Building Blocks Voluntary and Community Sector Commissioning Guide

October 2009

Building Blocks Voluntary and Community Sector Commissioning Guide - October 2009 1

Contents
1. Context of the guide 2. Commissioning values and principles 3. Commitment to the Voluntary and Community Sector 4. Commissioning and Procurement Definitions 5. An explanation of the Commissioning Cycle and examples of good practice where VCOs have been involved in different stages of the commissioning cycle in the Dudley borough 6. Glossary of terms 7. Appendices page 3 page 4 page 5 page 6 page 7 - 17

page 18 - 19

Appendix 1: The Building Blocks Project Appendix 2: Sample Pre-Qualification Questionnaire (supplied by Dudley PCT) Appendix 3: Sample PQQ evaluation criteria (supplied by Dudley MBC) Appendix 4: Sample contract Appendix 5: Key Voluntary and Community Sector Policy Drivers Appendix 6: Links to key Dudley commissioning and procurement documents Appendix 7: Definition of grant aid and contracting

page 20 page 21 - 29

page 30 - 31

page 32 page 33 page 34

page 35

The Building Blocks Voluntary and Community Sector Commissioning Guide has been approved by the following teams and Boards: Joint Commissioning Board (Dudley MBC and Dudley PCT) Commissioning Management Team (Dudley PCT)

Contributors to the development of this guide include: Neill Bucktin (Head of Partnership Commissioning Dudley PCT) Stephanie Cartwright (Head of Market and Commissioning Development Dudley PCT) Mike Marshall (Head of Commissioning, Dudley MBC) Simon Manson (Principal Policy and Performance Management Officer, Dudley MBC) Pauline Sharratt (Assistant Director, Childrens Services, Dudley MBC) Joanne Healey (Procurement Officer, Procurement, Contract Management and Creditor Services, Dudley MBC) Andy Gray (Chief Officer Dudley CVS) Kate Green (Sustainability Officer Dudley CVS) Building Blocks Voluntary and Community Sector Commissioning Guide - October 2009 2

1. Context of the guide

The Building Blocks Voluntary and Community Sector Commissioning Guide has been developed by Dudley CVS in partnership with Dudley MBC and Dudley PCT to help achieve one of the targets of the Building Blocks project. There are also a number of key policy drivers that encourage public agencies to effectively engage with the voluntary and community sector (VCS) in relation to procuring services. Links to some of the key policy drivers can be found in appendix 5, page 33. In April 2008 Dudley CVS launched their new five year building blocks project funded by The Big Lottery. The project aims to support the development and sustainability of voluntary and community organisations (VCOs) in the borough of Dudley through: Providing dedicated one to one funding support Supporting VCOs with the Building Blocks VCS Good Practice Toolkit (a new toolkit developed for Dudleys voluntary sector by consultant Pulse Regeneration)

The project also involves supporting the development of the VCSs understanding of commissioning and procurement so they can become more involved in the various stages of the commissioning cycle. More information about the Building Blocks project can be found in appendix 1, page 20. This guide is aimed at people who manage voluntary sector services in the borough of Dudley. The key outcomes of the guide are to: Enhance the VCSs understanding of the commissioning cycle and how this applies to agencies in the Dudley borough. Raise awareness of the engagement processes enabling VCOs to respond to the procurement aspects of the commissioning cycle. Provide VCOs with a better understanding about how the sector has been involved in some stages of the commissioning cycle in the Dudley borough through examples of good practice. Ensure that the principles of the Compact are mainstreamed into commissioning processes in Dudley.

There are a number of existing documents that have been developed in Dudley some of which include; the Funding Code of Practice and the Councils Procurement Strategy. This guide is intended to run alongside these documents, complementing them rather than conflicting with or replacing them and their related procedures. The intention of this guide is to ensure that, as far as possible, it builds on these documents, simplifies commissioning processes and does not conflict with the array of commissioning guidance which already defines the way in which commissioners in the Dudley borough operate. This guide also focuses on the processes involved with securing contracts through a competitive tendering process. It does not provide information about the processes involved in securing funds through grant-aid from public agencies. Appendix 7, page 35 provides more information about the difference between grant aid and contracting and links to further information.
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2. Commissioning Values and Principles

Public agencies in the Dudley borough will adhere to established procurement rules, regulations and related guidance based upon: Openness and transparency Value for money Non discrimination Reasonable timescales Full cost recovery Recognising the added value of local voluntary and community sector organisations including smaller organisations and those organisations who are representing BME and other minority interest groups Simplicity and proportionality Partnership working

Throughout this guide reference is made to the Dudley Compact. The Dudley Compact is an agreement between the public and voluntary and community sectors in the borough of Dudley. It aims to define and strengthen relationships by establishing some principles and actions to which all parties to the Compact will sign up to. The Compact document provides the basis for continuing to develop the relationship over the coming years. The Dudley Compact (made up of the Statutory, Voluntary and Community sectors) has developed a set of Codes of Practice. Of particular relevance to this Commissioning Framework is the Funding Code of Practice. This code of practice aims to make a positive impact on the funding relationship between public sector agencies and the voluntary and community sector in the Dudley borough and underpins the principles laid down in the Compact. This code is intended to be of advantage to both the public sector agencies and the VCS. For more information about the Compact http://www.dudleycvs.org.uk/thecompact.htm visit: http://www.dudleylsp.org/ or

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3. Commitment to the VCS

Dudleys voluntary and community sector can offer a number of roles in the context of commissioning. These roles include those of: Advocates on behalf of individuals and often marginalised groups within the community. Advisors on service design and the needs of service users. Providers of both mainstream and complementary services to the community.

