AM Bid: 21 Public sector bid trends for 2021 – are you bid ready?
2020 has been a year like no other; so what’s in store in the world of construction sector bidding in 2021? What will be changing in our ‘new normal’? What steps can bidders take to ensure that they are prepared for the year ahead? AM Bid’s Andrew Morrison and David Gray set out what they consider will be the main trends to take account of during the year ahead.
- COVID-19: This will continue to be a huge issue during 2021 affecting what comes to market and when. Bidders will need to demonstrate how they are able deliver their goods, services and works against a backdrop of vaccine(s) rollouts, further spikes, restrictions lifting and easing, safe ways of working (covid specific risk assessment method statements) and economic uncertainty.
- Brexit: Deal or No Deal there are likely to be significant implications. Watch out for impacts to currency markets, trading arrangements, the availability / shortages of non-UK labour and interruptions to some supply chains. If you are operating in markets where these elements are important, then you will need to be able to demonstrate to bidders how your business is taking account of these head winds.
- Contract Notices: There is a new portal for UK public sector opportunities – Find a Tender. This goes live at 11.00pm on 31st December 2020. Important to be registered / subscribe to a tender alert service to ensure that you do not miss opportunities. Requirements for Contracting Authorities to advertise on Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI remain unchanged.
- Technology: We are already seeing evidence of buyers looking for bidders to articulate how they will harness recent technologies to deliver efficiencies and improvements. Expect bid questions on Robotics, Artificial Intelligence, Automation/Digitisation, Machine Learning, Blockchain and the IoT (Internet of Things).
- Working Patterns: 2020 has shown that many types of work can be delivered remotely by home working staff. Buyers will want to understand the implications for their service and also some assurance that suitable working arrangements are in place for your staff.
- Environmental Sustainability: COP26 (the UN Climate Change Conference) is due to be held in November in Glasgow. We are in a climate emergency and buyers are dialling up their expectations of bidders’ environmental credentials, seeking evidence of carbon reduction and offsetting measures, waste reduction and commitments to reusing and recycling materials.
- Business Continuity: This has been severely tested for most organisations during 2020. You will now have evidence of how you can cope in emergency situations but will need to be sure that your business continuity plans cover known and emerging risks.
- Economic & Financial Stability: Whilst buyers have traditionally tended to focus on the last 2-3 years’ audited accounts, these may say little about recent and future financial stability. Expect more forward-looking buyers to probe into the current year management accounts and be prepared to provide evidence of reserves and borrowing capacity. Keep a weather eye on your credit rating for early warning of any potential issues buyers may have with your financials.
- Diversity & Inclusion: Focus on bidder commitment to diversity has been growing for several years. However the death of George Floyd in May 2020 and the increasing prominence of the Black Lives Matter movement has seen this climb up the agenda. Watch for gender and ethnicity pay gaps. For example, BBC News recently reported that black workers at one of the main UK banks are earning a fifth less than other colleagues. Buyers are now looking to see diversity being evidenced at both employer and supply chain levels. Additionally, gender balance at all levels in organisations is also being examined. There are some really positive examples e.g. the work that Amos Simbo and the Black Professionals in Construction Network is doing.
- Supply Chains: Both COVID-19 and Brexit are putting huge strains on supply chain arrangements especially where these involve EU suppliers. Be prepared to set out the steps you have taken to ensure continuity of supplies. Buyers love hearing that your supply chains are mainly UK-based as this lowers the risk of supply chain shortages / failures.
- Public Sector Investment: The UK Government will be investing in tackling both COVID-19 and its effects including support for businesses; construction and infrastructure; Green Industrial Revolution projects especially focusing on decarbonisation; and levelling up in England whilst supporting the devolved administrations with consequentials funding. Local Authorities and Housing Associations will also be increasing investment in both the delivery of new homes and the decarbonisation of social housing stock.
- The Construction Playbook: This was published by the UK Government Cabinet Office on 8th December and captures commercial best practices and specific sector reforms outlining the government’s expectations of how contracting authorities and suppliers, including the supply chain, should engage with each other. These are set out in 14 key policies for how the government should assess, procure and deliver public works projects and programmes which all central government departments and their arms length bodies are expected to follow on a ‘comply or explain’ basis.
