GOVERNING BODY MEETING held in public 30 November 2016 Agenda Item 4.2
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1 GOVERNING BODY MEETING held in public 30 November 2016 Agenda Item 4.2 Paper Title Procurement of External Auditors APPENDIX A Procurement of External Auditors
2 Future External Audit Services: Eastern Cheshire Clinical Commissioning Group (CCG), South Cheshire CCG, Vale Royal CCG, Warrington CCG, West Cheshire CCG Procurement Project - Briefing Paper 1. Introduction 1.1 This report is intended to provide the Clinical Commissioning Groups (CCGs) with an update and overview of the Future External Audit Services Procurement Project. 2. Recommendation 2.1 The CCGs are invited to note the contents of this briefing and to endorse the procurement process and the award of a three year contract with a two year optional extension to the successful supplier. 3. Background 3.1 The current contract for the provision of External Audit Services for the Cheshire CCGs will expire on 31 March 17. The procurement process was conducted by Midlands and Lancashire Commissioning Support Unit (M&LCSU). 3.2 Using the national service specification and procurement guidance, the CCGs advertised for submitted proposals through the Crown Commercial Services Framework, ConsultancyONE RM1502 Lot 5.4 External Audit and Advice. 3.3 There are eight suppliers on this framework and all suppliers were invited to participate via M&LCSU s Bravo Solutions Portal. These suppliers are: BDO LLP Deloitte MCS Ernst & Young Grant Thornton UK LLP KPMG LLP Moore Stephens LLP PricewaterhouseCoopers LLP RSM Risk Assurance Services LLP 3.4 Submissions were invited on 21 September 16, with a closing date of 5 October 16. Three submissions were received from: Provider A Provider B Provider C The other suppliers declined to submit a response. 3.5 The evaluation of the tenders has now been completed and the process followed is outlined below. Page 2 of 5
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4 3.5.1 Submissions were scored on a scale of 0 (unacceptable) to 5 (excellent) for the qualitative aspects of each bidder s proposal, with sub-sections as detailed in Table Three-A. Table Three-A: External Audit Assessment Tender Scoring Specification Methodology & Approach (30%) Section Total Marks Available Section 1 - Understanding of business, challenges and risks 5 Section 2 - Approach to planning and reporting External Audit work 5 Section 3 Approach to delivery of External Audit Services 5 Section 4 Approach to liaison with various parties in the CCG, ie, Internal Audit, Audit Committee Specification Resources, Organisation Capability & Experience (40%) Section 5 Total Marks Available Section 5 - Quality of individual team members proposed 5 Section 6 - Appropriateness of leadership and experience 5 Section 7 - Robustness of own quality assurance procedures 5 Section 8 - Demonstrates capacity to fulfil contract 5 Costs (30%) Section Total Marks Available You must complete the separate costing template provided in the attachments section Collectively, the qualitative aspects were worth 70% of the overall marks Quantitative responses (contract price) were worth 30% of the marks and were to be scored in reverse order, ie, the lowest contract price would score 100% (30%) and the remainder would be expressed as an inverse proportion As stipulated in the Invitation to Quote, the successful bidder is the bidder scoring the highest combined qualitative and quantitative scores, expressed as a percentage Tender responses were scored by individual evaluators as detailed in Table Three-B. Table Three-B: External Audit Tender Evaluators Name Job Title Clinical Commissioning Group Alex Mitchell Chief Finance Officer Eastern Cheshire Gareth James Chief Finance Officer Western Cheshire Lynda Risk Chief Finance Officer South Cheshire; Vale Royal David Cooper Chief Finance Officer Warrington Jenny Underwood Risk & Performance Manager South Cheshire; Vale Royal Gareth Hall Audit Chair Warrington Kieran Timmins Audit Chair West Cheshire John Clough Audit Chair South Cheshire; Vale Royal Page 3 of 5
5 The Procurement lead from M&LCSU was Beverley Thomas, Head of Procurement Provider C was not invited to attend the interview as their overall score was substantially below that of Provider A and Provider B. Provider A and Provider B were invited to a bidder interview on 19 October 16. The panel members at the interviews are detailed in Table Three-C: Table Three-C: External Audit Interview Panel Members Name Job Title CCG Alex Mitchell (Chair) Chief Finance Officer Eastern Cheshire Gareth James Chief Finance Officer Western Cheshire Lynda Risk Chief Finance Officer South Cheshire; Vale Royal David Cooper Chief Finance Officer Warrington Gareth Hall Audit Chair Warrington Kieran Timmins Audit Chair West Cheshire John Clough Audit Chair South Cheshire; Vale Royal Beverley Thomas Head of Procurement M&LCSU (moderator) All suppliers were asked to present their response to the following topic, which was sent to them on 12 October 16: Describe your unique offer to the CCGs for external audit They were then asked a series of questions by the panel members, specific to their presentation and submitted bid A moderation session was held immediately after the last interview to generate an agreed single score for each question within each response. This included justification for each agreed score The final scores are detailed in Table Three-D. Table Three-D: External Audit Procurement Bidders Scores Supplier Methodology & Approach (30%) Resources, Organisation Capability & Experience (40%) Costs (30%) Total Score Provider A 28.50% 36.00% 30.00% 94.50% Provider B 25.50% 36.00% 29.22% 90.72% Provider C 24.00% 34.00% 25.86% 83.86% Once ratification has been agreed, each supplier can be notified of the outcome of the evaluation and it is intended that this will be done by 20 October 16. The decision will then be taken to each CCG s Governing Body for ratification. Page 4 of 5
6 As this is a procurement through an approved framework, there is no mandatory requirement for a standstill period. An offer of contract will be made to the successful supplier. The contract will be for a period of three years with an optional two year extension. The successful supplier is Provider A. 4.1 Next Steps 4.1 Upon the recommendation in this report being endorsed, an offer contract will be made to the winning supplier. 4.2 The CCGs will work collaboratively with the future External Audit Services provider to achieve full service commencement by 1 April 17. Page 5 of 5
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