options - working collaboratively in competitive tendering situations robin fallas, macroberts llp

31
Options - working Options - working collaboratively in collaboratively in competitive tendering competitive tendering situations situations Robin Fallas, MacRoberts LLP

Upload: dylon-guiler

Post on 15-Dec-2015

230 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Options - working collaboratively Options - working collaboratively in competitive tendering in competitive tendering

situationssituations

Robin Fallas, MacRoberts LLP

Page 2: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Benefits of collaborative approach Procurement rules context DWP context Some Initial Considerations Collaboration options and legal issues that

attach Contractual framework Contractual framework with steering

group Jointly controlled entity

Page 3: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Benefits of collaborative approachBenefits of collaborative approach

Shared costs Access to broader competencies Better meet DWP expectations?

Increased chances of success

Page 4: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Potential drawbacks with collaborative Potential drawbacks with collaborative approachapproach

Unfamiliarity in market? Complexity / commercial clarity

Potential difficulty in explaining approach Requirement for legal advice/clarity on legal

structures Cost Alignment of organisations Potential issues with IPR / payments etc if

unclear Reliance on others

Page 5: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Key considerations for successKey considerations for success

Maximise your chances of winning by: Understand requirements; Ensuring that your choice of

collaboration partners reflects the Contracting Authority’s (CA’s) requirements;

Ensuring that the form of collaboration reflects the CA’s requirements.

Page 6: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Procurement rules contextProcurement rules context Public Contracts (Scotland) Regulations 2006 Regulation 28: ““consortium” means two or

more persons, at least one of whom is an economic operator, acting jointly for the purpose of being awarded a public contract” CA cannot treat bidder as ineligible on

grounds that no legal entity formed (Regulation 28(2))

CA may require, where justified, a consortium to form a legal entity before entering into a contract (Regulation 28(3))

Page 7: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Procurement rules contextProcurement rules context Information as to economic and financial

standing (Regulation 24): “Where appropriate an economic operator

may rely on the capacities of other members in the group regardless of the legal nature of the link between the economic operator and other entities” (Regulation 24(4)(a))

Information as to technical or professional ability (Regulation 25) Regulation 25(3) contains a similar provision

reflecting 24(4)

Page 8: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Procurement rules contextProcurement rules context

CA may request a statement of any proportion of the contract which the services provider intends to sub-contract to another person (Reg 25(k))

CA may require indication of part of tender to be subcontracted and identity of subcontractor (Reg 45)

Page 9: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Procurement rules contextProcurement rules context

Collaborative form/structure must comply with Contract Notice and

Contract Document requirements must meet pre-qualification

requirements should maximise chances of success

by reference to CA’s requirements and evaluation

Page 10: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Procurement rules contextProcurement rules context

Pre-procurement consideration Contract Notice Pre-qualification Invitation to Tender Bid submission Evaluation and award

Page 11: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

DWP ContextDWP Context

Partnership between public, private and third sectors

Integration with community strategies Multi-client contracts Stronger more consistent base of top-tier

providers Fewer larger, longer contracts – Prime

contractor model Special purpose vehicle or consortium

Page 12: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

DWP ContextDWP Context Contract Notice for Phase 1 Flexible New

Deal: Parent guarantees, performance bonds

(III.1.1); No specific legal form but each service

provider to be jointly and severally liable (III.1.3);

Restricted procedure with assessment of capacity and capability at pre-qualification (IV.1);

Most economically advantageous tender (IV.2).

Page 13: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Legal Form OptionsLegal Form Options

Consortium /contractual framework Consortium / contractual framework

with steering group Jointly controlled legal entity:

Company Ltd by shares LLP Company Ltd by guarantee

» Charity» CIC

Page 14: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Some Initial ConsiderationsSome Initial Considerations Consider partners / structure in advance Any restrictions on the model you can use? Who are suitable partners? Compatible? Contract specifications (likely to be)? Risks/liabilities likely in delivering the contract Risks in different approaches to collaboration Duration / exit strategy? Approach to management decisions? Ensure legal documentation covers off risk / sets out

clear structure Consider TUPE issues as relevant

Page 15: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Consortium - ContractualConsortium - Contractual

?

[DWP]

Lead Partner

??

