Employee bidding for his employer's contract with council...
Discussion
Don't know if this for here or the Law section, but...
A friend of mine is employed by an agency providing a service to the council. The tender comes up every five years and my mate, as you do, thinks he can do a far better job, pay himself more, and charge the council less. It's white collar stuff not labour.
If he approaches the council and offers to tender, I think he's on a sticky wicket - One viewpoint could be that he has amassed a good deal of experience and the relevant skills while working for his employer, and is now undercutting them to steal their business.
His view is that the organisation that emplys him don't give a stuff, overcharge the council, and treat him and his staff like s
t.I can see both sides...I think at the bare minimum he'd have to resign first.
psI don't know if the tenders are advertised, or whether it's done behind closed doors..
Assuming his contract doesn't contain a non-compete/non-solicitation clause, then he should be OK.
My advice is to take a look at council tenders, to see what they ask for. I considered this for my company, but boy-oh-boy, what a ballache it seemed. There is a reason Mitie, Capita, Serco etc. win the lion's share of public sector work, they have vast teams of people who prepare bids for a living.
He should be able to find them here
My advice is to take a look at council tenders, to see what they ask for. I considered this for my company, but boy-oh-boy, what a ballache it seemed. There is a reason Mitie, Capita, Serco etc. win the lion's share of public sector work, they have vast teams of people who prepare bids for a living.
He should be able to find them here
Macneil said:
Don't know if this for here or the Law section, but...
A friend of mine is employed by an agency providing a service to the council. The tender comes up every five years and my mate, as you do, thinks he can do a far better job, pay himself more, and charge the council less. It's white collar stuff not labour.
If he approaches the council and offers to tender, I think he's on a sticky wicket - One viewpoint could be that he has amassed a good deal of experience and the relevant skills while working for his employer, and is now undercutting them to steal their business.
His view is that the organisation that emplys him don't give a stuff, overcharge the council, and treat him and his staff like st.
I can see both sides...I think at the bare minimum he'd have to resign first.
psI don't know if the tenders are advertised, or whether it's done behind closed doors..
He wouldn't have to resign. LA tenders are usually sealed envelope jobs so nobody should be even aware that he's put in a bid.A friend of mine is employed by an agency providing a service to the council. The tender comes up every five years and my mate, as you do, thinks he can do a far better job, pay himself more, and charge the council less. It's white collar stuff not labour.
If he approaches the council and offers to tender, I think he's on a sticky wicket - One viewpoint could be that he has amassed a good deal of experience and the relevant skills while working for his employer, and is now undercutting them to steal their business.
His view is that the organisation that emplys him don't give a stuff, overcharge the council, and treat him and his staff like s
t.I can see both sides...I think at the bare minimum he'd have to resign first.
psI don't know if the tenders are advertised, or whether it's done behind closed doors..
There's no harm in him putting in a bid - however the Council's procurement Team would be expected to do a level of due diligence. They'll be looking at his experience, his organisation set-up, insurances, references, they will expect multiple Policies and procedures. There will be a lot of paperwork to submit.
Countdown said:
He wouldn't have to resign. LA tenders are usually sealed envelope jobs so nobody should be even aware that he's put in a bid.
There's no harm in him putting in a bid - however the Council's procurement Team would be expected to do a level of due diligence. They'll be looking at his experience, his organisation set-up, insurances, references, they will expect multiple Policies and procedures. There will be a lot of paperwork to submit.
I was about to say the same sort of thing.There's no harm in him putting in a bid - however the Council's procurement Team would be expected to do a level of due diligence. They'll be looking at his experience, his organisation set-up, insurances, references, they will expect multiple Policies and procedures. There will be a lot of paperwork to submit.
It's one thing being cheap and having knowledge of the work/service provided, but it's something completely different when it comes to proving you can deliver what's needed consistently, safely, within any regulatory boundaries, whilst having the resilience to continue to deliver whatever it is throughout the contract period.
Unless it's a really small bit of work that has low impact if it wasn't delivered then I'd think he's less than 10% there with the requirements, coming in as simply an ex-employee of the current provider.
Of course, his employer might well be useless at delivering the service, and be overcharging, but you'd be hard pushed to find a senior procurement bod who'd want to put his/her name to taking on a new supplier with so little credibility.
They'd be hung drawn and quartered if they did something as obscure as taking on an unestablished one-man-band outfit who then let them down.
CzechItOut said:
Assuming his contract doesn't contain a non-compete/non-solicitation clause, then he should be OK.
My advice is to take a look at council tenders, to see what they ask for. I considered this for my company, but boy-oh-boy, what a ballache it seemed. There is a reason Mitie, Capita, Serco etc. win the lion's share of public sector work, they have vast teams of people who prepare bids for a living.
