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The Future of PQQs

Bid-writing

In the world of bidding there has been considerable speculation and discussion over the years on whether the PQQ will be abolished and bidding for contracts will be limited to a one stage approach: the ITT.

Currently there are two options for procurement: two stages comprising of a PQQ and subsequent tender document, or a single stage tender process which merges the two documents into one stage. There are pros and cons for both approaches.

A single stage tender process streamlines the procedure for both bidders and evaluators in terms of both time and resources; however, this does create high levels of competition at the tender stage.

It does seem the procurement process is headed this way, as there has been a vast increase in contracting authorities issuing a ‘standardised PQQ’ or a ‘standard selection questionnaire (SSQ)’ which is consistent across all industries and contains the same core sections. This has replaced some of the more onerous documents which have previously been used to vet companies in progressing to the ITT stage. It is also common for the tender documents to be available at the PQQ stage, eliminating the unknown and allowing a company to evaluate if they can submit a successful tender in advance of the whole process.

So, what does the future hold for the PQQ?

Advantages of single stage tendering

Removing the PQQ stage allows companies to focus more effort on the tender stage of the process, which is more narrative-driven and focuses in on the contract in question rather than being data-driven, like the PQQ. As we know all too well, resource issues in firms can easily arise when having to undertake a complex bid in a short space of time. A single stage process should relieve some of the stress and time pressures for potential contractors , meaning they stay interested and focused on tendering for the contract and produce the best quality bid possible, rather than having to undertake a lengthy bid process. It also allows a fully transparent process – currently there is the risk of delivering a successful PQQ and then encountering an ITT that has requirements far too complex for your company.

It is also beneficial for evaluators who may have numerous bids to consider. The evaluation process is more streamlined and less administrative effort is generated, hopefully reducing the number of contracts delayed, suspended and even cancelled due to evaluation issues or possibly the submission of low-quality bids.

All the above should result in the authority receiving more high quality, competitive bids and the process itself should be both quicker and cost-effective in terms of tender costs.

Disadvantages of eliminating the PQQ

There is, however, an argument for keeping both the PQQ and ITT stages separate in the procurement process, as the PQQ can in fact be a useful tool for shortlisting bidders and allowing only the most suitable companies through to the final stage.

Removing the shortlist stage could result in a costly evaluation – more tenders will undoubtedly be received. They may be double the size of a PQQ, and more complex in nature, leaving a vast amount of data to be evaluated.

This also prompts the question of whether all submissions are given the same level of evaluation and scrutiny, as a larger volume of work creates a higher margin of error. For certain contracts, administration could actually increase, leaving us wondering whether lower prices will take priority in a bid to make a decision quickly and make an early appointment of a contractor. This is especially true of the construction industry, and design and build projects that may suffer from “the race to the bottom line”.

What does this mean for bidders?

Organisations bidding for contracts need to be aware of the possible changes in the process, namely higher levels of competition, if the PQQ stage is ever removed completely. You may see it as a small victory having one less document to complete, but it is likely the ITT itself will be more comprehensive and complex. Your bid needs to be easily distinguishable, at a realistic price, against many other bidders in order to be successful.

For further information or assistance with a bid, contact our team on 0800 612 5563 or email info@executivecompass.co.uk

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