The key to the successful adoption of Competitive Flexible Procedure

In the third of our series of bite-sized thought leadership pieces on the new Procurement Act, which went live on 24th February, Echelon Consultancy’s CEO Mathew Baxter talks about the introduction of the new Competitive Flexible Procedure (CFP).

As we herald the implementation of the new Procurement Act, one of the most significant changes relates to the procurement procedures that Contracting Authorities (CAs) can use for above threshold procurement exercises.

Under the previous PCR 2015 Regulations the two default options for procurement were a single stage “Open” procedure or a two stage “Restricted” procedure (that included an initial pre-qualification process to reduce the number of bidders). For more complex procurements CAs then had the option of choosing several more iterative procedures, including Competitive Dialogue (CD) and Competitive Procedure with Negotiation (CPN).

Under the new Act, there are only two primary options, the single stage Open procedure remains but Restricted, CD and CPN are all replaced by the new Competitive Flexible Procedure (CFP).

The intent of this new procedure is to give CAs more flexibility in designing a procurement model that is best suited to the works/services that are being procured. However, careful consideration needs to be given to the CFP processes adopted by CAs before they are utilised, as transparency and fairness of competition, must always be ensured.

The key to the successful adoption of CFP will be to ensure that the model adopted is proportionate to the works/services being procured. Whilst we both endorse and embrace the use of negotiation through the procurement process, it needs to focus on those items that are negotiable and where an iterative process will add value to both the CA and the bidders.

Our view is that the lean form of CD (that we developed and have used on over 50 projects under the PCR2015), delivers many of the objectives of CFP. Drawing on the lessons learnt from this lean CD, we have designed a flexible, transparent and fair CFP model to be used under the new Procurement Act.

New Competitive Flexible Procedure model

We believe that our CFP model will be suitable for most asset management-related contracts and will involve an initial stage to assess bidders’ ability, utilising the new “Conditions of Participation” process. Section 4 of the guidance for this process states the following:

“In a competitive flexible procedure, the conditions of participation may be used to limit the number of suppliers. The conditions may provide for the selection of suppliers in an initial participation round via a pass/fail mechanism or using objective criteria to score suppliers as set out in the tender notice. This could then lead to reducing the number of participants to a shortlist of suppliers who then progress to future tendering rounds.”

The shortlisted bidders will be invited to provide an initial proposal, then a pre-stated number of suppliers will be invited to enter a negotiation stage, which will be designed specifically for each CA based on the scope of what is being procured.

Typically, there will be a single stage of negotiation before issuing the final suite of documents to the bidders to enable them to provide their final proposals. In some instances, there may be more than one stage, but we would expect this to be the exception.

We will also always advocate for CAs to undertake an interactive market engagement process, as detailed in my previous blog.

The requirement for the increased use of CFP models is, in my opinion, a huge step forward and will allow CAs more flexibility in procurement, as well as encouraging a more iterative approach.

However, the models adopted MUST be proportionate and it is also important that CAs support and train their stakeholders, and particularly evaluators, through all stages of the CFP process, with a particular emphasis on ensuring teams are equipped to undertake successful negotiations.

To find out more about how our team can support you with the CFP process, fill in our contact form or email info@echelonconsultancy.co.uk