He should be able to find them here
Even then, restraint of trade clauses are essentially taken as being illegal unless under very rare circumstances and for very limited time periods. I think he should be careful of using whatever info he has gained from his previous/current employer though.My advice is to take a look at council tenders, to see what they ask for. I considered this for my company, but boy-oh-boy, what a ballache it seemed. There is a reason Mitie, Capita, Serco etc. win the lion's share of public sector work, they have vast teams of people who prepare bids for a living.
He should be able to find them here
PorkInsider said:
Countdown said:
He wouldn't have to resign. LA tenders are usually sealed envelope jobs so nobody should be even aware that he's put in a bid.
There's no harm in him putting in a bid - however the Council's procurement Team would be expected to do a level of due diligence. They'll be looking at his experience, his organisation set-up, insurances, references, they will expect multiple Policies and procedures. There will be a lot of paperwork to submit.
I was about to say the same sort of thing.There's no harm in him putting in a bid - however the Council's procurement Team would be expected to do a level of due diligence. They'll be looking at his experience, his organisation set-up, insurances, references, they will expect multiple Policies and procedures. There will be a lot of paperwork to submit.
It's one thing being cheap and having knowledge of the work/service provided, but it's something completely different when it comes to proving you can deliver what's needed consistently, safely, within any regulatory boundaries, whilst having the resilience to continue to deliver whatever it is throughout the contract period.
Unless it's a really small bit of work that has low impact if it wasn't delivered then I'd think he's less than 10% there with the requirements, coming in as simply an ex-employee of the current provider.
Of course, his employer might well be useless at delivering the service, and be overcharging, but you'd be hard pushed to find a senior procurement bod who'd want to put his/her name to taking on a new supplier with so little credibility.
They'd be hung drawn and quartered if they did something as obscure as taking on an unestablished one-man-band outfit who then let them down.
I guess there's a few things to consider, the first being how they advertise upcoming tenders. Some places advertise using 'In-Tend', some go on to G-Cloud. As it's a Government body, you could always submit an FOI request...or dare I say it, be as brazen as just asking how they will advertise the tender.
Most Councils are a tad out of pocket due to standing down services that create revenue as well as having to spend to enable business continuity in certain areas so would have thought if there is a significant saving to be had then they will be more interested in exploring it.
As above, the thing that may go against you is that they will check credit history and build a risk profile on you. If you're really serious and genuinely can offer them more for less, speak to the head of service or somebody in procurement, they will listen.
Most Councils are a tad out of pocket due to standing down services that create revenue as well as having to spend to enable business continuity in certain areas so would have thought if there is a significant saving to be had then they will be more interested in exploring it.
As above, the thing that may go against you is that they will check credit history and build a risk profile on you. If you're really serious and genuinely can offer them more for less, speak to the head of service or somebody in procurement, they will listen.
Autopilot said:
I guess there's a few things to consider, the first being how they advertise upcoming tenders. Some places advertise using 'In-Tend', some go on to G-Cloud. As it's a Government body, you could always submit an FOI request...or dare I say it, be as brazen as just asking how they will advertise the tender.
That's not brazen at al - that's the right way to do it 
I'd have a look at their website first as normally the Council will show on there how tenders are advertised.
Most of my UK work is for Local Authorities and I know precisely the context of your question.
Some sound replies thus far but let me add a few important points in relation to winning Council Contracts.
Firstly, whilst there are some progressive councils out there that support local start-ups, a multi-year contract that would support the employment of just one person would likely push the tender to the middle or upper tier of procurement type.
So, whereas with the lower tier, a council can award a contract on the basis of three quotes (sometimes no quotes as long as there’s sound justification), the bigger the value, the greater the degree of scrutiny and the wider the publishing of that tender goes.
At these levels, tenders get scored and it’s the highest scoring tender that wins. The dispersal of scores varies but as a rule of thumb, it’s normally 40% price, 40% method, 20% skills and experience.
Whilst your friend personally is likely to have as much skill and experience needed, the company he would need to form to bid for the contract won’t. It has no track record. He may think that he can compensate by offering a lower price. Unfortunately not!
Councils will discard tenders with an ‘unusually’ low price. The metric that determines this is usually included in the tender specification and shown as a percentage below the average.
The lowest cost is awarded 100% of the marks for price. The highest cost, 0%. And increments in between. And the margins that determine where you end up is very narrow.
All that is somewhat irrelevant however as it’s unlikely that he would pass initial compliance – normally done through an initial Expression of Interest. Companies interested in bidding are invited to submit their credentials including their financials. Most councils will not award a contract to a company with a value that exceeds 30% of their last FY’s turnover. This alone would knock your friend out of the ballpark.
