Prepare requirements

As a minimum your specification should include:

• The product(s), service(s), or work(s) you need, and why they’re needed.
• The timescales and any key milestones you need bidders to work to.
• Outcomes you need to achieve or any technical specifications or standards that need to be met.
• The maximum budget available for the work.
• Whether the work will require information to be provided in the Welsh language as well as English.
• Who the main customer is that the successful bidder will work with on a day-to-day basis.
• How the work aligns with the Well-being of Future Generations (Wales) Act 2015 and the Wales Procurement Policy Statement principles.
• How the relationship and contract will be managed, including any Key Performance Indicators (KPIs) or Service Level Agreements (SLAs).

Here you should list the outputs/deliverables you expect the work to generate and by when they should be completed. Examples may be:

• Temporary staff
• Site landscaping
• Vehicle Leasing
• Surveys

Include your evaluation criteria and weightings. These should be communicated to all potential bidders.

You will need to consider how the contract quality and performance of goods and services will be measured as you develop your specification, especially if it is an output specification.

These factors should be included in the Management Information (MI) and KPIs you require from your supplier(s). MI and KPIs will be included in your ITT and Terms and Conditions.

Consider the following as you develop your specification:

• How are you going to manage the contract when it goes live?
• How will quality or service levels be measured, recorded, and maintained?
• What information should the bidder provide?
• Costs – how do you keep them from rising?
• How will issues be rectified?
• Where and how are deliveries made?
• How will processes be improved?
• What’s the payment schedule?

It is best practice that suppliers are contractually required to provide line item spend detail as part of their contract support.

It is also essential that a robust scoping process is undertaken at the earliest possible opportunity too.

Scope creep during a project, could look like this:

• In some business areas internal customers or budget holders may under or over specify on the level of support required e.g., for consultancy services, specifying a Partner when an Associate could deliver the brief – they’re suitable and can deliver at less than half the day rate.

Other alternatives when considering staffing and cost is whether it could be more cost effective to have a fixed term appointment working with you, as opposed to an interim who stays in place for much longer than the initial contracted period.

• An expert may want to deliver a whole package but the outcome of this may not add additional value to your business aim, and importantly could end up costing more money and time than you had planned for.

For example, you need to buy a records management system which links, shares and allows the updating of customer details.  The supplier thinks that you would benefit from a more complete package and adds additional products, so that you now have a resolution tool too… but that’s not what you needed, and the additional cost doesn’t result in a better outcome for you or your service users.

• Talk to internal stakeholders who are familiar with the current contract e.g., users of products or services supplied, contract managers, etc – it’s important to understand what’s working well, what’s not working so well (and why) and what realistically could be improved in the new contract.
• Gather data about the carbon emissions associated with the current contract – this will help set realistic yet ambitious targets in the new contract, to support Wales achieving net zero carbon status by 2030.

If available, supplier specific or ‘tier 3’ data is the most accurate data as they’re actual consumption metrics reported by suppliers.

For example, make and model of vehicles used, fuel in litres, kg or kWh or actual business travel in miles / kilometres, product specific emission factors calculated by the supplier, or organisational emissions allocated to products, services or works. Discuss this data and agree emissions reduction targets with key stakeholders.

More broadly, it’s important to baseline the current contract using the goals and ways of working contained in the Well-being of Future Generations (Wales) Act 2015, and the Wales Procurement Policy Statement principles.

Discuss with your stakeholders how the new contract could support greater alignment with these overarching frameworks.

• Share information early and often with the market – this helps increase transparency and prepare the market for the eventual procurement.
• Communicate your specification in the context of how the products, services or works to be procured support your organisation’s strategic goals and the overarching frameworks previously mentioned.

For example, publish a blog post that contains the draft specification, then hold a webinar to talk about this, and take questions from potential bidders.

This will help you:

• Identify the desired social value outcomes and wellbeing impacts.
• Identify risks and issues.
• Gain early supplier feedback on how the social value outcomes and wellbeing impacts might be achieved; and uncover evolving risks and issues as they see them.

There are different types of specification, further detailed below.

Technical Specification and Standards

Within a technical specification you should avoid reference which may favour or eliminate suppliers e.g. by asking for a specific material or goods.

You should not reference a specific make or source or to a particular process, trademark, patent, type, origin or means of production. For example, don’t specify “Hoover” when you mean a vacuum cleaner, or “Intel” when you mean a central processing unit of a personal computer.

In exceptional circumstances such mention may be justified:

• if the contract subject makes using it unavoidable; or
• where the contract subject cannot be described in any other way that is precise and able to be understood by all potential bidders.

In either of the above circumstances such mentions should be accompanied by the words “or equivalent”.

Output/Performance Specification

The specification should be written in “performance” terms which focus on the product function or service output required.

It builds the specification around a description of what is to be achieved rather than a fixed description of exactly how it should be done. This encourages marketplace innovation, allowing and encouraging suppliers to propose modern (including environmentally preferable) solutions.

