Birmingham Airport Response REDACTED (for external use)

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1 The aim f the questins belw is t allw us t understand hw yu cnducted the recent pen tender prcesses. The questins frm a brad guide t ur areas f interest. We request that as well as either written r ral respnse that yu prvide dcumentary evidence thrugh which yu can supprt yur respnse. The supprting material may be in the frm f dcumentatin prvided t bidders, meeting ntes, presentatin r reprts. Alngside the questin we have als highlighted sme key utputs that we wuld like t develp ut f this questinnaire. Birmingham Airprt Respnse REDACTED (fr external use) Questins Linked Outputs BHX Respnse 1. What was the prcess that yu emplyed Timetable f the prcess when seeking t tender fr this service? Key milestnes in the prcess 1.1. Did yu undertake any market engagement prir t pening the tender prcess? 1.2. What were yu prpsed the stages f the assessment? 1.3. What infrmatin if any did yu prvide t the bidders prir t them bidding? 1.4. Hw was the tender structured t take accunt f the need fr bth technical cmpetence and t deal with the cmmercial issues? Descriptin f the wrk required prir t a tender event fr TANS. Tender prcess undertaken in cmpliance with EU Prcurement Directives (Utilities). The services f an external cnsultant were emplyed t assist with the tender prcess. There was n frmal engagement with any market, but a call fr cmpetitin ntice published in the OJEU wuld have meant that interested parties acrss Eurpe wuld have been aware f Birmingham Airprt s requirement. The call fr cmpetitin ntice asked respndents t express an interest in the prcurement pprtunity, but at the same time they wuld have t demnstrate cmpetence and capability, i.e. that they culd pint t relevant experience in prviding a similar scpe f services in a similar envirnment under an equivalent regulatry framewrk. The tender prcess was split int three Lts : Lt 1 Air Traffic Cntrl Services Lt 2 Air Traffic Engineering Services Lt 3 A cmbinatin f Lts 1 and 2

2 The OJEU ntice als made it explicit t all ptential bidders that the Airprt intended, in parallel, evaluating and ptin t in-surce the ANSP functin and therefre may nt award a cntract at the end f the prcess The key milestnes in the prcess were as fllws: Obtain Expressins f Interest frm interested parties July 2012 Assess Expressins f Interest (Respndents were required t demnstrate cmpetence and capability ) Issue Invitatin t Tender dcumentatin t thse rganisatins that had demnstrated adequate cmpetence and capability September 2012 On-site briefing meeting with tenderers End f September 2012 Access t Data Rm cntaining details f the current peratin including MATS Part 2 and current staff details including pay, allwances, terms and cnditins (names redacted) Nvember 2012 Tender submissins End f January Barriers within the prcess 2.1. Did yu seek t understand the ptential barriers fr bidders prir t tender? What, if any, barrier were identified and what steps did yu take t mitigate these? 2.2. Were there any issues r barriers that arse during the prcess that made the Understanding f issues and barriers in the prcess and hw these have been circumvented r therwise. N attempt t understand barriers prir t the tender (they were well knwn t the Airprt) but the tender prcess was designed t test the market and the evaluatin f an inhuse slutin was always a genuine ptin frm the very beginning as ppsed t a stalking hrse as sme bservers viewed. The nly large barriers were:

3 tender mre difficult t enact? 2.3. Hw did yu present issues such as trust f a prmise and the interactin with Lndn Apprach? Hw were they vercme r nt? Trust f a Prmise (TOAP) which we believed was a disincentive t ther bidders in part because it was an unknwn that had never been tested since the agreement was made. The ability fr ne large player with s many airprts (and en-rute centres) t ffer much wider and mre diverse lng-term career pprtunities t cntrllers Infrmatin in the data rm althugh ften redacted was nly available in hard-cpy and ptential bidders were nly able t make ntes n cpying f infrmatin which did limit its usefulness. The interactin with NERL was f cncern but rbust assurances were given that the Airprt r anther prvider wuld be given fair and equitable service. Issues with TOAP were nt really vercme with respect t ther bidders s when the decisin was taken t in-surce the Airprt fllwed the prcess as laid ut in the agreement having taken legal guidance. 3. Wh were the bidders? 3.1. Which cmpanies shwed an interest in bidding? Did yu apprach particular cmpanies t encurage bids? 3.2. Which cmpanies submitted bids? 3.3. Which cmpanies prvided suitable bids? List and cntact details fr all parties interested in bidding List f which bidders entered each stage f the prcess Fur rganisatins expressed an interest in the prcurement pprtunity including the incumbent service prvider Fllwing infrmal discussins with all parties, tw written expressins f interest were received frm the incumbent and ne ther prvider Bth rganisatins were deemed capable and cmpetent and were issued with an ITT dcument.

4 Only ne bid, frm the incumbent was received 4. Hw were the bids evaluated? 4.1. Did yu set ut an verall aim and bjectives fr the tender? Were bidders aware f this? 4.2. What was the verall evaluatin framewrk? 4.3. Was the framewrk staged such that technical cmpetence had t be prved early in the prcess with cmmercial issues taken later? 4.4. What was the range in terms f service and price ffered by bidders? 4.5. Where bidders able t mdify their initial bid fllwing feedback? If s and what stages? High-level view the aims and bjectives f the tender prject and the verall evaluatin framewrk used by the airprt t meet thse bjectives Understanding f the feedback lps with in the prcess Understanding f the range f credible bids received The assessment f tenders recgnised the need fr an assessment f technical and cmmercial factrs. Cnsequently a balanced screcard apprach was taken t the evaluatin f bids as fllws: Past Perfrmance & Capability 20% Requirement Cmpliance 25% Transitin Prcess and service sustainment 30% Price (assessed ver 5 years) 25% Under EU Prcurement Directives, it is mandatry t publish the evaluatin criteria in the ITT dcumentatin. All bidding parties were, therefre, aware, f the evaluatin criteria prir t the preparatin and submissin f bids. As the Airprt was fllwing the Negtiated Prcedure, revisins t initial bids were permissible as part f the clarificatin and negtiatin phases f the prcurement prcess. The evaluatin criteria were structured such that demnstratin f technical / regulatry cmpliance was required befre any cnsideratin f cmmercial aspects f the bid. 5. D yu cnsider that yu have benefited frm hlding an pen tender? 5.1. What was the estimated cst f the tender t the airprt peratr? Will this be less in future tender runds? Understanding f the gains, r therwise, t cmpetitive tender and the likelihd f the prcess be rerun n cntract renewal. The benefits were limited by the number f credible tenderers that reached the final stage There was nly 1 cmpliant bid frm the incumbent

5 5.2. What des the airprt peratr cnsider wuld prevent it frm hlding an pen tender in the future? The estimated cst f the Tender exercise was c 150k - 200k made up f third party cnsultancy, administratin and Management time expended. Nthing wuld prevent us hlding an pen tender in the future but having taken the service in-huse, giving better value and cntrl, we wuld need t be cnvinced f real benefits in the lng-term befre cnsidering utsurcing again 6. Any further cmments? At the time f tender, it was clear that the pprtunity had cme t early fr Eurpean prviders. It was evident that they were gearing themselves up t bid fr pprtunities in the UK, but had the exercise taken place a year later (end f 2013) it is likely that bids frm Eurpean entities wuld have been frthcming.