To enable the VCS to maximise its local contribution in all the above ways, public sector commissioners are encouraged to consider how the VCS can be effectively engaged throughout the commissioning cycle and how it can be supported to compete for services where appropriate. Where the commissioning process places the sector in an openly competitive environment, alongside potential public and private sector providers, action will need to be taken to ensure that the VCS can compete on equal terms. This commissioning guide has been developed in partnership with Dudley MBC and Dudley PCT to help VCOs gain knowledge and understanding about commissioning processes in the Dudley borough, to enable them to compete on equal terms for public service contracts and to outline how these agencies will work with the VCS to ensure this is achieved. The commissioning approaches set out in this guide build on: Inter-agency commitment to supporting the VCS in Dudley. Sound engagement of the VCS across Dudleys strategic and thematic partnerships.

The Dudley Compact which recognises that:

the VCS and public sectors have complementary roles in the development and delivery of policy and services; the statutory sector has an important role as a funder of the VCS; voluntary action is an essential component of a democratic society; and an independent and diverse VCS is fundamental to the well-being of a society.

The Dudley Funding Code of Practice.

The range of good practice and excellent work already carried out in relation to commissioning in the Dudley borough in recent years. Dudleys public sector commissioners recognise that, as significant purchasers of services from the local VCS, their commissioning practice will have an impact on the ability of the VCS to grow, develop and respond to community needs in future. This commissioning guide aims to encourage commissioning practice which is based on an understanding of the sector, its role, potential and that has a positive impact on the VCS both now and for the future.

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4. Commissioning and Procurement - definitions

It is recognised that there are a range of different terms used in relation to commissioning and procurement. For the purpose of this guide the following definitions have been adopted by all public agencies in the Dudley borough.

Commissioning is a function of an organisation, for example Dudley PCT and Dudley MBC, who have responsibility on behalf of the population for spending the resources allocated on services, e.g. health and social care services. It is a set of linked activities required to assess the health care and social needs of a population, specify the services required to meet those needs, within a strategic framework, secure those services, monitor and evaluate outcomes.

The Audit Commission has defined commissioning as: the process of specifying, securing and monitoring services to meet peoples needs at a strategic level. This applies to all services, whether they are provided by the local authority, NHS or other public agencies, or by the private and voluntary sectors.

Procurement is the process of identifying a provider of services and may involve different providers competing against each other for a contract. It may also involve stimulating the market through raising awareness and education.

Contracting is the technical process once the provider has been selected and involves the negotiation and agreeing of the terms of the contract for the services and the ongoing management of the contract including payment and performance monitoring, and agreeing any changes with the contract due to performance issues.

Purchasing is a transactional process where a supplier is reimbursed on usage of a service based on operational activity. It is becoming less common in the commissioning cycle.

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The Commissioning Cycle (diagram 1) The key activities involved in the commissioning cycle are shown in the diagram below:

Review and conclusion

Needs analysis and designing services

Monitor and evaluate

Procurement process

Make commissioning decisions

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5. An explanation of the Commissioning Cycle and examples of good practice where VCOs have been involved in different stages of the commissioning cycle in the Dudley borough
All commissioning activity across agencies in the Dudley borough will relate to priorities set out in Dudleys Community Strategy as well as other national and local policy drivers and strategic priorities. The six priorities of Dudleys Community Strategy are: Creating a prosperous borough Promoting a sense of well-being and good health for everyone Celebrating our heritage and local cultural life Safeguarding and improving the environment Promoting individual and community learning Making Dudley a safe and peaceful place in which to live

The commissioning cycle is set out in five stages as illustrated in diagram 1. Each are explained in more detail throughout this section. As a key strategic partner and in line with the Compact, the VCS should be involved through out the commissioning cycle. This involvement includes representation and engagement in a range of themed partnership boards, service provider groups, forums and service user groups (e.g. Older Peoples Board, Learning Disabilities Board, Mental Health Board, Childrens Trust Joint Commissioning Board, Health Care Forum and Supporting People Provider Group). All those involved in the commissioning process should have a good understanding of commissioning, the responsibilities of the partnership or group in relation to commissioning and their own role within this. Representative groups, panels and forums should include the voices of the population they are representing. In the interests of equality and diversity opportunities for involvement should reach out and respond to the needs of those who may not traditionally have been involved. Examples of good practice where VCOs have been involved in some stages of the commissioning cycle in the Dudley borough are provided throughout this section.

Needs analysis and designing services

The first stage in the commissioning cycle is the identification of needs, the agreement of outcomes and designing services based on needs. This stage combines: Identifying and prioritising needs. Identifying gaps in services. Developing commissioning intentions to meet outcomes; and Developing the market.

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The commissioning cycle is a continual cycle. The identification and prioritisation of needs is an on-going process which should involve dialogue with a range of organisations and partners, for example, the Dudley Community Partnership, themed partnerships, service specific partnership boards, provider forums, user groups etc. The VCS should be engaged throughout these processes and consideration given to the capacity of the VCS and other stakeholders to fully engage. Training or other resources maybe required to enable this to happen. Some examples about how the VCS can be engaged throughout these processes include: Representatives at a strategic level (e.g. Dudley Community Partnership Board, themed partnerships, other partnership boards) Providers and potential providers at the service specific level; and As advocates on behalf of certain user groups where appropriate. Identifying/prioritising needs and identifying gaps in services There are a wide variety of ways in which needs and gaps in services are currently identified in the Dudley borough, these include: insight from members of strategic and themed partnerships; evidence from specific working groups or service reviews; insight from current providers/provider groups; evaluation of current performance in relation to key performance indicators; evidence from statistical returns and demographic data; service user feedback input from local people/service users (e.g. through surveys, user groups, VCOs, community events, specially convened meetings or conferences); research and mapping exercises; regulatory/inspection reports; and central government guidance. As well as the overarching strategic priorities set out in the Dudleys Community Strategy, other factors might influence the identification and prioritisation of needs. These may include: statutory requirements for provision; comparison between current outcomes for different groups within the community (e.g. BME groups); comparison between current outcomes for individuals in different geographical areas; relevant commissioning activities going on elsewhere in the Borough, regionally or subregionally; budget constraints; and opportunities for greater user involvement. Whatever the needs it is important that clear outcomes are identified for any service or activity. Wherever possible these should be subject to consultation and agreement with the relevant partnership/s and user groups. Involving service users and communities in identifying and prioritising needs is an integral part of this stage of the commissioning cycle. When seeking to consult, commissioners are encouraged to work with the VCS where appropriate to ensure consultation is comprehensive, meaningful and empowering and reaches those who otherwise would not get their voices heard.
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Development of commissioning intentions Once the needs, priorities and outcomes have been developed commissioners will develop their commissioning intentions. The development of commissioning intentions includes: the specification for the service to be commissioned; and the commissioning method to be used.

