Why didn’t we see this VEAT, Pete?

Why didn’t we see this VEAT, Pete? 1024 946 Contracts Advance

What is a VEAT?

If you haven’t heard of a VEAT — don’t worry for you are not alone.

A VEAT (Voluntary Ex-Ante Transparency Notice) can be published when a contracting authority has chosen a particular route to market. This route falls under the label of a closed competition tender.

Have you ever been invited to tender directly? Or, been involved in tendering for a call-off contract under a framework agreement? Those are examples of closed competition tenders.

It’s used when a contracting authority has awarded a contract to a supplier without first having published a tender notice (an open call for competition), which opens the work up to the rest of the market. They can then, voluntarily, choose to publish a VEAT to allow the market to challenge the decision.
A VEAT must contain mandatory information such as the value of the contract, who it was awarded to and the justification as to why this route was taken. Failure to provide the correct information (or reasonable justifications), it can be considered ineffective and open to challenge.

That’s not fair, why would a contracting authority award a contract without publishing a tender notice?

There are a few reasons:

  • The contracting authority has concluded there is only one suitable supplier who can cater to their requirement (i.e. niche products/ services)
  • The contract is considered too sensitive to publish openly (i.e. an R&D contract for new military tech)
  • Or — more commonly adopted in recent times — there is a real urgency to source the services (i.e. a hospital needing more beds to manage more COVID-19 patients, there is no time to go through a 2-month long procurement process).

Whilst these are very legitimate reasons by themselves, it has made what is a somewhat taboo route to market, a more acceptable one.

There are no stats to suggest an upward trend in the number of contracts being awarded through this mechanism, the stats below do show a spike in March 2020.

A similar spike occurred in both March 2018 and 2019, perhaps indicating that the number of VEATs published increases in line with a contracting authority’s financial year-end.

No. of VEATs published by month

December 2019 – 83

January 2020 – 61

February – 75

March – 123

April (as of 20th April) – 49

these stats reflect the United Kingdom only

What does this mean for me as a business?

Whether or not we will continue to see more work awarded through this route is entirely speculation.

My thoughts are that awarding work behind closed doors — outside of exceptional circumstances such as those we face today — is not great for anyone. Under a lens of transparency, more exposure to a tender means more businesses see the contract which leads to increased competition and better services and, in many cases, value for money for the buyer.

Logically, if your business is unknown to a contracting authority and more work continues to go through this route — then your chances of winning work are reduced. If a buyer does not know who you are, you are not even in the race to win work that’s awarded in this manner.

How can I be proactive and mitigate this?

Sadly the Tinder equivalent for matching buyers and suppliers does not yet exist. Even if it did, could you describe your value proposition and past performance in 200 characters?

Here are my thoughts as to what you can be doing, today:

  • Find out who your prospective buyers are (i.e. who already has a contract in place for services/ goods such as yours?)
  • Find out when their current contracts are ending
  • Qualify whether the future opportunity is worth the investment in resource (i.e. if you knew that the actual spend of a current contract was significantly less than its estimated value, would you think twice about bidding on the next one?)
  • Engage with buyers before their existing contract ending (timing is important here, no one will give you the air time if they still have 2 years to run on their existing contract — 6 months out from contract end is a good place to start).

This is what is typically referred to as pre-bid engagement. Have you ever read the description of a tender that sounded like it was written by one of your competitors? If so, they were likely able to get ahead of the game through pre-bid engagement.

Fortunately, through technology, there are several tools out there that can help you carry out your pre-bid engagement (shameless plug: including the company I work for, Contracts Advance).

All the best of luck with those bids!

Chris

April 2020

Chris Williams our Head of Operations