On top of that, he would at that early stage have to demonstrate that the company has all insurances in place which could cost a grand or so.
It’s not impossible. But he shouldn’t think that by simply sticking in a cheap price he’d win the bid. Plus, it’s not just his ‘salary’ that needs covering. There’s employer’s NI contribution, insurances (as mentioned), payroll and a host of other direct and indirect costs associated with the provision of the person. So whilst he may think the company overcharges, if ever he was to look at the overhead they carry, he’d likely find that the price is more or less appropriate.
Beyond all that is the mindset of council procurement. If you sell to a company, the person you sell to may well own the company or have a vested interest in the organisation. They will appreciate things like ‘character’, ‘personality’, ‘value’. Buying decisions can be made on purely subjective factors because they can appreciate the added-value of what’s being offered. Councils don’t work like that. They operate to a strict set of tick-boxes intended to completely de-risk the buying process. Outwardly, this is to demonstrate due-process, fairness and the avoidance of mistakes. In reality, all it does is that when mistakes are made, nobody is responsible because due-process was followed.
And to those suggesting ‘brown-envelopes’ and ‘favours’ when dealing with councils…. It is no longer the 1970s. I can’t say that it doesn’t happen but 20 years of working for around 160 local authorities, I’ve yet to encounter it. I once brought a tin of chocolate biscuits to a project wrap up meeting and got hauled over the coals for breaching the council’s bribery policy that I had agreed to when I signed the contract.
Anyway, bottom line is I think you’re right that your chum’s on a sticky wicket with this.
HTH
Some sound replies thus far but let me add a few important points in relation to winning Council Contracts.
Firstly, whilst there are some progressive councils out there that support local start-ups, a multi-year contract that would support the employment of just one person would likely push the tender to the middle or upper tier of procurement type.
So, whereas with the lower tier, a council can award a contract on the basis of three quotes (sometimes no quotes as long as there’s sound justification), the bigger the value, the greater the degree of scrutiny and the wider the publishing of that tender goes.
At these levels, tenders get scored and it’s the highest scoring tender that wins. The dispersal of scores varies but as a rule of thumb, it’s normally 40% price, 40% method, 20% skills and experience.
Whilst your friend personally is likely to have as much skill and experience needed, the company he would need to form to bid for the contract won’t. It has no track record. He may think that he can compensate by offering a lower price. Unfortunately not!
Councils will discard tenders with an ‘unusually’ low price. The metric that determines this is usually included in the tender specification and shown as a percentage below the average.
The lowest cost is awarded 100% of the marks for price. The highest cost, 0%. And increments in between. And the margins that determine where you end up is very narrow.
All that is somewhat irrelevant however as it’s unlikely that he would pass initial compliance – normally done through an initial Expression of Interest. Companies interested in bidding are invited to submit their credentials including their financials. Most councils will not award a contract to a company with a value that exceeds 30% of their last FY’s turnover. This alone would knock your friend out of the ballpark.
On top of that, he would at that early stage have to demonstrate that the company has all insurances in place which could cost a grand or so.
It’s not impossible. But he shouldn’t think that by simply sticking in a cheap price he’d win the bid. Plus, it’s not just his ‘salary’ that needs covering. There’s employer’s NI contribution, insurances (as mentioned), payroll and a host of other direct and indirect costs associated with the provision of the person. So whilst he may think the company overcharges, if ever he was to look at the overhead they carry, he’d likely find that the price is more or less appropriate.
Beyond all that is the mindset of council procurement. If you sell to a company, the person you sell to may well own the company or have a vested interest in the organisation. They will appreciate things like ‘character’, ‘personality’, ‘value’. Buying decisions can be made on purely subjective factors because they can appreciate the added-value of what’s being offered. Councils don’t work like that. They operate to a strict set of tick-boxes intended to completely de-risk the buying process. Outwardly, this is to demonstrate due-process, fairness and the avoidance of mistakes. In reality, all it does is that when mistakes are made, nobody is responsible because due-process was followed.
And to those suggesting ‘brown-envelopes’ and ‘favours’ when dealing with councils…. It is no longer the 1970s. I can’t say that it doesn’t happen but 20 years of working for around 160 local authorities, I’ve yet to encounter it. I once brought a tin of chocolate biscuits to a project wrap up meeting and got hauled over the coals for breaching the council’s bribery policy that I had agreed to when I signed the contract.
Anyway, bottom line is I think you’re right that your chum’s on a sticky wicket with this.
HTH
Truckosaurus said:
Could the person in question not get themselves hired directly by the council as an employee at a rate that is both more than they currently receive and less than the council pays its supplier?
Unlikely and depends mainly on the service being provided.Pensions make Council employees quite expensive, but what outsourcing also does is transfer risk/responsibility to the external company.
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff