Problem: Laborious and time-consuming purchasing procedures
As government projects are particularly important in tackling societal challenges, strict procedures are needed to guarantee that awards are granted based on objective criteria. The obligatory use of procedural rules is deemed necessary to guarantee that government awards are granted transparently and in a non-discriminatory fashion. In order to be able to guarantee the legality of procedures, the following principles of the Public Procurement Law must always be taken into account with tenders: Equality, proportionality, transparency and objectivity.
However, there is a growing interest in innovation in purchasing procedures in the public sector. In 2014 the European Commission revised guidelines on procurement to reduce the administrative burden and give small businesses a chance of being awarded government tenders. In response to this, in 2016 the Dutch government made several changes to its national laws and legislation (Amended Procurement Act 2012). Though this was a step in the right direction regarding the modernisation of purchasing procedures, it does not alter the fact that there is still room for improvement.
Many governments (and bidders) wrestle with implementing purchasing procedures, which involves risks relating to purchasing quality. The procedures are time-consuming with a high administrative burden for both bidders and purchasing parties, which can lead to bureaucratic situations that are not always suited to the assignment involved. This can discourage parties, limits interaction and also reduces creativity. As this involves risks for purchasing quality, it is important to find ways to design more inspiring and more effective procurement procedures.
The Proportionality Guide offers room for creativity in relation to procurement procedures. The Procurement Act 2012 states that procuring authorities can themselves determine the deadlines and various steps of non-European procedures, as long as bidders are informed clearly about the course procedures will take, exactly what the assignment is and on which criteria the assignment will be awarded.
Case: Purchasing for the KIK-V programme
In this case, the tender is part of the Chain Information on Quality Nursing Home Care programme (KIK-V), being carried out by Zorginstituut Nederland at the request of the Ministry of Health Welfare and Sport. The case is part of a broad search for valuable quality information on nursing home care, that examined possibilities for making use of exploratory and narrative information. The topic, which shares common ground not only with the care sector, but also with science and technology, was well-suited to an innovative form of tendering, making use of existing knowledge from various disciplines in order to arrive at innovative solutions.
In October 2018 the choice fell on a Multi-faceted Private Tender (MVO), a form of national tendering procedures, because the assignment was valued at below the European threshold value so it did not have to go through the European tendering process. According to the rules, the contracting authority can invite a number of applicants (at least 3 and no more than 5) to submit a tender based on a document containing all relevant information.
An advantage of MVO procedures is that they allow a great deal of freedom in designing the procedures, as long as the lawfulness is not impinged. With normal procurement procedures, the contracting authority itself selects bidders. This is favourable as it means that specific suppliers can be sought out. However, it requires a thorough insight Ð that will not always be there Ð into the market and objective grounds on which bidders are selected. As only a small section of the market is approached, the amount of competition is limited and this does not always result in the best price-quality ratio.
Another limitation of MVO procedures is the lack transparency. The closed nature of the procedures, which only allows contact between bidders and purchasing parties via the Information Notice, limits possibilities for interaction. This usually involves tight deadlines, both when asking and supplying answers.
Solution: Innovation in purchasing procedures
To avoid disadvantages and make optimum use of the process, Zorginstituut sought an innovative way to design the MVO procedures so as to encourage market forces and creativity, make the process a multidisciplinary approach and thus get the assignment off to a flying start. A form was chosen that is in line with current market dynamics: the use of a hackathon in implementing tender procedures.
Hackathons are events at which professionals with various types of expertise are gathered together to solve problems in a short, fixed period (often 24 hours). A hackathon is highly suited as working method to encourage dialogue, promote collaboration, share knowledge and generate creative ideas. This innovative method for tenders is described later step-by-step.