- Cyber Security: Thieves no longer have to break into your premises to steal some of your most valuable assets. Cyber crime and protecting against it have assumed increasing importance to buyers. They generally expect to see some external standards being in place e.g. Cyber Essentials, Cyber Essentials Plus or ISO 27001 Information Security Management. It will become increasingly difficult to get public sector contracts without having some of these in place. Also, your cyber security arrangements now need to extend to employee home networks due to remote working. IT infrastructure could potentially be a trend in itself.
- Accreditations: Having independently assessed standards (especially ISO standards) that you work to in key areas such as Quality Management (ISO 9001), Environmental Management (ISO 14001), Occupational Health and Safety (ISO 45001) and Business Continuity Management (ISO 22301) will help passport you through the selection stage questions covering these topics. Indeed some public sector contracts have some of these standards (or their equivalents) as mandatory criteria for some contracts.
- Social Value: Whilst this first came to prominence in the Public Services (Social Value) Act in 2012, it will come much more to the fore in UK government contracts tendered from 1st January 2021 onwards with the requirement for contracts over £10 million in value to carry a social value weighting of 10% of the total score. Social Value has also been more clearly defined with themes, policy outcomes and delivery objectives i.e. what good looks like.
- Unregulated Procurement: In November, the National Audit Office reported on the many unregulated procurements that had been undertaken due to the Covid-19 pandemic. It found that over half of the £18 billion spend on PPE had been awarded directly to suppliers with no competitive processes. There was also a lack of transparency around how the contracts were awarded as well as evidence of a VIP channel for receiving direct awards. It would appear that there was little evidence in place of appropriate checks and balances to ensure that conflicts of interest were avoided. Expect to see a greater use of frameworks and dynamic purchasing systems especially those with direct award call-off options that could help to mitigate against these types of situations in future.
- Post Grenfell Impacts: The ongoing Grenfell Inquiry is revealing what happens when procurement and value engineering goes wrong. In a race to the bottom on price, procurement was not able to assert itself in terms of ensuring both the quality of materials and the quality of workmanship. Procurement works best when it is at the table at a strategic level in both client and supplier organisations in ways that allow it to get involved in examining the market properly including looking at factors such as quality, safety, service and price. Expect to see more challenge from buyers in all of these areas. Procurement professionals are much more than compliance checkers/auditors and they are like to be playing an increasingly role in all stages of the buying process.
- Scottish Independence: The SNP Scottish Government will be fighting the May 2021 Holyrood elections with Scottish independence and a second referendum as their main policy. An SNP victory will see a demand to the Westminster Government for a second referendum. For longer-term contracts, bidders to Scotland-based buyers may need to evidence how they would deliver the contract in an independent Scotland. Bidders from Scotland may also need to demonstrate this for non-Scottish contracts. It will be important to check contracts for change control provisions which may help with any additional costs.
- Bidding Profession: The Association of Proposal Management Professionals (APMP) is the bid world’s professional standards and certifying body. In 2020, its membership surpassed 10,000 globally. There is now an increasing recognition of the benefits that bid and proposal professionals can bring to a bidding function. The profession itself is also becoming more outward-facing as it looks to recognise the role that a range of disciplines coming together play in work-winning. APMP has also been quick to pivot to virtual offerings as well as being highly supportive of its members during the pandemic. Formal and informal networks of bid professionals that have started up in 2020 are likely to continue to provide mutual support and friendship for those who enjoy meeting other members of the bidding ‘tribe’.
- Industry Events: Whilst industry events such as conferences and meet the buyers days have been virtual in 2020, there is an appetite for a return to in person events when it is safe to do so. If the vaccine roll-out and the protection offered has public trust, then expect to see the return of physical events. Realistically, this may take until the second half of 2021 before we see events on any scale. Also, successful events in the ‘new normal’ may be hybrid – offering both in person and virtual participation opportunities.
- Outsourced Bidding: With the sharp decline in public sector tenders coming to market in March-August 2020, many organisations reduced the size of their in-house bid functions. Some have now adopted a more flexible approach which includes external bidding specialists and interim bid staff helping at peak periods. In addition to lowering the cost of standing resources, they are also experiencing the benefits of the fresh perspectives and expertise that external resources can bring.
So, in summary, there is quite a lot that will be new in 2021 for the bid world to get to grips with. Watch out for work-winning broadcasts throughout the year on Andrew Morrison’s LinkedIn channel.
- Andrew Morrison and David Gray, are directors at AM Bid and both qualified in social housing and bidding