Negotiating a good deal with the Government!

Blue-plate had the recent experience of supporting a client’s bid team in responding to a Cabinet Office Invitation To Negotiate (ITN) in respect of a large scale outsourcing contract.  An ITN response is developed in dialogue with the Cabinet Office to enable them to select a preferred supplier offering the best  win-win sustainable deal for the UK Government. This was a new experience for Blue‑plate and the lessons learned for future ITN’s included:

• Understanding the Government’s objectives – The need to fully appreciate the Government’s objectives for the contract both commercially and politically.  These objectives will be set-out in the ITN but will need to be fully explored and clarified during the face to face dialogue sessions.  A consensus understanding within the bid team helps to prioritise the requirements and how they can be managed within the context of a commercial response.  The political drivers may be less transparent but will surface during the dialogue sessions and provide a deeper understanding of the context for the ITN.  As well as the financial objectives of reducing costs, accessing private sector capital and expertise, the Government will also be keen to avoid the political risk that may arise from direct accountability for any consequent organisational restructuring and selecting a supplier with a tarnished brand.
• Obtaining early clarity and agreement to the strategic fit and risk appetite – At an early stage in the response process, the bid team must manage their own internal stakeholders, governance and oversight processes for the bid.  A key element will be to ensure that the risks and potential range of the up-front investment costs are fully appreciated at the outset, in order to avoid the embarrassment of cold feet during the later phases of dialogue.
• An integrated response – There will be a number of workstreams and subject matter experts engaging with the Cabinet Office concerning the various aspects of the response and contractual terms and conditions.  These workstreams may include legal and commercial operations, technology, human resources, finance.  An overall bid and project manager will be required to co-ordinate activities and  ensure that the right hand knows what the left hand is doing; especially when working at pace to tight drop dead dates.
• Resources – make sure that the right set of capabilities and resources are available throughout the process, taking account of holidays and other contingencies.
• Clarity not word count – make it easy for the Cabinet Office to understand the response in relation to the exam question.  Keep the language simple in good English and well signposted as to the flow and key points.
• Negotiate – Last but not least is to take advantage of the opportunity to negotiate the best deal.  The Cabinet Office will be keen to understand a bidder’s commercial drivers and to accommodate them where sensible and possible to do so.  The Cabinet Office team in dealing with a number of bidders can quickly spot common concerns that they may address directly with each bidder or in revising the ITN.  The best deal does not mean the cheapest price but will be a mix of price, political risk, supplier brand, quality and confidence that the supplier can deliver over the long term.