Government contracts – the PQQ stage
Any government body procuring goods or services must abide by the Best Value Regime when selecting a supplier, meaning if the contract is over a certain value, they must open the tender up to application.
The procurement process follows a PQQ and tender stage, in which the bidding company is evaluated on both financial and quality elements (and sometimes social value if it is treated as its own separate element). This process means there is much more accountability and more emphasis on value for money, added value and making sure the right company is providing the right services. In 2016, the PQQ was superseded by the SQ (Selection Questionnaire), introduced by Crown Commercial Services to collect the same information in a streamlined way.
The PQQ procurement process
Imagine that local authority A wants to procure service X, which is provided by suppliers M, N and O. Instead of just going with the first one due to a long-standing relationship, or a competitive quotation, they will instead put out a tender document, which will have a list of questions each supplier has to answer, including ones around pricing, services, quality, experience and policies.
At one time if you submitted the most competitive pricing, you won the contract. However, with the weighting now relying on other elements, such as quality and social value, the overall approach is much more holistic, resulting in you needing to submit a strong bid all round.
The PQQ, or pre-qualification questionnaire stage is a way to filter out those suppliers who are not suitable to provide the service, meaning only companies whose submission meets minimum standards will go through to tender stage and be evaluated.
This could be because the organisation:
- Is not financially stable or does not meet the financial threshold required
- Does not have the relevant insurance, and will not commit to getting it
- Does not have a high enough turnover (therefore couldn’t cope with this big new contract)
- Does not have the relevant policies and procedures
- Does not have the relevant experience