Specification for the service Service specifications will be influenced by national guidance, local needs and input from various stakeholders (including VCOs) through the various partnership processes set out above. Service specifications should be based on outcomes and should encourage: sustainability; innovation; and partnership working (including delivery by consortia where appropriate). Specifications should be developed to complement the wider range of commissioning activity going on within the borough and elsewhere. The aims and objectives of the service and the level of detail in these will be dictated in part by the nature of the service. They should however also be proportionate to the amounts of money involved. Wherever possible, service specifications and programme criteria should be subject to agreement with relevant partnerships and user groups. Commissioning methods to be used The over-riding factors influencing the commissioning cycle is the achievement of value for money and the delivery of high quality services. Treasury guidance is clear that value for money may not always be best achieved through competitive procurement processes and that there is also a place for strategic and development funding of the sector. The process by which a service is to be commissioned will depend on a number of factors including: the state of the open market; the amount of money available; the number of potential providers or applicants for the service; whether the service has been identified as sector specific or whether it is open to any potential provider; the length of time for which funding will be available; and the amount of time available for the commissioning process. There are a range of national policy drivers which are moving towards more competitive procurement processes including areas where VCOs have previously been funded under grant aid. In some cases the commissioning method to be used, whether it is purchasing through procurement or funding through grant aid, is externally determined. It is difficult to state hard and fast rules about the commissioning method to be used in any given circumstance. In Dudley there is no one consistent approach to commissioning as each public agency has developed its own commissioning process in line with their own financial procedures, however, all the processes broadly follow the cycle of commissioning described in this document. In all cases the processes followed will comply with UK and European law. The main service areas in which the VCS may deliver public services (e.g. health and social care services, educational, vocational, recreational and sporting services) are exempt from
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the full implications of the EU procurement regime. However, any procurement method must comply with the general EU principles of: Non-discrimination Transparency Equal treatment, and Value for money

Development of the Market In order to meet the requirements of the Dudley Compact, commissioning intentions should be published at the earliest possible opportunity to illustrate where some existing services or activities may no longer be prioritised and where new or refocused ones may be sought. This will give VCOs time to develop their services and decide whether or not they wish to tender for contracts. It is also essential to notify well in advance those organisations whose services or activities may no longer be prioritised. VCOs interested in tendering for contracts are encouraged to develop relationships with relevant commissioners in order keep up to date with potential tendering opportunities and for commissioners to learn about the types of services that are and that could be delivered by the VCS. Dudley CVSs VCS Good Practice Toolkit can help VCOs to identify how they can develop relationships with commissioners of services. Example of good practice in Dudley borough of VCSs involvement in stage 1 (agree outcomes and service design) During May 2008 the MS Society and the Parkinsons Disease Society were involved in assisting Dudley MBC and Dudley PCT in identifying the needs of people with neurological conditions in the Dudley borough. Both voluntary organisations were involved in a workshop attended by service users and carers to help develop a neurological conditions strategy for Dudley. This strategy helped to identify and prioritise needs and help inform potential commissioning intentions. The workshop was evaluated very positively and the service users who attended met later in the year as part of a separate forum to develop neurological conditions. Both the Parkinsons Disease Society and the MS Society regularly attend the Dudley neurological conditions strategic group. Similarly also in May 2008 Dudley Alzheimers Society and Dudley Mind were involved in the development of Dudleys Mental Health Older Peoples Strategy which also helped to identify the needs of older people with mental health issues and inform potential commissioning intentions. Dudley MBC and Dudley PCT benefitted from the involvement of the above voluntary organisations as they were able to draw on their local knowledge and expertise which helped to form the strategies and influence service development. The Dudley CVS Building Blocks project can assist VCOs with: Identifying whether the delivery of public services is an area that the VCO wishes to enter into Identifying whether the organisation has the skills and capacity to deliver public services Developing relationships with relevant commissioners of services

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Procurement process
The tendering process should be clear and well managed and proportionate to the amounts of money involved. Advertising opportunities Tender opportunities should be advertised to existing and potential providers as widely as possible. Contracts worth over 90,319 for Central Government services and contracts over 139, 893 for other public sector contracting authorities by law have to be advertised on the Official Journal of the European Union (OJEU). There are a variety of websites that are used to promote contract opportunities by agencies in Dudley borough. Some of these include: www.supply2gov.co.uk, http://www.supply2health.nhs.uk/links.aspx,http://www.dudley.gov.uk/index.asp?pgid=81 02 and www.in-tendhost.co.uk/dudleymbc. Some of the other methods that may also be used include: Local press Local networks; and the Dudley CVS funding bulletin

Where a more restricted process is being used (e.g. where timescales are limited or where there are very few potential providers) approaches may be made to specific organisations, or particular types of organisations may be sought out and encouraged to bid. Any advertisement of a commissioning opportunity should make clear the process to be used and the timescales involved. Types of procurement procedures that are often used are: Open procedure under this procedure all interested organisations may respond to the advertisement by submitting a tender for the contract. Restricted procedure under this procedure all interested parties responding to the advertisement are requested to complete a Pre-Qualification Questionnaire (PQQ). Organisations who submit a completed PQQ document are then evaluated on their ability to execute the contract. Only short listed organisations are then invited to submit a tender for the contract. The evaluation of the PQQ stage may involve organisations attending a meeting to clarify information submitted. An example of a PQQ document can be found in appendix 2, page 21.