Page 16: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Consortium - Contractual Consortium - Contractual Unincorporated; Contractual rights and obligations amongst members

including: Duration, rights and duties, scope of project

(flexible), sharing of assets (as appropriate), financing, restrictions on parties, rights of parties to participate in profits, exit provisions;

Normally declaration that not a legal partnership Need for one party to enter into contracts (guarantees

etc to be provided by others?) Profits generally accrue separately to parties (each

taxed according to its structure) May take form of prime/sub-contractor model

Page 17: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Consortium – Contractual with Joint Consortium – Contractual with Joint Steering GroupSteering Group

?

[DWP]

Lead Partner

??

Joint Steering Group

Page 18: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Consortium - Contractual with steering Consortium - Contractual with steering groupgroup

As previous but with steering group as forum for decision making

Higher level of collaboration Inclusion of provisions – establishment of

joint steering group - status and form Inclusion of provisions – decision making

between partners and joint steering group

Page 19: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Contractual Frameworks Contractual Frameworks Advantages

May be easier to set-up

Independent decision making for each party

Avoids additional formalities

Costs Exit Flexibility

Disadvantages Less “joint” decision

making Potential

complications with third parties

Potential unlimited liabilities (reck /neg etc)

Risk for lead party Potential distortions

in decision-taking

Page 20: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Jointly Controlled EntityJointly Controlled Entity

?

[DWP]

JCE

?? ?

Page 21: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Jointly Controlled EntityJointly Controlled Entity Dedicated corporate body Can facilitate clearer legal framework with ability

to adapt Can allow for clear mechanism for

payments/recycling of returns Limited liability (though bear in mind parent

guarantee and joint/several liability) Can assist in governance / management of

contract (higher degree of joint decision making) Board – can result in high degree of joint

management of risk Assets and liabilities pooled in single venture

Page 22: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Jointly Controlled EntityJointly Controlled Entity Advantages

Closer relationship More robust

governance Clear decision

making Limited liability Separate entity -

employ/hold property;

Financial flexibility Minimal disruption if

change in partners

Disadvantages Regulation “Limited”? Set-up costs / audit Administration Reporting/Minuting Separate Accounts Company Law Harder to disengage Separate Resources

Page 23: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Forms of Jointly Controlled EntityForms of Jointly Controlled Entity

Profit making/distributing Co Limited by shares LLP

Non profit-making Co Limited by guarantee

CIC / Charity considerations Option to carry out services or to sub-

contract

Page 24: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Co Ltd by sharesCo Ltd by shares

Parties are members Articles contain detail on investment /

decision taking / shares Can realise stake through shares or

payout of surplus assets Shareholder Agreement setting out detail Care with conflicts Companies Acts apply Tax considerations on set-up

Page 25: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

LLPLLP Where two or more members wish to carry on

business with a view to profit Clear distinct legal entity Parties are members/designated members Members free to regulate decision making Members taxed according to their tax status Members ultimately responsible for

acts/omissions Flexibility but no readily transferrable stake Tax considerations on set-up

Page 26: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Co Ltd by guaranteeCo Ltd by guarantee

Suitable where no intent to derive financial return

Clear distinct legal entity Members are parties Built in right to representation Prohibition on distribution of profits Liability of members limited Companies Acts apply

Page 27: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

How to choose?How to choose?

What does DWP want? What works for you/partners?

Clarity on decision making Dealing with risk Returns mechanism Exit strategy Flexibility Resources

Page 28: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Contractual Frameworks – Key Contractual Frameworks – Key considerationsconsiderations

Clear objectives Duration Responsibilities

lead? service levels? Timetable?

Decision-making process

Point(s) of contact

Joint Steering Group Contribution of

funds/assets Sharing of risk Profit sharing /

bearing of costs Monitoring and

review Termination Dispute Resolution

Page 29: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Jointly Controlled Entity – Key Jointly Controlled Entity – Key ConsiderationsConsiderations

Where CLS: Share capital Capital Voting Further issue /

transfer of shares Meetings Board composition Remuneration Powers/

proceedings

Shareholders/Members Agreement:

Resources Property Borrowing Business Plan Reserved matters Disputes Confidentiality Terms of main

contract Terms to be included

in sub-contract

Page 30: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

ConclusionsConclusions

Form depends on: what DWP wants your organisation’s ethos approach to risk approach to resources approach to decision making approach to profit (recycling of)

Page 31: Options - working collaboratively in competitive tendering situations Robin Fallas, MacRoberts LLP

Questions?