Archived decisions

Contact: Alan Edwards 01962 847158 [email protected]

1. Summary

1.1 The following decisions are sought:-

a) That the Executive Member receives and accepts the outcome of the consultation

b) That the Executive Member approves the following as the appropriate criteria for the use of single tenders:-

i) where the provider is a specialist provider that is required to meet the specific needs of a client, or group of clients;

ii) As an interim arrangement whilst a service is being reviewed or is in transition, for example the move to self-directed support;

iii) where joint contracts with other agencies represent demonstrable value-for-money for the County Council;

iv) where the provider is service user and/or carer led and that this adds value to the provision;

v) where there is a need to pump prime a new or innovative service;

2. Reason

2.1 This report supports all the corporate strategies as it will be applicable to all social care contracted services which by their nature will be designed to deliver safe services, maximise well-being and enhance quality of place.

3. Other Options considered and rejected - None

4. Conflicts of Interest declared by the decision maker or other Executive member consulted - None

5. Dispensation granted by the Standards Committee - None

6. Reason(s) for the matter being dealt with if urgent - Not applicable

Approved by:............................. Date:.................

Councillor Felicity Hindson

Executive Member for Adult Social Care

Hampshire County Council Item 3

Executive Member for Adult Social Care

25 April 2008

Revision to Single Tender Criteria for Award of Contracts

Report by the Director of Adult Services

Contact: Alan Edwards 01962 847158 [email protected]

1. Summary

1.1 At the Social Care Executive Decision Day on 27 July 2007, it was agreed to consult the voluntary sector on the proposed revision of single tender criteria in respect of award of contracts.

2. Recommendations

2.1 The following decisions are sought:-

a) That the Executive Member receives and accepts the outcome of the consultation

b) That the Executive Member approves the following as the appropriate criteria for the use of single tenders:-

i) where the provider is a specialist provider that is required to meet the specific needs of a client, or group of clients;

ii) As an interim arrangement whilst a service is being reviewed or is in transition, for example the move to self-directed support;

iii) where joint contracts with other agencies represent demonstrable value-for-money for the County Council;

iv) where the provider is service user and/or carer led and that this adds value to the provision;

v) where there is a need to pump prime a new or innovative service;

3. Links to Corporate Strategies

3.1 This report supports all the corporate strategies as it will be applicable to all social care contracted services which by their nature will be designed to deliver safe services, maximise wellbeing and enhance quality of place.

4. Impact Assessment

4.1 All contracts must comply with principles of non-discrimination, and there will be Impact Assessments for all the services concerned. Under European Union (EU) Treaty requirements, contracts must be subject to a degree of advertising sufficient to ensure that non-competitive practice does not apply.

4.2 Each service will be Impact Assessed.

4.3 Corporate work is being undertaken on Impact Assessments for contracts.

5. Proposed Single Tender Criteria

5.1 The proposed single tender criteria which formed the basis of the consultation, as outlined in the report of 27 July referred to above, were:-

- Specialist Provider - where there is clearly no alternative provider;

- Initial `pump-priming' to enable new and innovative services to start, but

tendering to be considered if the service is to continue after the initial pilot

period;

-Interim arrangements whilst a service is being reviewed, subject to evidence of a review programme;

- Where joint contracts with other agencies represent demonstrable value-for-money for the County Council

- Service user led and community based services which give added value;

5.2 It was also proposed that the single tender criteria should have regard to:-

· those situations where there is clearly not an alternative provider and having to consider bids that are not sustainable

· protecting community based services

· protecting service user led services

· the need to continue to demonstrate Best Value through cost and quality tests.

5.3 There was also a requirement to ensure that all contracts comply with principles of non-discrimination and, under European Union (EU) Treaty requirements, be subject to a degree of advertising sufficient to ensure that non- competitive practice does not apply.

5.4 It is necessary to consider the impact on service users of tender processes,

eg where a beneficial relationship with a carer has developed. It is also recognised there is a need to consider the sustainability of smaller organisations, in terms of their capacity to tender and the attainability of contracts due to the scoping or sizing of tenders. These issues will be addressed through the scoping and specification of services and the tender evaluation criteria.

5.5 All reasoning for applying the criteria will be evidenced and recorded.

6. Consultation Process

6.1 The consultation process took two forms, e.g.:-

· All voluntary providers delivering contracted services were invited to a Workshop at Shawford Village Hall on 1 October 2007;

· A questionnaire was posted on the County Council's web site for a three month period.

7. Responses

7.1 A full report of the Workshop which was attended by 22 voluntary organisations is attached to this report as Appendix A.

7.2 Key points arising from the Workshop in relation to the proposed criteria.

- the definition of grants/contracts respectively;

- the most appropriate method of pump-priming new services, i.e. grants or contracts? A straw poll of delegates clearly showed that, if organisations were told that services had to be tendered, it would be viewed as unfair, possibly less effort expended in developing the service and perhaps raise issues about intellectual property rights;

- the ability of voluntary organisations to cover the costs of tendering; many felt they would need support in drafting a tender bid;

- a discussion on added value confirmed the need to have regard to protect service user led and community based services, and also to empower service users and carers;

7.3 The questionnaire posted on the website resulted in only two responses from organisations. The key issues identified were:-

- fears that competitive tendering could put smaller organisations at risk;

- the most appropriate mode of pump-priming;

- the added value provided by voluntary organisations;

- impact on service users from a more competitive process;

- opportunity for service users to become involved in selection;

7.4 Despite the very low response to the questionnaire, the comments made duplicated to some extent those made at the Workshop.