Inviting applications for tender All information relating to inviting tenders should be clear and jargon free. They should state briefly the: purpose of the funding; specification for the service or activity to be funded; specific requirements of the delivery organisation; opportunity or preference for partnership or consortia bids; commissioning process involved; assessment criteria that will be used; timescales for applications, bidding and decision making; duration of the service or activity;
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type of agreement that the successful applicant will enter into and the nature of their responsibilities under this agreement; proposed start date for delivery. Standard formats Wherever possible, commissioners will work towards using standard model formats for the information they circulate regarding commissioning opportunities and information they require in PQQs and tenders. The levels of detail will vary with the type of service and in proportion to the amounts of money involved. However, the use of model formats enables VCOs to become familiar with these processes over time and will be helpful in situations of joint commissioning. e-tendering e-tendering is an online system that is being used more and more by statutory and public agencies. E-tendering enables organisations to: Express interest in a particular tender or quotation online Receive tender/and or quotation documentation online Safely return their tender or quotation documents online Send and receive correspondence online

Currently, Dudley MBC offers e-tendering through their web based system In-Tend. Dudley PCT is also looking to offer e-tendering in the near future. To view Dudley MBCs In-Tend web based system visit: https://in-tendhost.co.uk/dudleymbc/ Example of good practice in Dudley borough of stage 2 (procurement process) In December 2008, Dudley PCT advertised a tender for a service supporting carers of people with Dementia in Dudley. Dudley PCT used a restricted procurement process whereby the service specification was advertised on www.supply2health.gov.uk. Interested providers were required to express an interest in the service and complete a prequalification questionnaire (PQQ). Potential providers that passed the PQQ stage were invited to attend a meeting to deliver a presentation about how they would intend on delivering the service and to discuss the specification in more detail. Following this process the service specification was finalised and short listed providers were invited to submit a full tender application. Once Dudley PCT had made a decision on the most suitable provider they offered feedback to unsuccessful bidders within 14 days of a decision being made. A local voluntary sector provider was successful in being awarded the contract and commenced the service in July 2009. The Dudley CVS Building Blocks project can assist VCOs with: Finding out about tender opportunities Understanding service specifications Completing pre-qualification questionnaires (PQQ) Preparing for interviews/discussion meetings Developing and submitting tender documentation

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Making commissioning decisions

Once the deadline for bids is reached, commissioning decisions can be made. These commissioning decisions will be taken by the appropriate party or parties depending on the mode of commissioning adopted by each agency. These may include lead commissioners, management teams, funding panels or partnerships. Where a potential provider is involved on the decision making body they should be excluded from the decision making process to avoid any conflict of interest. In all cases, applicants should be kept informed of the process in line with the timescales advertised and should be alerted to any changes to these and the reason/s for them. Identifying the best provider(s) Assessment of bids should be against pre-defined selection criteria, relating to the service specification. Evaluation criteria may be based on a variety of factors which could include: Value for money Economic factors Social factors Environmental factors Quality of services

When commissioning takes place through a fully competitive tendering process it is legitimate for VCOs to include a relevant element of overhead costs in their price estimates for providing a particular service. In recognition of this fact, commissioners should avoid seeking information from VCOs about these costs which would not be sought from potential private sector providers. Once the decision has been made, both successful and unsuccessful applicants should be notified of the commissioning decision as soon as possible. The tender submission in most cases is considered as legally binding as the provider will be expected to deliver the services as specified in their tender document. However, once notified, the successful applicant will be expected to either sign a contract or an award letter. At this stage, an expected delivery or project start date should be agreed and every attempt should be made to get the necessary agreement and payment terms in place in advance of this. Contracts If a separate contract is drawn up by the purchaser the contract should: Include the terms set out in the initial specification State the desired outcomes of the service or activity Set out the monitoring requirements, including any performance indicators The duration of the contract A schedule of payment dates or timescales within which payments will be made should be agreed and adhered to. (Any issues relating to compliance with payment terms should be raised immediately and actions to address them agreed at the earliest opportunity). Potential risks to the service and who is responsible for managing such risks (as a general rule, where the relationship is a contractual one, the risk lies with the provider).
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Providing feedback to unsuccessful bidders VCOs should be able to seek feedback from commissioners about the reasons why they have been unsuccessful. This feedback may be useful for VCOs if the organisation bids for contracts again in the future. Feedback will be subject to confidentiality. Information regarding organisations who have been awarded the contract will in the Award Notice be published in OJEU if the contract was subject to EU procurement law. The Building Blocks project can assist VCOs with: Checking through contracts before signing Negotiating contracts Seeking feedback from commissioners about their tenders

Monitor and evaluate

Monitoring requirements should focus on the achievement of outcomes identified in the contract and should require the minimum information necessary to ensure good performance and comply with any legal requirements. In all cases the degree of monitoring should be proportional to the amount of money involved. It should be clear at the outset about: the nature of monitoring (i.e. paper feedback, site visits or meetings) and the timetable for these; the information to be reported and, where necessary, the format in which this should be reported (e.g. standard monitoring forms); any performance indicators against which performance will be monitored; and the timescale for review. These should all be discussed at the outset of the project and any change to them should be based on a clear rationale, discussed with the provider at the earliest possible opportunity and introduced within a reasonable agreed timescale. Monitoring process The monitoring and evaluation process will usually require a degree of reporting on: outputs; outcomes; and finances.

Monitoring is generally carried out on a quarterly basis, either on paper or through meetings. Those who do not meet on a quarterly basis will tend to have at least an six month or annual meeting or visit. Again, the process in place should be proportionate to the amount of money and the degree of risk involved. Response to Poor Performance Poor performance should be identified and raised through regular monitoring activity. Provider organisations should be alerted as early as possible if there are any concerns relating to performance. Commissioners should take a supportive approach to addressing performance issues. Any concerns should prompt a joint exploration of the issues and
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investigation of any barriers to the improvement of performance. This discussion should lead to agreed actions and negotiated targets and timescales for improvement. Where appropriate, commissioners should signpost organisations to other sources of support. There should be absolute clarity about the implications of not reaching agreed expectations. If there is perceived to be an on-going risk then the frequency of monitoring activity may be stepped up. If there is failure to improve performance within a reasonable agreed timescale then the issue should be referred to the relevant Senior Manager, partnership or commissioning board. Early termination of an agreement or contract should be the option of last resort and should be exercised with adherence to good practice. The Building Blocks project can assist VCOs with: Developing monitoring and evaluation systems Developing monitoring and evaluation reports Improving performance

Review and conclusion

Arrangements and timescales for reviewing services and communicating commissioning intentions should be as consistent as possible. This enables VCOs to plan their activities, fulfil their obligations to their various stakeholders and respond better to change. Service and programme reviews Commissioners will periodically conduct reviews of the services or programmes they commission. These may be necessitated by changes in policy, in user need, or in the commissioning bodys priorities. Reviews may be in relation to a specific service or programme, or a range of services. They may be full scale Best Value reviews which look at a service in the context of the wider market for provision or smaller scale reviews of the way in which certain things are done locally. Reviews will look into issues of: Quality; Value for money; User satisfaction; and Strategic relevance (current and future).

The timing of reviews may be triggered by policy changes, by the accumulation of information relating to user needs and priorities, or in anticipation of existing contacts coming up for conclusion or renewal. Wherever a service or programme is proposed for review, existing providers should be notified at the earliest possible opportunity. This should be at least sufficient time for appropriate notice periods to be honoured following the outcome of the review. Conclusion of contracts Following notification, where a contract is coming to an end and is not going to be renewed or renegotiated, the commissioner should discuss with the provider their plans for an exit strategy. Although the commissioner has no obligation to the provider organisation beyond
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the term of the contract, every effort should be made to ensure that the impact of any contract coming to an end is minimised. In some circumstances, where the same service or a similar service is going to be competitively re-commissioned, the current provider will have the opportunity to bid or re-apply. Termination of a contract Termination of a contract before its stated end date is only likely to occur in exceptional circumstances. The reasons for this in every case should be explicit. It will be the option of last resort where poor performance has failed to improve following discussions and actions taken in response to monitoring processes. In such a case, the organisation will have received adequate notice of the implications of continued poor performance. Where there are allegations of fraud or malpractice funding may be frozen or withdrawn with immediate effect. There may be legal ramifications to early termination of a contract but in every case the arrangements for termination of a contract will be set out in the contract itself.

The Building Blocks project can assist VCOs with: Developing exit strategies Identifying and locating appropriate funding sources Issues relating to the termination of contracts

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6. Glossary of terms
Best Value: The process central government required local authorities to implement in order to ensure that they were providing services in the most efficient way. Bidder/Applicant: An organisation that is interested in bidding for a service and applies for the contract opportunity. Commissioning Intentions: Services that commissioners will be looking to either deliver/purchase from a provider in order to meet agreed outcomes. Commissioning: The process of assessing the needs of people in a local area, designing services and then securing them. Contract: A binding agreement to provide services or goods in exchange for a consideration (usually money). De Commissioning: Reducing or terminating a service where a service is no longer required or strategically relevant. De commissioning should be underpinned by a clear rationale supported by evidence, stakeholder involvement and managed transition. Dudley Compact: A written agreement between government and the voluntary sector expressing a commitment to working together for the better of society. Engagement: Assisting people or organisations to become involved in decisions that affect them. E-tendering: Web based system for applying for a contract online. Grant in Aid: Grant-in-aid is money coming from government for a specific project. Joint Commissioning: A process whereby two or more agencies work in partnership to co-ordinate their commissioning activity to meet the identified needs of common or overlapping user groups. Joint Venture or Consortia: Individual organisations agree to create a new organisation to deliver a service. Outcomes: The effect, difference or changes that a service or activity makes on communities. Partnership: A relationship between two or more organisations that agree to work together and take shared responsibility to achieve a shared goal. Policy Drivers: Written strategies/policies that outline government intentions. Pre-qualification Questionnaire: A questionnaire used by public service organisations to check the suitability of suppliers and providers and shortlist the ones they will invite to tender. Procurement: The process of acquiring goods, works and services, covering acquisition from external and in-house providers.
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Provider: An organisation that can provide a service that a purchaser is looking to buy (e.g. voluntary organisation, private company). Public Service Organisation: A public organisation that provides and/or manages government and public sector services. Purchaser: An organisation or agency that wants to purchase a service from a provider e.g. Dudley PCT, Dudley MBC, Learning and Skills Council. Service Level Agreement: An agreement between a public service organisation and voluntary organisation to provide a range of services under grant aid. Sometimes described as a soft contract. Service Specification: A description of the services to be delivered under contract. Statutory Sector: Organisations such as the Local Authority, Primary Care Trust, Police, Probation, and Learning Skills Council who are funded through local and national public funds. Tender: A written proposal outlining how a supplier would deliver and meet the requirements outlined in a service specification and the price it would charge. Voluntary and Community Organisation (VCO): A voluntary or community organisation is a group of individuals who voluntarily enter into an agreement to form an organisation that benefits the community. A voluntary organisation is a nonfor-profit making organisation. Voluntary and Community Sector (VCS): Includes voluntary organisations, charities, community groups, registered social landlords, social enterprisers and other not for profit bodies.

