Category: People

Customers & People in General

Contract Modifications

As the consequences of COVID-19 continue, it is reasonable to assume that making changes to commercial contracts may become more of a necessity both now and over the next number of months as requirements and demands change due to this global pandemic.

Allowing and regulating contract variations should be a standard feature of all contracts once any proposed variations are planned accordingly

The reasons for the variation should be clearly documented and it is important that any variations are not used to mask poor performance or underlying problems. The variation impact on original timeframes, deliverables and value for money should be assessed thoroughly before undertaking any changes.

There are specific laws that apply to changes in Public Sector Contracts.

Material changes to a contract after it has been awarded give rise to a new contract which needs to be retendered.

The test for material change is-

Does the change introduce conditions, which had they been part of the initial award procedure, would have allowed for the admission of the tenders other than those initially admitted?

Does it extent the scope of the contract considerably?

Has the economic balance of the contract shifted in favor of the contractor in a manner not provided for in terms of the initial contract?

However, there are some steps that public bodies can take legally to make changes mid-contract which are-:

Review Clause Exception:

Provision for a modification included in the original Procurement Documentation/Tender which states in clear and precise terms the conditions under which modification provisions may be used stating the scope and nature of such possible modifications. It is imperative that any such clauses don’t alter the overall nature of the contract

Interoperability Exception

Where there is a requirement for additional works, services or supplies not included in the initial procurement and where a change of contractor cannot  be made for economic or technical reasons and it would cause significant inconvenience or substantial duplication of costs for the contracting authority. Must not exceed 50% of the original contract value and an OJEU notice of the change is required.

De-Minimus:

A modification to the contract is permitted where the value of the modification is below threshold and below 10% of initial contract value for services/supplies (15% for works). The modification must not alter the overall nature of the contract.

Unforeseen Changes:

A modification is necessary due to unforeseeable circumstances e.g. Covid 19. Such modifications should not exceed 50% of the original contract value. Necessary to keep written justification with reference to specific facts outlining the reasons for the modification. Publication of OJEU modification notice is required.

Change of Contractor:

Allowed following corporate restructuring ((e.g. takeover, merger, insolvency) and new operator fulfils qualitative selection criteria.

The specification and administration of change is vital as it needs to be fully documented and agreed between both parties and any additional demands on the incumbent supplier must be carefully controlled.

Change can be difficult however, often necessary.

 

Brexit Helpful Tools and Supports

With two years negotiation period since the 2016 Referendum and two further years expected with the transition period, there have been many helpful tools and supports developed to aid businesses navigate the Brexit quagmire. Many of these helpful tools and supports are available free-of-charge, more are highly subsidised or grant-aided while some paid solutions exist also.

As a starting point, Arvo have a range of Brexit specific tools, templates, reports and insights available online here. If you have any queries on these Arvo Tools, feel free to email [email protected] for a prompt response.

While Arvo are aware of many third-party tools and solutions also to support your Brexit risk management, with a selection outlined as follows

Brexit
Helpful
Tool
Description Website
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Brexit SM Scorecard (Enterprise Ireland) A Starting Point to help businesses to begin preparing a strategy and ready their teams in terms of planning and shinning a spotlight on some of the key operational areas that may be exposed.https://prepareforbrexit.virtual-adviser.com/

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Online
Assessment
Tool
Invest Northern Ireland’s assessment tool covers Business strategy, Operations, Innovation, Sales and Marketing, Finance, People and Management, Legal and regulatory. https://www.investni.com/get-ready-for-brexit/brexit-assessment-tool.html

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Tariff
Checker
Intertradeireland provide a quick guide to the potential WTO Tariffs that may be applied post-Brexit.https://intertradeireland.com/brexit/tariff-checker
  HMRC Trade Tariff: look up commodity codes, duty and VAT rates https://www.gov.uk/trade-tariff

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Brexit
Online
Toolkit / “Brexit: a guide for your business”
IBEC offers an Online Toolkit to help business preparation online. A Guide for your Business. https://www.accenture.com/ie-en/insight-brexit-guide-your-business

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No Deal Brexit Plans /
Brexlist Brexit Checklist /
Brexsure Brexit /
Supply Chain Audit /
Brexit Directory
The Ready for Brexit platform is independent and objective. It aims to help businesses and organisations manage the challenges and opportunities that Brexit brings. https://readyforbrexit.co.uk
PS: Use ARVO190213 as a Discount Code

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In addition to the above tools/systems, there is a plethora of information available online with downloadable Templates, Documents and Files from many organisations such as those listed below. Many of these organisations also provide Brexit financial supports, experts, grants and initiatives available to assist most businesses through this unprecedented economic event e.g.