Design Specification

In very exceptional circumstances a “design” specification may be unavoidable for a product or service. In such cases the type of requirement makes it essential to narrow the options by writing a detailed full design specification including exact details.

You can apply life-cycle costing as part of your specification and subsequent evaluation.

Life-cycle costing takes into account all of the identifiable costs of a product or service from its purchase, use, maintenance and end of life (e.g. collection, and recycling/disposal).

These can be direct costs like scheduled maintenance and energy used through the life of a road sweeping vehicle, and also less obvious external environmental costs, such as the cost of greenhouse gas emissions based on the energy use of the road sweeping vehicle.

These costs can only be assessed when:

• based on criteria that don’t favour or disadvantage any potential bidders;
• the assessment method is accessible to all interested parties;
• the data required can be provided with reasonable effort from all interested parties, including parties from other countries.

If using a life-cycle costing approach to award a contract, the procurement documents must state:

• the data bidders will provide; and
• the method used to calculate the life-cycle cost.

To include such values, you must be able to calculate and confirm them. This may include the cost of greenhouse gas emissions, other pollutant emissions, or other climate change avoidance costs.

It is important to differentiate between life-cycle costing, whole-life costing, and life-cycle impact mapping.

Whole-life costing focuses solely on the cost (£) of a product or service from cradle to grave. It takes into account purchase, operation, ownership and disposal costs. Environmental and social costs are not included.

Life-cycle impact mapping focuses on social and environmental impact rather than cost. It helps identify and assess impacts. It may help to focus attention on the disposal phase before the procurement is carried out.  This would allow you to build end-of-life management requirements into successful contract performance clauses and your own internal management procedures. For example the uplift and recycling of printer cartridges, reusing delivery pallets, etc.

Life-cycle impact mapping can be used alongside life-cycle costing as part of the procurement process.

If you purchase goods or services with specific environmental, social or other characteristics, labels can be used as a means of proof. The label will show the supplied goods or services correspond to the required characteristics. The Ecolabel Index will help you identify appropriate labels.

Samples or patterns may be issued or requested from suppliers when you cannot produce a detailed description of the requirement.

It’s good practice to keep a “sealed sample” for later comparison with the products supplied.

Samples, patterns and drawings may also form part of a design specification. Any samples that are no longer required should be returned to the tenderer.

Care should be taken that copyright is not breached when using samples, patterns, etc for specification purposes. Consideration needs to be given to the Intellectual Property Rights of the tenderers.

Simplification and variety reduction techniques can help reduce costs and obtain better value for money.

Specification simplification and variety reduction involves removing design complexities.

For example, removing different design types, sizes, grades, etc, by reducing:

• the number of item colours purchased; and
• the sizes of envelopes purchased and kept in stock.

This can be a valuable tool when creating a specification for large collaborative procurements.

Your specification should:

• Focus on outputs required without being prescriptive as to the method the supplier should use to provide it (output specification).
• Be sufficiently tight so that the product or service fits the user’s needs, but not so explicit that it discourages the supplier from proposing innovative solutions that optimise social value for money and consistent well-being impacts.
• Consider whether to include special conditions relating to the performance of the contract. This may cover economic, innovation-related, environmental, social or employment-related conditions e.g., community benefit clauses.
• Include criteria for acceptance of the products, services or works.
• Include service levels and a process for measuring ongoing performance.
• Avoid over-specification of performance (more than is fit for purpose or than is required) to ensure procurement at the optimum balance of whole life cost and quality.
• Take account of any e-Commerce requirements.
• Consider and communicate minimum cyber security requirements where these form part of award criteria.
• Detail environmental and climate performance levels, where appropriate.
• Consider suitability of design for all users and specify a conformity assessment e.g., ensuring a web site meets accessibility standards through specifying appropriate font sizes.
• Consider relevant legislation e.g., health and safety, equality, Welsh language.
• Consider all licensing requirements that a supplier must have to operate in a particular industry/sector, and which are relevant to the performance of the contract, e.g., a supplier of water and wastewater services must hold a current retail licence for the provision of water and waste services in Wales.

If the contract will involve, support, or rely on the digital processing of information, organisations should ensure that appropriate consideration is given to potential cyber risks and their management.

Next steps

Before carrying on, please check you’ve got everything you need, including:

• Your organisation’s authority to procure.
• Requirements are complete and accurate.
• Stakeholders’ needs are taken into account
• Future developments have been considered.
• Consistency with your organisation’s requirements and objectives, including business case; relevant legislation; procurement and contracts strategies; sustainability objectives and evaluation strategy.
• Risk assessment completed to ensure that related risks are closed or managed.

Organisations should ensure that all relevant procurement documents refer to the UK GDPR, and update their terms and conditions.

If you are in any doubt, you should seek legal advice or speak to your procurement department to help finalise your specification, ensuring that your Invitation to Tender and any other documentation that you issue is compliant with the UK GDPR and the Data Protection Act 2018.

More information on GDPR.