The Waiting Game: Who are the slowest buyers in the UK?

The Waiting Game: Who are the slowest buyers in the UK?

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Research by OpenOpps.com shows that the procurement process is least efficient in the NHS, where tender awards take longer and bidders are given less time to respond to tenders.

Open Opps analysed over forty six thousand tender and contract notices to determine how long it takes organisations to go from publishing a tender notice to awarding a contract. This is a useful metric to analyse, as it serves as a proxy for organisational efficiency, but also has an impact on the bidders, particularly smaller companies, who thrive on the cash-flow benefits of being able to do deals quickly.

Our research shows that it takes an extra month and half for the NHS to go from tender to contract than it does central government.


Sector

Avg Timeframe (days)

NHS

128

Housing Association

113

Public Corporation

109

Local Government

93

Private Limited Company

88

Central Government

82

Education

82

Of the five slowest tenderers is government, three are part of the NHS, while a fourth operates catering procurement, often on behalf of the NHS.

Tenderer

Sector

Avg Timeframe (days)

Bid to award ratio

Department for International Development

Central

222

1:3

The Litmus Partnership Ltd

Private

206

1:5

NHS Shared Business Services

NHS

204

1:5

Commercial Medicines Unit

NHS

189

1:5

NHS Supply Chain

NHS

188

1:7

Bracknell Forest Council

Local

187

1:5

Department for Work and Pensions (DWP)

Central 

169

1:5

Royal Borough of Greenwich

Local

155

1:4

Suffolk County Council

Local

149

1:3

London Borough of Hillingdon

Local

136

1:5


DFID is the clear outlier, with a typical tender time of 222 days, 53 days higher than the next highest central government body, the DWP.  The rest of the top five is made up of bodies that perform procurement functions on behalf of the NHS.

The Litmus Partnership is a catering and facilities consultancy that often runs catering tenders on behalf of government bodies. NHS Shared Business Services is a joint venture between the Department of Health and Sopra Steria to run back office services for the NHS and NHS Supply Chain performs some procurement activities on behalf of NHS Shared Business Services and is run by DHL Services. The Commercial Medicines Unit works on behalf of the NHS and the Department of Health to buy pharmaceuticals.

Not only are these buyers the longest at issuing tenders, but 7 of the top top have a bid to tender response ratio of 1:5 or over. Bid to tender response ratios are the time given to buyers to submit a bid compared to the time taken to award a contract by the tenderer and most organisations have a ratio of less than 1:3.  Ratios of over 1:5 mean that bidders have to wait more than five times longer than the time they are given to respond to a tender to receive the decision on who won the tender.

Slow tenders are often caused by complex  bidding requirements. Complexity forces suppliers  to respond with hundreds of pages of documentation, which then burdens the bid assessment team who must evaluate multiple versions of the material required in the ITT before they can award. This complexity is also toxic for SMEs, who lack the resources and cash-flow to respond to complex bids.

By contrast, the fastest tenderers in the public sector are:


Tenderer

Sector

Avg Timeframe (days)

New Forest National Park Authority

Local

32

Cumbria County Council

Local

36

Department of Energy and Climate Change

Central

43

Falmouth Exeter Plus

Education

44

The Business Growth Hub

Private

47


Although this could indicate efficient tendering, it could also reveal that the procurement team is not taking the time necessary to evaluate bids and make contract award decisions.

Conclusions

Long, complex tenders with drawn out waits for contracts disproportionately disadvantage SMEs because cashflow issues are more pressing for them.

Tender timeframes are worst in the NHS, where often procurement being performed on its behalf by other bodies, some owned by the government and others run privately. This shows outsourcing in the NHS is not as efficient as we would have hoped. The NHS supply chain tender is coming up for renewal, the NHS might wish to include the bid to response ratios as part of any future contract service level agreement.

Poor practice in the DFID should also be cause for concern, especially as central government as a whole is performed well. DFID should learn from and replicate best practice from similar bodies.

The full results are available here: 
https://docs.google.com/spreadsheets/d/1Tmu86g8wFysvckZWxWj86kCFphcgZnQ0FZNHWjxRoFY/edit?usp=sharing.



Contracts Finder only contains contract award data for 27% of tenders. Of these tenders, many did not have accurate tender start or award start dates. This analysis was only conducted on the entities with 20 or more tenders and valid tender start and award start dates. This means that, although we have identified some examples of poor practice, the named tenderers are in fact the ones publishing the most reliable tender and award data. This lack of data shows that some oversight is required

If any representative of the mentioned organisations wishes to get in touch with a correction, we will happily update the article.




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