8. Legal Implications

8.1 The proposed single tender criteria which formed the basis of the consultation with the voluntary sector were agreed with the County Council's Legal Practice. There will be a need to ensure Best Value through cost and quality tests and to undertake an appropriate level of advertising to ensure that non-competitive practice does not apply.

9. Conclusions

9.1 Two critical areas which are inter related that require resolution are:-

- the circumstances to determine when it would be appropriate for services to be funded from either grants or contracts;

- the circumstances in which grants and/or contracts should be applied to finance pump-priming of services, and the most appropriate approach beyond the pump-priming period.

9.2 Two other areas which would need to be addressed are:-

- the perceived threat to smaller organisations arising from a process which would lead to more tendering of services, which is implicit in the EU requirements;

- the ability of smaller voluntary organisations to submit a tender bid;

9.3 The issues identified above are all critical to the Department's approach to self-directed support (SDS) where a number of services are likely to grow organically thereby making tendering at the outset difficult as demand, or even the type of services to emerge cannot be identified. Furthermore, it is likely that there will be a need to pump-prime some organisations who are interested in developing new services for which it is perceived there will be a demand..

9.4 There were also concerns about the detrimental impact on the health and wellbeing of service users arising from a more competitive process. Whilst, in theory, TUPE means that staff could transfer to a new provider and thereby maintain continuity of service, it is by no means certain that they will do so. Also, the management culture of an organisation may also mean that staff may not stay, even if they transferred to the new provider.

9.5 There was agreement that the following proposed single tender criteria be applied:-

-Specialist provider;


-Interim arrangements whilst a service is being reviewed;

-Where joint contracts with other agencies represent demonstrable
value-for-money for the County Council;

-Service user led and community based services which give added value.

9.6 However, there is the issue of pump-priming services. In some cases of course, it would be totally appropriate to tender for a partner to develop services, including "piloting" arrangements if necessary. However, in the case of Self Directed Support, where there are so many uncertainties and where growth is likely to be incremental and organic, then some form of pump-priming funding approach will be required.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: the list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

NONE

Appendix 1 - Additional points noted at Consultation event

Appendix 1

Single Tender Criteria for the Award of Contracts

Consultation event with Alan Edwards,

Contracts Manger, HCC Adult Services - Monday, 1 October 2007

Additional points made during the Presentation

· Adult Services (AS) has 239 contracts for services. 183 of these (77%) are with the VCS, with a value of £32.1m pa. These cover supported living, mental health, supported employment, day services, domiciliary care, meals-on-wheels, advocacy, information, and home from hospital.

· Adult Services has not thus far encouraged competition between VCOs.

· Best value is covered in the existing criteria under value for money, unit prices being benchmarked, and user satisfaction surveys. The County Council is currently rated as an `excellent' authority, but local authorities are now to be ranked on partnerships too; as Health will be an important partner, there are likely to be more joint contracts from AS and Health in the future.

· Best Value is still included in the proposed new criteria, but there is also a requirement to undertake an appropriate level of advertising sufficient to ensure that non-competitive practice does not apply. This is EU advice. This requirement has always applied to the big capital projects, such as road building, but is now extended to what is called Part B services, affecting health and social care services. For contracts of any value, the Council must show that it has not acted in an anti-competitive manner.

· At present the County Council uses contracts when it is `buying' a whole service, and grants when it contributes to services/projects.

· The planned process is for tendering opportunities to be advertised on the County Council website - see www.hants.gov.uk/procurement Adverts for all contracts which are due to come to an end on 31 March 2009 are to be posted on that website on 1 April 2008 - with the accompanying documentation, ie service specification, contract, PQQ (pre-qualification questionnaire) and selection criteria.

· Selection criteria will cover things like track record and expertise, how financially secure an organisation is, the capacity of its management and staff, and added value.

· E-tendering will become much more commonplace - advertised on the web, and tenders submitted electronically. Some authorities have introduced this, adopting a `big bang' approach, but AE believes that it will need to be introduced progressively, as providers develop capacity to cope with it.

· The well-being agenda is a high priority for Hampshire County Council, and it will influence the criteria.

· The EU requirements/advice is pushing towards greater use of advertising and competition - but change of contracts and providers has TUPE implications and all the added costs that that involves. [TUPE = The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) preserve employees' terms and conditions when a business or undertaking, or part of one, is transferred to a new employer.]

Comments made by delegates

· Does the EU specify when a contract or a grant has to be used, and could there be some freedom for manoeuvre?

· What is considered to be an appropriate or adequate level of advertising?

· Under the proposed criteria is one which refers to `added value'. There is to be work to see if AS and the VCS working together can define what we mean by `added value' and how that might be reflected in the grants and contracts regime. There is also research commissioned by the Office of the Third Sector, to look at how added value, or social clauses, can be used in contracts. It will be important to track this work.

