Aggregated Procurement

Transcription

1 Aggregated Procurement Educational material TreeSpa Workshop 27 August 14 September 2007

2 Introduction An Aggregated Procurement Scheme is a complete bid process, with the purpose to support and speed up the market introduction of technology. The scheme is often preceded by a technology development project phase. The aim with aggregated procurement is to get new products, systems, or processes that satisfy the market demand better than the products already available on the market. Aggregated Procurement Schemes can therefore be regarded as a supplement to the market forces. Aggregated Procurement Schemes are not something unique for Sweden, but has for example been used by authorities and private organisations in both Europe and the United States. Aggregated Procurement is not about introducing any new technology, that otherwise would have difficulties to be established. Rather, it is about speeding up the development or market introduction. Aggregated Procurement also leads to increased know-how, education and attention around energy efficient technology. Each single measure in an Aggregated Procurement process is more efficient as a link in a chain than as a separate activity. The advantage with Aggregated Procurement Schemes is that by assembling a larger number of potential customers into a group with an aggregated purchase volume, the possibility to influence the manufacturer increases. The manufacturers on the other hand might for instance be attracted by the potential to reach new markets and the general attention on their products. Feasibility study Purchaser Group Technical Specification Tendering Process Evaluation Dissemination Further development

3 Feasibility study During the feasibility study phase, several of the most important issues need to be discussed. It is thus of key importance that a lot of focus and time is put into this phase. The feasibility study should define what technology should be purchased. Therefore it is important to discuss the relevance of the chosen technology. The following questions need to be answered: Is this technology of key importance for the enhancement of the wealth creating activities in rural Tanzania? Is there a potential for improvement/development of the technology in comparison to the technology currently available on the Tanzanian market? What technology is currently used? What is the best technology currently available on the Tanzanian market/global market? Thereafter, it is necessary to analyse potential tangential technologies that could be influenced by or could influence the aggregated procurement scheme. Are there any tangential technologies or tangential markets? If yes, how will they affect or be affected by the project? The full chain from the manufacturer to the end user needs to be identified (see illustration below). What actors will be involved? What impact will they have on the project? Do they need to be involved, what information/knowledge do they possess, etc. During this phase it is also important to analyse the market for the chosen technology. What is the demand for the chosen technology? Are there any specific conditions that need to be specified? What capacity/size is needed? How many products will be possible to sell? What does the Tanzanian market look like? What technology/parts of technology can be produced on the domestic market? What maintenance and repair should be provided? What does the purchaser group look like? Is it organized, homogeneous, geographically spread out? What prevents the purchaser group from purchasing this technology today? Availability, financing, etc. To be able to evaluate the tenders it is necessary to identify if there is a need of for example, certain measurements of the performance or if there are any standards that must be taken into account. This should be carried out during the feasibility phase. During the feasibility study, it can also be necessary to discuss elements that might enhance or impede the project. Both elements that can be controlled and that are out of the projects control should be identified. It could also be of value to discuss whether a procurement scheme is an appropriate method to purchase this technology, or if there is another method that would be more advantageous. Component Manufacturer Supplier User Wholesaler Distributor User Decision-maker Actor Participator Influencer Flow of products Information

4 Purchaser group The composition and devotion of the purchaser group is of decisive importance for the completion of an aggregated procurement scheme. The group must consist of people that represent a combined purchaser volume large enough to create an interest in the procurement scheme from manufacturers. Each person in this group must feel a responsibility for this scheme and feel that this new product represents an important part of the development of their work and organisation. It is an advantage if the purchaser group consists of a wide range of representatives. Some people representing the users, some the product owners, some technical experts, etc. It is also important that the people in this group have the mandate from their employer to make decisions in questions that concern this procurement scheme and that they effectively can inform their organisation about the procurement scheme and its results. The purchaser group can either consist of people specific for the chosen technology or consist of a fixed group of people. There are advantages and disadvantages with both specific groups and fixed groups. The advantage with a fixed group is that the members are already acquainted with each others specific needs and desires. This process can otherwise be fairly time consuming. A fixed group can also generate ideas for new products that could benefit from an aggregated procurement scheme. However, by having a fixed purchaser group, it can be difficult for new actors to join. There is also a risk that the group will loose its dynamics due to a high level of routines. Technical specification The technical specification should include all the requirements for the specific product and be enclosed with the general conditions for a procurement. The specification should not only include specifications regarding energy, but also specifications regarding security, health, installations, standards, service and costs. The specification should be divided into two different levels, namely requirements and requests. The requirements are defined as specifications that need to be fulfilled for the tender to be considered and requests are defined as specifications that would be exceedingly appreciated if they are fulfilled. The technical specification should also include a description of how the tenders will be evaluated. Since an aggregated procurement scheme aims to stimulate the introduction of more efficient technology, the requirements should be fairly demanding. However, it is of utmost importance, that these demands can be achieved. It is also important, that these requirements not only suit the Tanzanian standards, but also international standards. Therefore it is necessary to arrange a prebidding meeting, where manufacturers are invited to discuss the specifications. Before such a hearing, the purchaser group should have completed a draft of the technical specifications and be prepared to discuss its content. The advantage with a specific purchaser group is that the members are more deeply devoted to this specific product and the level of innovation can thus be more abundant. In addition, a specific purchaser group can more easily attract and take in everyone that is interested in the specific technology. The greatest disadvantage with a specific purchaser group is that it requires more time and resources than a fixed purchaser group.

