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Delivering the optimum commercial and procurement solutions on time and on budget for the British Business Bank

12th Aug, 2021

The British Business Bank plc  is a state-owned economic development bank established by the UK  Government, and owned by the Department for Business, Energy and Industrial Strategy (BEIS).

The Challenge

We were approached by the bank whose aims were to increase the supply of credit to small and medium enterprises and to provide business advice services to help them to succeed. The Start Up Loans Company (SULCo) is a part of the Bank and its mission is to make business ownership viable for individuals who struggle to raise finance via traditional means, by providing loans and support for new or early stage businesses. SULCo administer the loans via Finance Partners and the contracts for the two incumbent providers were due to expire by June 2020.

The Bank determined that the arrangements and associated delivery model should be brought up-to-date and be recompeted to align with the expiry of the existing agreements. The Bank invited Gemserv to provide specialist procurement advice, oversight and support services for the SULCo Finance Partner Procurement, in order to assist them in delivering an OJEU-compliant procurement and therefore minimise the risk of any procurement challenge.

Our Approach

In collaboration with the Bank’s Product, Procurement, Risk, Internal Audit and Legal teams, the Gemserv team were able to help in delivering across the following key areas.

Procurement Strategy

An effective Procurement Strategy to take into account the Bank’s overall business needs, with a new delivery model for SULCo, providing a degree of flexibility prior to procurement launch. The development of the strategy covered a range of areas and a number of issues to be addressed, including:

  • The evolution of SULCo’s delivery model and determining how the Bank could legitimately award contracts for two distinct services to one or two service providers;
  • Managing incumbent advantage – the two existing Finance Partners and the Bank’s outsourced Debt Collection Agency were likely to submit tenders for the new contracts;
  • Determining the most appropriate procurement procedure by taking the governance and key stakeholder groups through a facilitated workshop using Gemserv’s Procurement Routes Decision Framework;
  • Understanding the market’s appetite for the new arrangements, the proposed commercial model and fee structure, and to garner potential suppliers’ feedback;
  • The creation of a cost and revenue model for loan management and debt collection to ensure the pricing model and associated tender requirements met the business need;
  • The Bank’s ability to manage the number of Tenders passing through the selection phase by implementing a “gating” process for the evaluation activities under the Open Procedure;
  • A two-stage pre-market engagement activity, incorporating two regional face-to-face client-supplier events, and a follow-up questionnaire issued to the supplier market, used to further inform/confirm the overall requirements and approach;

Tender Preparation

  • A series of facilitated requirements workshops to develop a collection of requirement materials, specifications and standards, including the assimilation of pre-market engagement responses and the development of associated tender materials;
  • A suite of clear and comprehensive procurement deliverables, setting out the Bank’s principal requirements, and agreed with the Bank’s key stakeholders, including risk, internal audit and legal;
  • The design and development of all Tender documentation, including liaison with the Bank’s external legal advisors to obtain their sign-off;
  • Membership of and support to the Bank’s governance and assurance function to facilitate decision-making;

Evaluation Preparation

Oversight and management of the preparation and development of all evaluation materials, including:

  • Design and engineering of the Evaluation Model, incorporating key weighting requirements, compliant scoring rationale, and a comprehensive set of instructions for its use during the tender evaluation phases. The design and development included the complex task of developing and incorporating the underlying calculations to determine the overall evaluation outcome: either individual or combined lots, as per the strategy;
  • Development of the Evaluation Methodology, including the implementation of enhanced processes to streamline the evaluation phases, which in turn reduced the risk of not reaching consensus and minimising any potential moderation issues;
  • Production of key evaluation documents, tools and templates to facilitate and support the entirety of the evaluation activities;

Managing the Competition

  • Development and coordination of a procurement-launch supplier event, including the oversight of all presentation and FAQ materials and facilitation of supplier-client engagement at the event;
  • Management and oversight of all pre-Tender and evaluation clarification matters;
  • Preparation of all evaluation briefing materials and subsequent delivery to the entire evaluation team prior to the commencement of evaluation;
  • Oversight of all evaluation activities, including compliance, consensus & moderation activities, including providing the key roles of Consensus chairperson and Moderation chairperson;
  • Development of the Procurement Outcome Notification letters to successful and unsuccessful tenderers; and
  • Support for the development of the Bank’s “external audit” file, capturing all key procurement documents, decisions and instructions.

In delivering all of the above, we ensured that the risk of challenge from any unsuccessful tenderer was minimised.

The Results

With Gemserv’s input, and following an OJEU-compliant process, the Bank appointed a single Finance Partner to deliver both components of the services, on time and within budget, and with no procurement challenge. We completed a comprehensive handover of all materials to the Bank’s staff in readiness for the execution of the contract documents.

Developing and delivering a specialised procurement methodology can be arduous, but through Gemserv’s commercial and procurement expertise, we were able to take the stress out of the process and deliver a successful, cost-effective procurement for the British Business Bank.

If you’re interested in finding out more about our procurement services click the link below or contact bd@gemserv.com

Authors

Mike Entwistle

Managing Consultant, Commercial and Procurement

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