Commissioning is the overall process whereby an organisation decides what it is going to buy. It includes: assessment of need; collection of evidence; consultation and decision-making; specification; constructing an application process; choosing the successful applicants; dealing with challenges; arranging payments; assessing the success; and then re-assessing need. Click here to look at a useful guide to commissioning produced by Norfolk CVS. Click here to look at the National Audit Office's Third Sector Commissioning Guidance.
Procurement is the technical and legal process of purchasing and is one part of the commissioning process. Procurement is subject to a wide range of legislation including the overarching obligation set by the European Commission that all purchasing by public authorities should be open, fair, transparent and proportionate (contracts should not include obligations that are disproportionate to the value of the contract). Procurement can be through grants or contracts.
More information can be found about Commisisoning and Procurement at KnowHow.
This page focuses on what you need to know if you’re making applications to public bodies in Manchester and Greater Manchester and focuses mainly on contracts and tenders.
Decommissioning is when an organisation which has received funding is unsuccessful in receiving further funding. There are procedures that all public bodies should go through before they decommission a service. Click here to look at Manchester City Council's Decommissioning Guide.
The biggest local commissioner of voluntary and community sector is Manchester City Council, followed by the NHS Clinical Commissioning Groups, followed probably by Office of the Police Commissioner. There are many other public bodies who commission, click here to look at a blog about who commissions.
Finding out about funding opportunities
This is not easy. Some funding is widely advertised, some is advertised only to a narrow range of organisations, some have formal processes, some, it just depends who you know or on history. As well as getting involved in a variety of networks at a minimum you need to:
1. Sign up to our ebulletin and read the funding section
2. Regularly consult our funding portal
3. Sign up to the Northwest Procurement E-Portal – The Chest
4. Sign up to the GMCVO bulletin
What should you apply for?
One of the mistakes that some VCS organisations make is to apply too narrowly for funding. This does not mean that you should apply for everything as this wastes your time and the time of the funders. However, many organisations in Manchester apply for funding from multiple sources by themselves or in partnership with other organisations. For example a refugee organisation might get funding for youth work, working with older people, working with people with mental health problems, arts and culture etc. all within the framework of a single service.
There are a whole range of actions that VCS organisations can take to make sure they are ready for applying for a tender such as: making sure that they have all the necessary policies and procedures; that they have staff who have sufficient time and expertise to apply for tenders; that they collect evidence of their impact; and they understand the local strategic priorities. This is an example of the tender-ready suggestions from a local authority. Love Your Tender is an excellent guide to getting your organisation ready to apply for contracts though some of the law has changed since it was written.
One of the main problems with tendering/contracting is that it is a whole new language taken from business terminology which, to begin with, can be difficult to penetrate. Click here for a useful guide to the terminology
A PQQ is a pre-qualification questionnaire. Sometimes it’s used as the first part of a tender process sometimes it is a single stage process. Manchester City Council generally ask for a large amount of information about policies, organisational structure and financial viability.
Only those organisations that pass a given threshold go to the next stage called an ITT (Invitation To Tender). This is the meat of the application, much like a grant application form, where you say what you want to do, how you’re going to do it, and why you think it will work. Click here for an example of a combined PQQ and ITT
Almost always you’ll also get a copy of the contract that you’ll have to sign if you’re successful. Read it carefully as it may have all kinds of requirements that you need to build into your costings or you cannot agree to for ethical reasons. Click have a look at a contract
Once the tender is open to applications there will usually be some manner of asking for clarification. If there is anything that is unclear then ask about it and if it’s still unclear then ask again. You are not marked on what questions you ask and every tender has areas of uncertainty in it.
Understanding the money
Commissioners approach money in a variety of ways:
1. They issue a very tight specification and ask bidders to say how much they would charge for providing the specified service. There may or may not be an upper limit set
2. They issue a broader specification, say how much money is available and ask bidders to say what they will do for that amount
3. They issue a broader specification often using outcomes and define precisely the target group including numbers, set an upper limit on the available funding, and ask bidders to put in a price at or below the maximum amount
4. They issue a broad specification but fail to identify precisely either the target group or their numbers and set an upper limit on the available funding, and ask bidders to put in a price at or below the maximum amount. This makes no sense but is used surprisingly often. As there is rarely enough money to do a good job, bidders often end up bidding for the maximum available amount
5. They ask for a price per person or per group for the service that you are providing. This is known as spot purchasing
6. Finally payment by results (PbR) is becoming more popular. There is usually some kind of upfront payment which is then followed by one or more payments depending on the results achieved, click here for more details
The scoring of tenders is often divided between quality and cost. Manchester City Council often uses a 50/50 split whilst the NHS uses a 70/30 split. For example an applicant might score 90% on quality but only 50% on cost and be beaten by a cheaper but lower quality applicant. Sometimes there is a quality threshold and any applicant that reaches that threshold is then judged on price alone. There is no quick or easy advice to be given on how voluntary and community sector organisations should approach this balance of quality and pricing. It’s very difficult and depends hugely on understanding what the funder is looking for.
The decisions on scoring are usually made by a panel. There will be an initial sift to remove applications that fail basic criteria. The remaining applications are passed on to the panel who, to a greater or lesser extent, follow the scoring criteria laid out in the tender. Then the lowest scoring ones are rejected and the highest scoring ones are accepted. All panels spend most of their time talking about the ones in the middle.
Once all the applications are approximately ranked they will go through a moderation process. This part of the process is rarely explained in the tendering documents. This is where wider political and strategic considerations are applied sometimes for the best of reasons -a voluntary organisation important to the city would go under without the funding, - sometimes for reasons that are less clear. These political and strategic considerations could be geographical, related to protected characteristics, about levels of political support for an organisation or a wide number of other reasons.
Once a tender has been awarded there is usually a negotiation before the contract is signed. This negotiation is critical to creating a good ongoing relationship and has to be properly prepared for. Click here for more information
This page was written by Nigel Rose, Strategic Lead (Commissioning) for Macc. You can follow him on twitter @NigelMacc.
One way of finding out more about commissioning is by reading his blogs, which include:
Commissioning - A Level Playing Field?
Who are the Commissioners?
The Benefit of Cost Benefit Analysis?
Is "The Chest" Fit for Purpose?
Commissioning and Integrated Care