Frequently asked questions: Commercial Strategy and Policy

Why has responsibility for employment programmes moved from Jobcentre Plus to the DWP?

Responsibility for employment programmes delivered by external providers was transferred from Jobcentre Plus into the centre of the Department from 1 April 2007. The transfer is part of our developing business strategy for the Department as a whole

This change will clarify roles, with the Department taking responsibility for the provision we buy in the external market; and Jobcentre Plus focussing its expertise on the services it delivers directly to customers.

How can we find out about contracting opportunities?

All opportunities to tender are advertised on our website under Opportunities to Tender . This is to promote fair and open competition in accordance with public procurement policy and EU Regulations, and in line with that we welcome bid equally from the private, public and voluntary sectors.

Why do we have to compete for contracts?

It is vital that we do compete our contracts, on the basis of rigorous, objective and fair criteria, because we must make sure that we achieve the best possible level of service for our customers for the resources available to us. As a government department we have an obligation to ensure the contracts awarded using public monies offer the best value for money in terms of price and quality of services.

What approach is taken to contracting?

Our overall approach to contracting takes full account of our commitment to achieve year on year savings as part of the Government’s Efficiency Challenge. We aim to reduce the number of contracts we award through aggregation across wider geographical areas and/or types of provision making them larger, and so offering a more viable package for providers. Wherever possible, we seek a single provider (prime contractor) to deliver and manage services across a District or wider geographical area, using sub-contractors where appropriate.

What is the definition of a “Prime Contractor”?

“Prime Contractor” describes an arrangement where DWP contracts with a single organisation to undertake the following three functions:

• to provide directly some services
• to sub-contract some services to other organisations; and
• to manage the payment and performance of the sub-contractors

The prime contractor model can also include a consortium arrangement where one organisation acts as a lead contractor on behalf of a number of providers in partnership.

What is the procurement process?

We usually adopt a two stage procurement process. The first stage involves all interested bidders submitting a short Pre-Qualification Questionnaire (PQQ). These are then evaluated and the highest scoring bidders are invited to submit a full second stage tender proposal.

Using a two stage procurement process helps to ensure that only providers who are best able to deliver the service are asked to put time, effort and resources into producing full tender documents.

At the end of the tender process preferred bidders are required to be formally accredited by an independent organisation, Momenta, before they can be awarded a contract.

This process involves checks of an organisation’s financial and legal status, health and safety policies, and compliance with equality and diversity requirements. Organisations that have been awarded DWP contracts have successfully passed those checks.

How are the different needs of customers met?

DWP actively encourages an innovative and competitive marketplace and works with larger providers to ensure that they understand the need to achieve diversity in the service delivery and that optimum use is made of the specialist services offered by smaller providers.

As part of the tender evaluation process, we ask bidders to tell us how they will fully meet the varied needs of all customers; it is unlikely that any one organisation could adequately demonstrate their ability to meet all of these needs without some specialist support.

In addition, we ask bidders to give details of all their sub-contractors in their tenders and we take into account the skills and experience of the sub-contractors during the tender assessment process. It is therefore in the interest of potential prime contractors to engage with suitable specialist organisations to enhance their delivery.

How can smaller organisations get involved in delivering employment provision?

We publish lists of successful providers on our website when tendering exercises are complete. Although successful providers will have already chosen their sub-contractors they may choose to add to or change them, with prior approval of DWP, at any time during the life of the contract. It is therefore open to you to approach prime providers to discuss the possibility of involvement as a sub-contractor, although this is entirely a commercial decision for prime contractors to make. Details of the current New Deal providers can be found on the Jobcentre Plus website.

What criteria are used to evaluate bids?

The criteria for the evaluation of bids are published on our website at the very outset of any competition so that all potential bidders are aware of the basis on which the tenders will be scored.

Typical evaluation criteria are:

• Performance, Skills and Experience of Prime Contractor, Partners and sub-contractors and Proposals for Delivery
• Organisation Infrastructure Management and Capacity
• Human Resource and Quality Standards and Evaluation
• Implementation Plan and Premises
• Record Keeping and Administration

The bids are assessed thoroughly by experienced and professionally qualified procurement specialists.

What are the funding arrangements?

Our long-term aim is to move away from the current arrangements we have of paying providers on existing look-up table rates (payments are made per individual for each week they are on provision) and instead to pay for the service that is delivered. This would provide contractors with an element of fixed income irrespective of the number of customers accessing their provision.

At the start of any new procurement exercise, the available funding is published to all potential bidders. Regardless of the funding arrangements, it is the responsibility of providers bidding for competitive contracts to submit bids on not less than a full cost recovery basis. Voluntary sector organisations in particular need to ensure that they do not unwittingly bid on a loss-making basis and therefore need to be clear about the costs involved in providing services.

Any funding arrangements made between prime contractors and sub-contractors are, of course, a commercial matter between the organisations involved. DWP however requires evidence that all potential partners and sub-contractors are aware of their roles and that they have agreed the proposed payment arrangements with second stage bidders.