Organisation Description Website

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Enterprise Ireland Enterprise Ireland has a wide range of supports, including free Online Courses and Webinars, and fully-funded and partly-funded Consultancy engagements, to enable Irish businesses to take critical action and address their exposure to Brexit https://prepareforbrexit.com

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Intertradeireland IntertradeIreland offers 2 Vouchers to provide financial support to help understanding Brexit, Online Courses to help SMEs to prepare for Brexit and beyond, also Tariff Checkers and Events that offer information and Topics about Brexit, advises and outcomes. https://intertradeireland.com/brexit/

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Invest Northern Ireland Invest Northern Ireland offers an Online assessment tool, Regional Workshops a financial assistance in form of a Preparation Grant and a one-stop resource of best practice guides, information advice and support to help in preparing for Brexit on their Brexit website. https://www.investni.com/features/invest-northern-ireland-launches-get-ready-for-brexit-campaign.html

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Bord Bia Bord Bia offer a Supply Chain Mentoring Program, to identify key challenges with clients supply chain and export markets. Regional Customs Training, which aims to provide practical training on the basic principle and requirements of customs, tariffs and non-EU trade. A Dublin Custom Training trains Clients in all aspects of customs and tariffs management. A Currency Risk Training prepares for buyer negotiations and new business arising from non-Eurozone market opportunities. Supply Chai Workshops are offered too.

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Revenue Revenue offers helpful links and Videos on how to deal with the upcoming trade with non-EU Countries, Planning Details and Seminars that prepare and help with Brexit related issues. https://www.revenue.ie/en/customs-traders-and-agents/brexit/index.aspx

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HMRC – Her Majesty’s Revenue and Customs HMRC offers 2 grants to help with business to complete customs declaration in preparing for the Brexit. Training Grant and IT improvements are covered in those grants. https://www.gov.uk/guidance/grants-for-businesses-that-complete-customs-declarations

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NSAI – National Standards Authority of Ireland NSAI offers several factsheets with useful information, downloads from previous Brexit Workshops. https://www.nsai.ie/brexit/

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HSA – Health and Safety Authority HSA offers useful information and downloads for informational Sheets and publications about Brexit. https://www.hsa.ie/eng/Topics/Brexit/

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SBCI – Strategic Banking Corporation of Ireland SBCI in partnership with the Department of Business Enterprise and Innovation (DBEI) offers a Brexit Loan Scheme. The Loan can be used for future working capital requirements, or to fund innovation, change or adaption of the business to mitigate the impact of Brexit. https://sbci.gov.ie/schemes/brexit-loan-scheme

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IBEC – Irish Business and Employers Confederation IBEC offers several very informative Guides on the topic of Brexit, Future of Ireland and the EU and the Technology of Ireland and the EU. Several Reports on Brexit and its Future. http://www.ibec.ie/brexit

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Local Enterprise Office Local Enterprise Office offers a Currency Risk Management Booklet, a Customs Insight Course, the InterTradeIreland Start to Plan Voucher Scheme, the Brexit SME Scorecard Online Tool, A Brexit Loan Scheme, a Brexit Mentor Programme, the Enterprise Europe Network, Trading Online Voucher Schemes, Training and Management Development Courses, Microfinance Loan, Micro Lean, Co-Innovate Programme, Technical Assistance for Micro-Exporters. https://www.localenterprise.ie/Discover-Business-Supports/Brexit-Information

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EU Commission
Information on Brexit
All Information regarding the Brexit on the Website of the European Union Commission.  
https://ec.europa.eu/info/brexit_en

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EU Commission 
Brexit Preparedness
The European Union Commission and its Brexit Preparedness Information Site. All Information regarding Brexit and regarding the EU Commission.  
https://ec.europa.eu/info/brexit/brexit-preparedness_en

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Contact Us ([email protected]) or the agencies above to get support for your Strategic Sourcing Brexit risk

Review my Procurement Team

The main questions Arvo encounter when we meet potential customers are:

  • EFFECTIVENESS IN OUTCOME: What does good look like? Are we effective? What are the best practices and where can we improve? What would the benefits be if we invest in these improvements? What are the risks if we do not invest? How do we compare to similar Procurement Teams?
  • EFFICIENCY IN PROCESS: Are we efficient in everything we do? Can we work smarter, faster, better, cheaper? Where can we become leaner?
  • SKILLED FOR IMPACT: Do we have the right skill-set for the growth of our business? Do my team require new learning and development opportunities?

