DWP Bidding Opportunities - Event Report

Before each presentation at this event, the speaker often apologised to existing DWP providers that they would probably repeat a lot of information they already knew. Despite this, it was a useful day even for them. The reason? There was over an hour of Q&A with the most senior contracts people in the DWP. I've put together a rough outline of the presentations, and the Q&A. The DWP will publish the slides from the presentations on the 6th of March.

The Shape of Things

1. Jillia James talked about the Commissioning Strategy
2. Alan Cave outlined the wider context and went through the upcoming bid rounds
3. Simon Shimmens talked about his review of commissioning and management building on FND phase 1, and gave some highlights of ways future commissioning would be improved
4. James Jennings didn't give a presentation, but offered specialist support on setting up Special Purpose Vehicles
5. The Q&A - any and all questions about bidding and contracts

Commissioning Strategy (Jillia James)

Jillia* James talked about the Commissioning Strategy. I've previously outlined it here, so no need to repeat. Localisation seemed a bit more prominent than it used to, but could be my imagination.

*Apologies if I got the spelling wrong!

Welfare Reform & Upcoming Programmes (Alan Cave)

Employment is down 45,000 this quarter, and 0.7% on the year. However, Jobcentre Plus and welfare-to-work are still very productive: JCP take 10,000 vacancies every working day and have 500,000 on the books at any one time. 300,000 new claims were made this month, but 240,000 also left benefits.

Although there's a lot of focus on responding to the recession, Alan was adamant there would be no let-up on allowing new long term unemployment to emerge. He pointed to the Welfare Reform White Paper as the key document outlining the delivery agenda. He then brought out some of the principles underlying welfare reform (capability, contribution and control) and a few specifics such as the black box approach, personalisation and risk sharing.

Then he moved on to the contracts. By 2011 200 new contracts will have been awarded, mainly outcome focused, and worth £4bn-5bn in total. These include:

• FND – The government is absolutely committed to bringing in FND, absolutely on track to be delivering this year. The second phase starts this spring, and delivers Oct 2010. He quoted a budget of £0.5bn / year
• JCP Support Contract – Flexible support framework for JCP advisers to pull down vocational services, starting December 09
• IDEAS – Replacing various ill-coordinated disability programmes, starts Oct 2010, PQQ Spring 09
• ESF 2007-2013 – Opportunities for disadvantaged groups, Dec 09 start
• Progress to Work & Link-up merging – substance misusers programme, didn't catch the dates!
• Work For Your Benefit – Starting as a pilot, PQQ Summer 09
• Invest to Save Pathfinders (AME-DEL) – 5 regions will pilot support for long-term IB claimants, with providers paid from benefit savings refunded by the Treasury
• Personalised Employment Programme – PQQ Autumn 09 for this combined benefits programme for JSA and ESA in two FND phase 2 areas
• Pathways to Work – Continues delivery, but the white paper will result in contract changes. Changes will be worked through in the coming months. There was no mention of underperformance, although the white paper may provide a useful mechanism to respond to this.

Looking at the wider model, Alan saw the contracts as providing a national 'spine'. Especially with FND phase 2, the DWP were looking to add a local dimension to this spine. This includes making local organisations part of the commissioning process.

Through the next 3-4 years the DWP contracts will act as controlled experiments of different approaches, e.g. PEP try joining up benefit groups and apply differentiating pricing model, AME-DEL testing whether benefit recycling really works. This means the next round in a few years will be evidence-based.

Bidding and Contract Management (Toni Percival)

Toni works in the DWP Commercial Employment provision as Head of Supplier Management ,but is moving to become Head of Sourcing shortly. She outlined the basics of contracting with the DWP. Some of the interesting points include:

• An explicit commitment to maintaining a diverse supplier base, that is ensuring that smaller providers aren't squeezed out and that subcontracting works
• Recognition of particular issues with IDEAS, as it's replacing a framework of legions of small providers providing specialist support
• Competitive Dialogue may be used for complex programmes at a future point, a discussion-based process newly allowed under European procurement rules
• Use of Most Economically Advantageous Tender (MEAT) as the bid award criterion, so the cheapest doesn't always win.
• Continuing with the PQQ then ITT process for most procurements, with a 1 stage process for small, simple procurements
• Continued payment on the service fee / 13 week job outcome / 26 week job sustainment model for most programmes, with recognition that IDEAS will require something different
• A standard procurement process length of 18 months from PQQ publication to delivery start
• Advertising of tenders in national publications likely to be read by potential bidders (I'm waiting for the phone call!)

Lessons Learnt - Review of Commissioning (Simon Shimmens)

Simon Shimmens carried out a comprehensive review of the Commissioning Strategy with reference to FND1, with some extra consultation on the IDEAS project. The review produced 22 recommendations, and is available through this page on the DWP website.

I'd recommend looking at the report directly, but some highlights picked out by Simon include:

• More events and forums to improve communication between contractors and the DWP
• External support to subcontractors, for example the SPV support by James Jennings
• Changes to the TUPE arrangements
• Changes to the commissioning process, e.g. greater provider involvement in contract design
• Simplified PQQ and bidding paperwork, removing duplication from information-gathering
• Smaller Q&A log for future procurements!
• 3 key findings on the Code of Conduct to give it teeth, an independent ombudsman, and accreditation piloted over the next two years by an industry-led advisory board

I may write a better outline of this review up when I get chance!

Q&A (all speakers, plus James Jennings)

These are very rough notes on the Q&A session. I'll tidy them up over the weekend, so you might want to hold off reading this until Monday!

Richard, RLSB.

