Tendering Process (Hansard, 16 February 1995)

§ Mr. Redmond
To ask the Secretary of State for Defence if he will make it his policy to give greater weight to the assessment of the quality of bids during the tendering process; and if he will make a statement.

§ Mr. Freeman
We would expect tenderers to present their proposals in the format requested in the invitation to tender, and to a standard commensurate with a professional organisation. Tender evaluation takes into account all relevant factors and the quality or standard of a tender would be one such factor. In a close competition in which bidders' proposals were evenly matched, the quality of a proposal could offer an indication of the commitment and management capabilities of the competitors and assist in final selection.

§ Mr. Redmond
To ask the Secretary of State for Defence what action he is taking so that tendering procedures are improved by allowing greater flexibility in the choice of procurement route; and if he will make a statement.

§ Mr. Freeman
To secure the best value for money, taking account of quality, performance, delivery, risk and cost, it has been our practice with market testing exercises positively to encourage tenderers to submit solutions which, through a reasonable relaxation of the terms of the invitation to tender, or the adoption of an alternative approach to meeting the essential requirement, might prove cost effective. We are now extending that approach to equipment procurement to ensure contractors are aware of our willingness to consider innovative bids in this area also.

§ Mr. Redmond
To ask the Secretary of State for Defence what measures he is taking to streamline tendering procedures; and if he will make a statement.

§ Mr. Freeman
A number of initiatives from a comprehensive review of contractual policy and procedures carried out in 1992, and more recently the defence costs study, are in the course of implementation. These include the use of pre-qualification procedures to reduce the number of tenderers to those best qualified to meet the requirement; providing greater visibility of tender evaluation criteria; and making increased usage of the "Possible Future Purchases" section in the "Defence Contracts Bulletin".

§ Mr. Redmond
To ask the Secretary of State for Defence what action he is taking to improve the standard of specifications in tendering procedures; and if he will make a statement.

§ Mr. Freeman
We recognise the importance of stating our requirements in clear and unambiguous terms and will continue to work to improve the quality of specifications and related material such as acceptance criteria and configuration control arrangements, supported by taut contractual terms. This can include consultation with 821W industry on draft specifications to encourage innovation and optimise possible trade-offs between performance and price. We have also taken steps to improve training for staff in the preparation of specifications.

§ Mr. Redmond
To ask the Secretary of State for Defence if he will make it his policy to restrict tender lists to no more than three companies; and if he will make a statement.

§ Mr. Freeman
Our aim in producing tender lists is to select a field that is likely to lead to the keenest competition between firms which are considered capable of meeting all the obligations set out in the invitation to tender. To achieve this aim, and reduce the cost of the competitive process to both the Department and industry, we would normally develop tender lists of around six bidders for each competition. We consider that this approach, which was agreed in consultation with industry, strikes the right balance.