Other customers also ask more direct questions for support:

  • I might have the expertise but I do not have the time. I might have the time but I do not have the expertise.
  • I just need help to get better costs, quality, service, flexibility, innovation, but I do not know where to start.
  • There is too much happening, what is my priority?
  • I know my team is working hard but I do not know if they are working smart. Can I measure the improvements when we invest in them?

Ultimately, these questions always come back to the 5 key pillars that support sustainable growth: trusted people, efficient process, procurement strategy, fit for purpose use of technology, empowering knowledge.

Within Arvo’s Procurement Reviews, we benchmark the People, Process, Knowledge, Technology and Culture. We have answered the above questions for many clients.

WHY ARVO?

We spend time with our customers to understand their business and specific challenges and where they want to be in 3 to 5 years’ time. We measure where they are now and then we design the procurement roadmap they need to reach to their destination. Over the last 5 years, we have supported the development and structure of award winning procurement functions, with many references available here.

We are proud to collaborate with our customers, to engage and empower their resources, to be part of their procurement strategy design and to enable their sustainable growth by doing things right and doing the right things.

We would very much welcome the opportunity to discuss your Procurement Objectives further so feel free to contact for a quick initial discussion.

While the outcome of the process assessment will be a customised efficiency roadmap where targets can be tracked against the improvement of the procurement team’s engagement across the business, for example:

 

Arvo Procurement Dashboard image

 

Contact Us Today to discuss your Procurement Team’s Improvement Plans

Past, Present and Future

Arvo Cost Management Energy audits consultancy tactical procurement

Recently the wonderful team at IGNITE in UCC, produced this fantastic infographic documenting the Arvo story from humble supply.ie beginnings to the current range of sourcing, consultancy and training offerings under the Arvo umbrella. Our focus for the past 10 years to “help companies to save time, money and hassle” has not changed but our solutions to address your evolving market needs, have matured with our growth.

In the beginning, our eSourcing platform (supply.ie), was used by over 5,000 Irish businesses to source 3 quotes quickly for goods and services. The success of this simple tendering solution led to an appointment in 2012 to the European Commission e-Tendering Expert Group, which has advised EU Government’s with regards eProcurement. At home, saving SME’s money on Print & Stationery soon led to a demand to reduce costs in other areas, such as Utilities, whereby our Smart Energy Services helped businesses to correct MICs/Tariffs, Group Buy to leverage scale and deliver instant cost savings, while proactive businesses then invest the savings in Energy Efficient Equipment.

Presently, the Arvo business is delivering value for a range of Procurement Stakeholders with;

1. Our Brexit Sourcing Services helping businesses prepare for the imminent supply chain threats posed by Britain’s exit from the EU, especially if a “no deal” or hard-Brexit transpires

2. Our Tendering Services help both buyers and suppliers, by supporting buyers through every stage of the Strategic Sourcing event, while assisting suppliers prepare, identify, qualify and respond professionally to appropriate bid opportunities

3. While our Strategic Procurement Services and Tactical Procurement Supports help both public and private-sector clients, with their strategic focus to deliver long-term value and impact, while our Tactical Procurement expertise supports the day-to- day operational aspects of sourcing and procurement.

While predicting what the future holds is an almost impossible task, but as outlined in this Business & Finance CEO Interview, Arvo’s focus is to grow the Procurement Transformation Institute (PTI), which is a competency centre that provides a gateway to procurement education, thought leadership and training while empowering the buying community. While we will continue to research the merits of creating a decentralised group trading platform with distributed ledger technologies, to enable seamless trading experience for unknown buyers and sellers. Stay tuned for this next (r)evolution…

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