5 Tendering process After the purchaser group has agreed on the technical specification, the tendering process should be initiated. In order to create true technological development or market introduction, the market competition is of crucial importance. It is imperative to engage both domestic and international manufacturers. It can be necessary that the purchaser group establishes contacts with both manufacturers and distributors at an early stage. By establishing a good relationship early on in the project, it is easier to estimate the time needed for the tendering process. It can also facilitate the purchaser group with information about product development, which in turn can reduce the time needed for the tendering process. Tendering evaluation The tendering document should include the general conditions, the technical specification, as well as a description of the technology evaluation procedure. The testing and evaluation usually involves the following three phases: 1. During the first phase, it should be clarified that the tender includes all the required documents and specifications. 2. During the second phase, it should be clarified that all the required specifications are fulfilled and the number of fulfilled requested specifications should be counted. It could also be of interest to evaluate if the specifications have been exceeded. This phase might include estimates, laboratory tests, etc 3. During the third phase, the product should be evaluated in its actual environment. Dissemination As previously mentioned, it is necessary to create an interest for the aggregated procurement scheme among manufacturers. In order to achieve this, it is often necessary to arrange dissemination activities. This process could either consist of an individual activity or a combination of several activities, for example: Information. The winning technology will benefit from disseminations through campaigns, newsletters, articles, seminars, workshops, etc. The marketing campaign should be initiated already during the feasibility phase of the aggregated procurement scheme. Support to initial-series. The first series of the new product can be given financial support in order to facilitate market penetration. Demonstration sites: To simplify the penetration of the market, demonstrational sites can be useful. It is not always necessary that the responsibility of the dissemination activities lies on the financer. The winning manufacturer or distributor must actively establish contacts with relevant distributors and attain resources for the dissemination of their product. The purchaser group should also participate in these activities. The evaluation also includes criteria which are not correlated to the technological performance, such as the producers competence, presence in Tanzania, etc. After all the tenders have been evaluated according to this procedure one or several winners are announced. It is, however, possible for the purchaser group to reject all the tenders, and thus not announce any winner.

6 Checklist for an Aggregated Procurement Scheme Proficient planning of the entire project and preparations for the following steps in the process are necessary in order to succeed with a large project such as an aggregated procurement scheme. Thus, it could be beneficial to have a check-list for all the phases of the project, where all the significant issues are listed. One example of a checklist for an Aggregated Procurement Scheme can be found below. Mapping Feasibility study How relevant is the product/process/system for the national development? What is the upgrading potential? What is the size of the aggregated purchasing volume? What equipment and tangential equipment will be affected? How will they be affected? Which actors will be affected? What does the chain from the manufacturer to the user look like? What impact will the intermediate link have? Would it be beneficial with study visits at the manufacturers? What does the market look like for the product/process/system? Domestic and international market? Why is this product produced/purchased? Is an Aggregated Procurement Scheme an appropriate method to purchase this technology, or is there another method that would be more beneficial? What are the driving forces behind the procurement scheme? Evaluation Evaluation strategy for this new technology Plan for the evaluation of the entire scheme, what criteria should be evaluated? Factors of success Risk analyses Schedule Need of resources Composition of the group Devotion, responsibility, and mandate Purchaser group How large is the combined potential represented by the purchaser group? Illustrate the trustworthiness that this new product will achieve an interesting market share for the manufacturers Take into account the importance of networking for innovations Ensure enough time and resources. Ensure the durability of the work of the purchaser group

7 Technical Specification The technical specification should consist of all the requirements of the new technology Functionality requirements Required and requested specifications The requirements should be possible to achieve The technical specification should be valid also in an international perspective Arrange a pre-bidding meeting where the technology can be presented for and discussed with manufacturers, distributors, and another actors that are affected by the project Define how the purchaser group will verify and evaluate the specifications Tendering Process In order to create true technological development or market introduction, the market competition is of crucial importance. It is, thus, imperative to engage both domestic and international manufacturers The purchaser group should establish contacts with both manufacturers and distributors at an early stage Schedule sufficient, but not excessive time for the tendering process Inform the manufacturers and the distributor about other successful aggregated procurement schemes Tender Evaluation Review the tender and check that all the required information and documents are included Review the tender and check that all the required specifications are fulfilled Review the tender and count the number of requested specifications that are fulfilled Make a pilot study in order to test the new technology in its actual environment If necessary, perform a behavioural study that illustrates the consumer reaction to the new technology Announce one or several winners of the aggregated procurement (If all the received tenders are rejected, no winner will be announced) The minimum requirement to win the aggregated procurement schemes is that all the required specifications are fulfilled

8 Dissemination The development of new technology or introduction of new technology by an aggregated procurement scheme requires that true buyers purchase the new technology A combination of a number of dissemination activities are often required Define the dissemination activities at an early stage of the project Information, such as campaigns, newsletters, articles, seminars, workshops, etc Transfer of risks, such as initial-series support, demonstrational sites, etc Pilot project: An absolute minimum requirement to disseminate the new technology is to install the first products Focus the dissemination activities to a predetermined defined period of time in connection with the announcement of the winning technology Sensibility to the state of the market and good timing needs to be considered The dissemination activities are both the financer, the purchaser group and the winners responsibility Additional development It is sometimes necessary with additional development of the technology although all the required specifications are fulfilled Initial problems with the technology might have to be adjusted for All aggregated procurement schemes stimulate technological development or market introduction although all the predetermined goals are not achieved How can additional technological development and continuation of the technological development be stimulated in projects with satisfactory results? Evaluation of the aggregated procurement scheme Define an evaluation strategy at an early stage of the project What is to be evaluated? Evaluate the process from the feasibility study to the additional development How detailed should the evaluation be? Should secondary effects be evaluated and documented? Reference Persson, A., 2004, Teknikupphandling som styrmedel metodik och exempel, Statens Energimyndighet

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