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Exclusive subcontracting
by Daniel on 15 Apr, 2008 in
The Q&A document (Q66 in the Procurement section) states 'Sub-Contractors should not be pressured into exclusivity arrangements with Prime Contractors. DWP would appreciate feedback from sub-contractors who have been approached in this way.' I was speaking with one of the DWP people running the FND procurement process at the briefing last week, and asked about this approach to exclusivity, drawing on an experience I had a while back.
I was bidding for a project and met a potential subcontractor who'd been given the strong impression by a large third sector provider that they would have to tie themselves to a single prime. When I gave this example, the advice I got was illuminating:
- Most of the areas up for tender are customer choice districts
- It's important for there to be actual competition that the same organisations don't deliver for both providers
- There have been a number of DWP experiences in the past of the same subcontractors being used for everything, with the end result that whoever wins a bid, the only thing that changes is the name above the door
- Therefore, they're fine with exclusivity at the ITT stage, but would regard it as counterproductive during PQQ bidding
The argument as stated is perfectly sensible, but I'm not sure how it fits with the Q&A guidance, plus it could lead to monopoly situations if one provider locks in essential partner organisations. What do you think?
I've never hit any problems speaking with different providers during bidding, so far at any rate. Is that going to change this time round?
Be sensible when considering exclusivity - it has value. Take into account your market e.g. are you the only provider of that service, how important is that service to the contract, how likely is the prime contractor to win, etc.
If you hold a strong position then the prime will accept non-exclusive support. If you are not so strong or face stiff competition then you should still approach the other shortlisted prime contractors and see what they will offer. Offer exclusivity only in return for a better deal (i.e. more funding).
A prime contractor's bid will be worth much less if they cannot show a) good supplier management/relationships and b) the ability to deliver the best service.
Think clearly about your offer and pitch it professionally.
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