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7. Appendices
Appendix 1 Building Blocks Project
In April 2008 Dudley CVS launched their new five year building blocks project funded by The Big Lottery. The project aims to support the development and sustainability of voluntary and community organisations (VCOs) in the borough of Dudley through: Providing dedicated one to one funding support Supporting VCOs with the Building Blocks VCS Good Practice Toolkit (a new toolkit developed for Dudleys voluntary sector by consultant Pulse Regeneration)

The toolkit is a good practice guide that Dudley CVS uses to provide dedicated support to VCOs in the Dudley borough. The toolkit provides information and tools on the key areas of organisational development and assists VCOs to become fit for purpose, more sustainable and if appropriate for the VCO, making them better able to enter the tendering process for public service contracts. Once a VCO has successfully gone through the toolkit it will be able to state with certainty that it is built on firm foundations, providing it with improved confidence to tender for public services. As a result, the toolkit will strengthen the understanding, ability and skillsbase of the sector, leading to an increase in the potential value of contracts being awarded to VCOs in Dudley. The toolkit has been developed by consultant Pulse Regeneration in consultation with VCOs and commissioners during 2008. The toolkit has been endorsed by commissioners within the borough of Dudley. In addition to the Toolkit a Funding Officer is on hand to offer one to one support to VCOs looking for funding. Organisations will receive help in identifying what their funding requirements are, developing strategies for finding the funding they need and sourcing potential funders. The Funding Officer also supports VCOs with finding different ways of getting money in order to help them become more sustainable. Over the next five years Dudley CVS will be working with a range of organisations to deliver a series of workshops on funding and sustainable topics, for example, commissioning, business continuity, marketing, diversifying funding etc. For more information about the Building Blocks Project visit: www.dudleycvs.org.uk/building_blocks.htm

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Appendix 2 Sample Pre Qualification Questionniare (PQQ)

Please note that this is a sample PQQ only. Questions on PQQs may vary depending on the type of service being tendered and the internal processes adhered to by different agencies. Often PQQs will provide details about how the PQQ will be scored. This is known as the evaluation criteria. An example of evaluation criteria supplied by Dudley MBC can be found in Appendix 3, page 30.

Dudley PCT SAMPLE PRE-QUALIFICATION QUESTIONNAIRE (PQQ)

For the Provision Of: Tender Ref:

Notes for Suppliers The purpose of this questionnaire is to assist e.g. Dudley Primary Care Trust in evaluating which suppliers to short-list to invite to tender for The Provision Of ****. This information will be treated as strictly confidential and used only for the purpose of evaluation when considering our select list for this tender. You must answer all questions within this questionnaire, if a question does not apply to you please write N/A. For the Pre-Qualification Questionnaire you dont need to provide supporting documents, for example, accounts, certificates, statements or policies however we may ask to see these documents at a later stage in the tender process. Should you have any queries in relation to this PQQ. Please contact: Please return this form by e-mail to: ***** by no later than: *****.

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BRIEF SUMMARY OF SERVICE REQUIREMENT Dudley PCT is seeking to establish a new Specialist Health Service for ******** within Dudley. The service will: -

INDICATIVE TIMETABLE PQQ Stages

1 2 3 4

Approx. Date

Issue of PQQ Document Closing date for PQQs PQQ Evaluation Period Issue of Invitation to Tender Documents to Successful PQQ Participants

CONTRACT PERIOD The contractual agreement with the PCT and Dudley MBC will be for a minimum period of 3 years with an option to extend for a further 2 years at 2 twelve monthly increments. The contract start date is to be confirmed however we envisage that the service will commence from *****.

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PRE-QUALIFICATION QUESTIONNAIRE (PQQ)

1 1.1

BASIC DETAILS OF YOUR ORGANISATION Name of the organisation in whose name the tender would be submitted: Contact name for enquiries about this bid: Contact position (Job Title): Address: Post Code: Telephone number: Fax number: E-mail address: Website address (if any): Company Registration number (if this applies): Charities or Housing Association or other Registration number (if this applies). Please specify registering body: Date of Registration: Registered address if different from the above: Post Code: VAT Registration number: Is your organisation: i) a public limited company? ii) a limited company? iii) a partnership iv) a sole trader v) other (please specify)

1.2 1.3 1.4

1.5 1.6 1.7 1.8 1.9

1.10

1.11 1.12

1.13 1.14

(Please tick one)

1.15

Name of (ultimate) parent company (if this applies): Companies House Registration number of parent company (if this applies):
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1.16

2 2.1

FINANCIAL INFORMATION What was your turnover in the last three years?

Year End April 2008 / March 2007 Year End April 2007 / March 2006 Year End April 2006 / March 2005 Yes / No

2.2

Has your organisation met the terms of its banking facilities and loan agreements (if any) during the past year?

2.3

If No what were the reasons, and what has been done to put things right?

2.4

Has your organisation met all its obligations to pay its creditors and staff during the past year? If No please explain why not:

Yes / No

2.5

2.6

Are there currently any outstanding claims or litigation against the organisation? What is the name and branch of your bankers (who could provide a reference)?

Yes / No

2.7

Name: Branch: Contact details:

3 3.1

BUSINESS ACTIVITIES What are the main business activities of your organisation?