1. One large supplier each area – FND more than one subregional, varies with programme
2. No mechanism that primes mirror payment structure, but what happens if primes consistently undervalue delivery? – Alan needs to see delivery and reward model for subcontractors as part of bids, will judge whether it’s sustainable or will risk the supply chain

Mukesh Oza, Talent / Calder

1. New Deal etc. address different demography. What will replace this? Alan still has NDMusic etc. All replaced with one flexible programme. Likewise one programme for ESA entrants. Don’t want overspecified and overregulated.
2. Bidwriting. DWP already has lots of provider info eg performance, will take into account when scoring bids? Toni operates under EU rules, and must provide open transparent level playing field for all bidders. Therefore can’t use track record?!

Andy McBurnie, Impact Psychology

1. Smaller orgs can bid separately to prime, smaller orgs cannot bid. Jillia(n) agrees. Toni says how find large contractors, say lot of that already happened as eg one prime approached by 500 orgs. Speed dating etc. Possibly some more that we could do. Make current contract holders public to improve contactability
2. Compared to 2012 sub-bidding where gets put into central list

Sean Williams, Serco

1. FND tendered on price and performance, issues w/ economy. EZs and ND tendered on fixed price then performance. Any changes to model in future. Alan says FND is model for future.

Robert Elston, Status

1. Welcome Code of conduct. Unsure about it having teeth. What can it have? Power all with primes, can’t see it working. Simon says dynamic in supply chains that primes lose power as it develops. Not supporting supply chains well => bad reputation => subcontractor power by not using them. Some primes don’t direct deliver hence don’t have interest in supplanting. Some sharp teeth in terms of evidence that primes are providing adequate support or passing on undue risk. 360 degree reflection on primes from their supply chain, which will potentially be accessible to future bid markers. Toni says will be talking to primes and subs, get feedback then take up with prime.

Kim Lovell (?), First Group

1. Subcontractors. Process laid out for publicising contracts, so how do primes to subs? Eg small provider support site. More proactive. In the market for those suggestions! Toe in the water in 1st Stage FND. Supports action plan. Concept for web portal to allow primes and subs to communicate and position themselves.

Roland, Salvation Army

1. Referral process – ESA JSA complex needs go to IDEAS how? FND contractors would deal with range of barriers. Progress to Work fits in how?! Alan says JCP adviser handles referrals, eg DEA for IDEAS. Adviser navigation tool to enable ESF etc. handling. JCP referral at 12 months to FND then that’s it! Pathways decisions an example of problems.

Jim Carley, Carley Consult

1. Lots of PQQs. Will DWP apply consistent PQQ model cf FND1. Single PQQ/yr? This Spring? Toni says Consistent yes. Multi-programme PQQ under development but only where can. Simon signed up to multi but mechanics need work, not for first contract rounds but in ASAP otherwise. Below that already changes to remove replication.
2. Where leave MOMENTA? Part of existing processes that need revising.

Hamish Robertson, CDG

1. Working capital across bidding for several contracts. Many out now, what will be expected to do in terms of calculating across range of bids. Toni take info given to us cf existing delivery and expected contracts. Won’t happen at exactly same time. Look across and take into acct total exposed business. Give info as current as possibly can.

Unknown (later revealed to be from Leaside Regeneration)

1. Welcome idea of devolving power to others, but public sector has reputation for incorporating private sector bad practices & lead to monopolies. Want to implement free market principles, but give power and money to monopoly services without checks and balances? Alan creating unaccountable power, assure that there are plenty of checks and balances and active mgmt, custodian role. Contract mgmt framework has detailed and active engagement.

Bernard Dainton, Independent Bid Consultant

1. Indication of approximate sizes of primes, minimum sizes of orgs to have one. Alan says FND at top end £8m/yr minimum. IDEAS £2-5m/yr. ESF smaller still.
2. Rules about size of org. Eg LDA won’t give more than 50% of current turnover. Make judgement individually.

Robert Elston, Status

1. SPVs – follow-on went to Dec briefing, told they’d give specialist help. Took 3 weeks to get first reply, told you’ll have plenty of time. BUT orgs won’t have much time, ave. SPV takes >18 months to form. So need a lot of help. James act of setting up SPV is v quick, but getting to that point takes a lot of time.

Amanda McIntyre, ERSA

1. Represent independent providers of welfare-to-work. Observations: To ensure good relnships between primes and subs. Most primes did run competitions that mirrored DWP competitions. PQQs and bidding forms, sent out invites. The portal that is explored could be incredibly invaluable in cutting down effort for everyone, so pushing forward. Could be invaluable when it comes into the life of the contract. Relationship must be one of adults not parent-child. Likewise primes and subs. Beginning of journey here.

Helen Robinson, Salvation Army

1. SPVs PQQ process. Don’t have SPV ready, but must have outline within 5 weeks. James saying it’s happening right now, because identified right now.

Ali Khir (?), Leaside Regeneration

1. Germany and US work for your benefit programmes not worked. Alan says pilot, only for end of FND. Looked elsewhere, Dan Finn has fed into this.

Richard, RLSB

1. Advantages to SPV

Rehab UK

1. What happens to subs if primes fail? Toni says not one simple single answer. Org would work with them and receivers, and come up with best solution for continuity of support and service. E.g. Direct contracting to subs or handing prime contract elsewhere
2. Work with acquired brain injury. Rehab as well as vocational. => PCT and other funding. Joining up v live topic.

Me

1. Will the DWP engage with existing (online) stakeholder communities or develop its own in-house one? Alan says they're looking at all possible approaches, but would want to ensure that a portal was properly conducted. The inference was that this would need to be either in-house or subject to strict rules or control by the DWP.