of a single page, to be signed by both parties.
Section 2: Conditions of Contract
In addition to the model contract conditions, guidance notes have been incorporated to assist the user.
Within the Section 2 Conditions reference is made to Section 3 being the Specification and Section 4 being the Schedule of Prices and Rates providing a module format contract. The guidance notes also suggest that monthly reporting, performance monitoring and general administration information should be contained in Section 5, Administration Instructions.
The Conditions are intended to be used as written with little need for contract specific alterations. The Authority will remain accountable for the adequacy of their conditions and should seek further advice as appropriate.
The new conditions supersede those contained in CUP Guidance Note 42.
Examples of the features contained within the Conditions are:-
Only a signed Variation to Contract form can be used to instruct a change to the Conditions, Specification or Schedule of Prices and Rates.
The Conditions provide for a Setting-up Operations period prior to the Contractor becoming responsible for the Services from the Commencement of Full Operations.
The Conditions differentiate between those applicable where the Services are carried out on the Authority's Premises and those which are not.
The requirements relating to Handover at the end of the Contract Period have been addressed. These include the provision of information to enable a retender to take place and the right to purchase Contractor's Equipment.
Definitions have been used for precision and brevity. Examples are that "Approved" means the written consent of the Authority's Representative; "Equipment" means equipment, materials, consumables and plant; "Staff" means the Contractor's staff whereas the Authority's staff are "Personnel".
Conditions have been incorporated into the contract for the re-tendering of Services where TUPE conditions apply. These include:
- the provision of Staff information,
- limitation on the movement of Staff in or out of the Services,
- limitation on changes to the Staff conditions of service,
- the right for the tenderers to visit the Contractor's premises.
The model documents will be published in May 1997. Copies will be available from HM Treasury Public Enquiry Unit: Tel: 0171-270-4558.
It is the intention that the model documents be updated periodically to take account of experience in use. Comments for consideration should be sent to the strategic services contracts advisor HM Treasury CUP: Tel: 0171-270-1633.
The author of this article - Martin Drake chaired the Inter-Departmental Committee tasked with the preparation of the model suite of documents and since their completion has prepared a framework specification, schedule of prices and administration procedures together with training modules to assist in their use.