3.2 3.3

Do you plan to use sub-contractors for Yes/No this contract? If Yes, please give details of any sub-contractors you intend to use and specify in what capacity

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3.4

How many staff does your organisation have? (If you are a sole trader, please say so)

3.5

Please indicate below the total number of staff employed at each grade by your company who are engaged in the type of work relevant for this tender. Role Grade Number of staff/posts Indicate if currently employed Indicate if post is to be recruited to

3.6

Please detail below any registrations or relevant qualifications which your managers, supervisors and persons undertaking this service have that is relevant to the provision of this service

3.7 3.8

3.9

Are all relevant registrations (as per Yes / No 3.6) up to date? Do you provide services that are Yes / No registered with Commission for Social Care Inspection (CSCI) or the Health Care Commission? If Yes to 3.8, please give details the bodies that you are registered with together with details of your registered services and registration numbers (if applicable)

3.10

Is all staff training relevant for this provision of this service up to date?

Yes / No

REFERENCES Please provide details of three recent contracts (within the last 3 years) that are relevant to the Authoritys requirement. Where possible at least two should be relating to healthcare. If you cannot provide three references, please explain why. Reference 1 Reference 2 Reference 3

4.1

Customer Organisation (name):

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4.2

4.3 4.4

Customer contact Name, phone number, fax number and e-mail address: Date contract awarded: Contract reference and brief description: Value: Date contract was completed: Have you had any contracts terminated for poor performance in the last three years, or any contracts where damages have been claimed by the contracting authority? If Yes, please give details: Yes / No

4.5 4.6

4.7

4.8

INSURANCE Please provide details of your current insurance cover Employers Liability: Public Liability: Professional Indemnity Insurance: Value Policy Number Expiry Date

6 6.1

QUALITY ASSURANCE Does your organisation hold a Yes / No recognised quality management certification for example BS/EN/ISO 9000 or equivalent? If No to 6.1, does your organisation Yes / No operate an equivalent quality management system? Please provide details of quality accreditations held by your organisation (such as IIP/Charter Mark/Customer Service Excellence etc)

6.2

6.3

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HEALTH & SAFETY Does your organisation have a written health and safety at work policy? Yes / No

EQUAL OPPORTUNITIES Does your organisation have a written equal opportunities policy, to avoid discrimination? Yes / No

ENVIRONMENTAL MANAGEMENT Does your organisation have an environmental management system? Yes / No

10

CRIMINAL RECORDS BUREAU All of the service staff you employ must be CRB cleared irrespective of hours worked. Do you have CRB checks for all staff that are proposed to work within this service? Yes / No

11

PROFESSIONAL AND BUSINESS STANDING Do any of the following apply to your organisation, or to (any of) the director(s) / partners / proprietor(s)?

11.1

Is in a state of bankruptcy, insolvency, compulsory winding up, receivership, composition with creditors, or subject to relevant proceedings Has been convicted of a criminal offence related to business or professional conduct Has committed an act of grave misconduct in the course of business

Yes / No

11.2

Yes / No

11.3

Yes / No

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11.4

Has not fulfilled obligations related to payment of social security contributions Has not fulfilled obligations related to payment of taxes Is guilty of serious misrepresentation in supplying information Is not in possession of relevant licences or membership of an appropriate organisation where required by law

Yes / No

11.5

Yes / No

11.6

Yes / No

11.7

Yes / No

11.8

If the answer to any of these is Yes please give brief details below, including what has been done to put things right.

12 12.1

REQUIREMENT SPECIFIC QUESTIONS Would you be able to get this service in to place for 1st April 2009? Please confirm that you have the capacity of putting this service in to place within the Borough of Dudley? The service will require the provision of a sessional health facilitation specialist nurse, will you be able to provide this? The service will require the provision of a sessional neuro-psychiatrist for one to two sessions per month, will you be able to provide this? Do you have contingency plans in place to address failure/breakdown in service provision? Yes/No

12.2

Yes/No

12.3

Yes/No

12.4

Yes/No

12.5

Yes/No

13

I declare that to the best of my knowledge the answers submitted in this PQQ (and any supporting modules) are correct. I understand that the information will be used in the evaluation process to assess my organisations suitability to be invited to tender for the Authoritys requirement.

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FORM COMPLETED BY 13.1 13.2 13.3 13.4 13.5 Name: Position (Job Title): Date: Telephone number: Signature:

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Appendix 3 Sample Pre-Qualification Questionnaire Evaluation Criteria (supplied by Dudley MBC)

This is an example of evaluation criteria used by Dudley MBC on a particular contract that was advertised for tender. EVALUATION CRITERIA Criteria Areas for consideration All questions in the section are to be considered but with particular emphasis on the areas below Company Accreditations CRB Clearance Business Continuity Ability to trade electronically Stimulating the Economy Environmental Considerations/Contractors Commitment to Sustainability % Weighting Applicable 15%

Section B Company Information

5%

Section C Financial Information

The appraisal assesses the financial condition of the company based on the latest filed accounts

Acceptable / Not Acceptable

Section D Equal Opportunities

The appraisal assesses the organisations key human resource policies & relevant documents that are identified within the policies to ensure they comply with all relevant regulation.

5%

Section E Health and Safety

The appraisal assesses the organisations Health & Safety policies & relevant documents that are identified within the policies to ensure they comply with all relevant regulation.

5%

Section F Meeting our Requirements

Management of contract Ability to service the contract Technical Capability & Ability Cover and support for operatives Range of services offered Supplier Innovation References Value Added Services

70%

Section G Compliance

with the Councils Standing Orders as outlined in Section G - Compliance with the Councils General Terms & Conditions Transfer of Undertakings (Pension and Employment) legislation

Acceptable / Not Acceptable

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Scoring of Criteria For this particular tender the Council will use a scoring system for evaluating responses as follows. The scoring will then be weighted to the key criteria as above. Score Scoring Principles

Rejected Evidence is unacceptable, insufficient or non-existent to fully evaluate the answer provided, or there is a failure to properly address any issues.

14

Poor The evidence is deficient in certain areas where the lack of detail or relevant evidence requires the reviewer to make assumptions.

58

Satisfactory The evidence is acceptable, but with some minor reservations. The response deals only with processes and little output evidence is provided.