· There is to be a review of grants and contracts within Adult Services (AS), and a comment has already been made (at the July workshop between AS and the VCS) that this might be too `blunt' an approach, which needs rethinking.

· Single tender has been used to pump-prime services. Grants would be more appropriate to pilot new services, build capacity, and support innovation. (Again, at the July workshop AS deputy director, John Clifton, expressed a keen interest in a grant pot to support innovation.)

· When a voluntary or community organisation has come up with an idea for a new service, and wants to work with AS in developing it, they will have invested a lot of time and energy into it, possibly money as well. A straw poll at the event clearly showed that if they were then told that the service had to be tendered, it would be viewed as very unfair and mean that possibly they would be less likely to put in the effort. And what about the issue of intellectual property rights?

· Would the EU advice apply to in-house services? No, as the Council can decide what services it chooses to provide.

· Is there a mood in Hampshire to move towards bigger, countywide contracts? AS believes there is scope to attract new providers in some segments of the market, but small-medium sized organisations are often providing niche services in sometimes small geographical locations. There is no desire to threaten or destabilise the VCS, and AS wants to support community, service-user led groups.

· Does the need to demonstrate a competitive process mean that whenever a contract comes up for renewal, it may have to be re-tendered? AE said that in principle, this would be true, but depending on the sums involved, the cost of doing so might not make sense and this would need thinking through.

· Given that short-term contracts don't make financial sense, and are disruptive for both organisations and service users, is there an aim to move to 3, 5 or even 7-year contracts. AE said that there was a desire to move towards greater stability.

· In the case of block contracts, where an organisation might be delivering a number of services, a phased approach would be better, because the requirement to do several (re-)tenders all at the same time would be unmanageable.

· When scoring tender bids, the Council will be applying a certain percentage for price and for quality, but AE felt that this might well vary according to service. It was felt that whatever method is chosen, this should be made clear and transparent. A concern was expressed that a 70% on price, 30% on quality split might be adopted.

· What will happen to spot contracts? AE said that they may need to regularise some spot contracts - possibly within frameworks? (Under frameworks it is important for an organisation to complete a PQQ, even if they don't intend to tender for the service currently being advertised, because only those organisations selected at the PQQ stage will be invited to tender for future similar services within a certain time period.)

· What is this change to the single tender criteria and the requirement to demonstrate adequate advertising going to cost the County Council, as well as the additional commissioning posts?

· The use of contracts has implications for governance and trustees - may not be comfortable with contracts, more risk, etc

· Many VCOs don't have the resources to cover the costs of putting together tenders.

· Once you move into contracts, there are VAT implications.

· Support is needed by the voluntary sector for tendering.

· The impact of Total Transformation needs to be part of the thinking. This is a national initiative, committing the Council to try and make self directed support available to at least half of the people eligible for receiving social care support by 2009. Part of this agenda is individualised budgets, where the service user potentially becomes the commissioner. Although there is likely to be a transitional period, the effect on, for example, block contracts and contract duration, has to be thought about.

Discussion groups on `added value' and the VCS

Group 1

· Service user / carer involvement and empowerment

· Service user feedback and user-led services

· Local knowledge

· Additional input, financial (access to other sources of funding) and other services

· Voluntary organisations networking

· Long term commitment

· Lack of bureaucracy

· Focus on the individual

· Volunteers, and their well-being

· Longevity and continuity of providers

· Benefits to users and carers

· Service innovation

· Partnership working - with commissioners, with other voluntary organisations

· Good management and personnel; well trained volunteers

· Buildings and equipment

· Mixed economy of the voluntary sector itself

· Independence

Group 2

· Voluntary organisation often provides more than it is paid for under the contract - the extras - how to quantify and prove this?

· Local response to local community

· Approachability - ability to engage with `harder to reach'

· Reliability of service provided

· Local knowledge and specialist trained staff and volunteers

· Developing new services - innovation - possibly lost through tendering?

· Staff loyalty, staff/volunteer retention meaning low turnover levels - continuity

· Experts by experience

· Providing the opportunity to volunteer and attracting a wide range of people delivers diversity and inclusivity

· Speed - ability to respond and react

· Flexibility

· Student placements/work experience/education - lecturing

· Preventative care (but difficult to quantify). VCOs should have access to savings made by LAs and Health through VCS preventative work. Also need to share information.

VCS organisations represented at Single Tender Criteria Consultation event - Monday, 1 October 2007

Age Concern Winchester

Alzheimers Society - Portsmouth & District

Andover Mind

Brendoncare Clubs

Carers Together in Hampshire

Community Action Hampshire

Enham

Groundswell

HARG (Hampshire Advocacy Regional Group)

Lockswood Day Care Centre

Mencap - Andover & District

One Community

RASAC (Rape and Sexual Abuse Counselling)

Rose Road Association

SCA Community Care Services

SEARCH Ltd

Solent Mind

Step by Step

Stonham

Test Valley Community Services

Winchester & Andover Carer Centre

WRVS