CPV Code: Common Procurement Vocabulary
Common Procurement Vocabulary is a code that is given to every possible product or service so that wherever you are in the EU you will know what type of thing the tender is referring to.
PQQ: Pre Qualification Questionnaire
The public sector is very risk averse. They will often found out how strong a company is before they will invite them to tender for some work. This is achieved by using a Pre Qualification Questionnaire. This normally examines a company finances, references, policy documents, staff strengths. Accreditations and many others. It does not ask them how they will do the job they are interested in. This is part of the restricted Procedure. If no Pre Qualification Questionnaire stage is required then the procedure is known as the Open Procedure.
ITT: Invitation To Tender
ITT is an Invitation To Tender. If a company passes the Pre Qualification Questionnaire stage with a high score then they will be invited to tender. They will receive the full specification of what is required to be done.
EOI: Expression of Interest
An Expression of Interest – this is similar to an Invitation To Tender but the actual specification is not totally clear – it often relates to Information technology contracts where the market moves so quickly a new solution is often found that was not know of before.
MEAT: Most Economically Advantageous Tender
Many SMEs think contracts are awarded on lowest price and there is some truth in this. Most however are run using the MEAT method. This means that factors other than price are taken into consideration such as:
- Lifetime cost of the product or service (cost of replacement, repair etc over time)
- The quality of after sales support
- Sustainability of the product/service and so on
The weightings for the Most Economically Advantageous Tender process are known in advance so an SME can ensure their response meets the weighting.
There is an unwritten rule that no company should bid for a contract that is more than 20% of their turnover. When doing so the public sector sees them as taking a risk. This is because of the resources needed to fulfil the new contract (if they win it) and still maintain their existing clients.
Sometimes larger contracts that are tendered by the Public Sector and split into “Lots”. A lot is a smaller part of the whole contract and as such are usually more accessible to an SME. For example a Border Agency needed security dogs. The contract was worth €200,000 meaning a company should have a turnover of €1 million to bid for all it (see the 20% turnover according to ruke no 4).
So the bid was split into Lots:
- Toys for the dogs
- Food for the dogs
- Veterinary services for the dogs and so on.
This opened the tender up to many SMEs who on their own could not have bid for the larger contract.
VFM: Value for Money
All Public sector buyers want to see some added value in the bids they get as this means they are getting Value for Money.
Approved Supplier List: Many buyers pre approve companies and enter them onto a list called the “Approved Supplier List” sometimes called the “Standing List”. The companies are pre approved to make sure they are a safe pair of hands – this means they have good finances, suitable references and other accreditations. They are then usually the only ones who can bid for the work.
Framework Agreement: A Framework Agreement normally lasts 3 to 5 years and there are a number of suppliers chosen to deliver the service or product. During the life of the agreement only these companies can be asked to deliver the service or product and they must sue the prices and terms and conditions that were signed when the framework started. A typical example is the provision of taxi services to take certain children from their homes to school. Only 4 or 5 companies will be on the agreement and they are the ones who will be asked to do the work.
Tip for success: Ask a lay person to review your tender