9 - 10

Excellent The standard of evidence closely or fully meets expectations.

The evaluation process will consider all relevant submitted evidence and written information provided by the organisation, in relation to the specific requirements as set out within this Document. At the sole discretion of the Council, selected organisations may be invited to present and demonstrate details of their submission and to allow clarification of particular points. Any submissions that in the opinion of the Council do not satisfy its requirements will be rejected. The scores for the criteria listed above will be added together to produce a Total Score. The scores for each submission will be compared. Submissions assessed as unacceptable for Section C will not be considered further.

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Appendix 4 Sample Contract

A sample contract developed by the Department of Health and used by Primary Care Trusts can be downloaded from the following link: http://www.dh.gov.uk/en/AdvanceSearchResult/index.htm?searchTerms=contracts

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Appendix 5 Key Voluntary and Community Sector Policy Drivers

Some of the key policy drivers in relation to commissioning and procurement include: The National Programme for Third Sector Commissioning which aims to engender better public outcomes for individuals and communities, which yield efficiency gains and community benefits, through smarter, more effective and innovative commissioning, and optimal involvement of the third sector in public service design, improvement and delivery. The White Paper Our Health, our care, our say which places emphasis on joint commissioning for social care and health, as well as on outcomes for individuals, families and communities. The World Class Commissioning initiative which outlines 11 Core Commissioning Competencies which PCTs are required to develop. Intelligent Commissioning model of commissioning that should foster effective competition for public services and ensure that commissioners secure the benefits that voluntary organisations can bring to public service delivery. Putting People First A shared vision and commitment to the transformation of Adult Social Care which aims to ensure that people can exercise maximum control over their own lives and remain living independently. Joint planning and commissioning framework for Children and Young People and Maternity Services (March 2006). Hearts and Minds: Commissioning from the Voluntary Sector - A research document about commissioning from the voluntary sector. Transforming Government Procurement - A key document outlining a range of public procurement reforms which aims to equip the UK in the next decade with the capability to deliver world class public services in the face of growing challenges of global competition, changing demographics and increasing pressures on natural resources. This is the first major reshaping of the procurement agenda since the Office of Government Commerce was established under the leadership of Sir Peter Gershon. Think Smart Think Voluntary Sector - Guidance on how the HM Treasury expects organisations distributing public money to commission from the voluntary and community sector. Strong and Prosperous Communities - The Local Government White Paper (October 2006) - The aim of this White Paper is to give local people and local communities more influence and power to improve their lives. It is about creating strong, prosperous communities and delivering better public services through a rebalancing of the relationship between central government, local government and local people.

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Appendix 6 Links to key Dudley Commissioning and Procurement Documents

There are a number of commissioning and procurement strategies that have been developed in the Dudley borough. VCOs interested in the delivery of public service contracts are advised to read these documents in conjunction with this framework. Seeing the bigger picture The Dudley Health and Social Care Commissioning Framework and Strategy: A framework about how Dudley Primary Care Trust and Dudley MBC will commission services in the borough of Dudley. www.dudley.nhs.uk/sites/documents/cms/645-2008-4-1-3759444.pdf Dudleys Joint Planning and Commissioning Framework for Children, Young People and Families : A framework for commissioning services for children, young people and families. http://www.dudleycypp.org.uk/index.php?option=com_docman&task=cat_view&gid=20&It emid=45 Councils Procurement Strategy: Summary of the major contracts Dudley MBC intends to run from April 2008 - April 2014 www.dudley.gov.uk/index.asp?pgid=14405 Commissioning the Voluntary and Community Sector with a Capacity Building Model of Commissioning: A document that helps to identify what needs to be put in place to ensure that Dudley Childrens Trust develops a commissioning process which not only meets the needs of children and young people in Dudley, but also supports the development of the voluntary and community sector. http://www.dudleycypp.org.uk/index.php?option=com_docman&task=cat_view&gid=20&It emid=45 Commissioning plans for the Practice Based Commissioning Clusters can be found on Dudley PCT website: http://www.dudley.nhs.uk/index.asp

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Appendix 7 Definition of Grant-aid and Contracting

Grant aid This refers to those situations where a local funding body, e.g. Dudley MBC or Dudley PCT makes funding available to VCOs to provide services which it does not undertake itself or to meet identified gaps. The organisations applying for funding describe the service they are going to provide and the needs they will meet. The funding body will make its assessment against the criteria for the funding programme. This also applies to funding from the Government through partnership programmes that local funders manage. Organisations receiving grant aid will agree to certain terms and conditions that set out how the funding is managed and used. Traditionally, the local funding body has done this through annual grant aid rounds. Increasingly local funders are entering into Service Level Agreements (SLA) with organisations that it has grant aided for a number of years. These differ from traditional grant aid in that there is some negotiation between the funding body and the organisation about the service they will provide. This becomes the subject of a written agreement. Under the local Compact a standard SLA was drawn up for this purpose. Because the organisation still plays a lead role in specifying the service and the way it will be delivered, SLAs fall within the area of grant aid, not contracting. For a copy of the standard SLA visit: http://www.dudleycvs.org.uk/thecompact.htm Contracting This covers the situations where the funding body invites bids from external organisations to provide a service that the partner either has to provide by law, or which it has made a local decision to provide, within its legal powers. The commissioning processes are constantly developing and evolving, and the organisations are advised to consult with the appropriate Commissioning Officer regarding the process. This may vary across public sector agencies and directorates. The funding partner writes a specification for this service and invites bids (or tenders) within the procedures laid down in their financial regulations. The specification says what the service is and how it will be delivered. The organisations bidding say how they will provide the service the funding partner has specified. The financial regulations state how this process of tendering for services is carried out, including making sure there are fair opportunities for external organisations to bid in order to run the specified service.

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