In an effort to create more efficiencies across departments—and, of course, reduce the $60 million spent on the purchase of advertising and media services in New Zealand in 2011—the Government has been on a mission to assemble a panel of trusted advertising soldiers to join its army. And, after a bit of a delay, it's chosen its longlist and asked successful parties for their "best and final offer".
CAANZ chief executive Paul Head says it's been working closely with the Business, Innovation and Employment department since the start of this process and it was involved in the creation of the RFP, which was sent out in October. He says there was a reasonable amount of pressure put on agencies to get their responses in last year, and a decision was expected before Christmas. But the longlist letter was only sent out around two weeks ago. So while he says the process thus far has been "fair and open, what has been disappointing is that the government hasn't met its timings".
Agencies were asked to provide an hourly rate in the first round and were selected based on qualitative factors, such as experience in public sector work or a proven heritage in big brand work leading to behaviourial change. But the longlist letter asks for successful agencies for their best and final offer. So is this bargaining an indication that it doesn’t appreciate the value the industry adds? Head believes "price is not the only or final arbiter" and "they realise the value this industry has in driving social agendas". But the letter does say cost is a major determinant in making it on to the final panel. At least they’re honest, but as evidenced by the Novopay debacle and the problem with a procurement mentality, cheap isn't always good.
While no-one likes being pressured into dropping their pants, some we’ve spoken to said it could have been worse as it's thought the all of government programme to choose legal and recruitment partners involved an online tender and reverse auction that published the fees other providers were willing to pay and drove the price down.
Some senior agency sources were sceptical this new panel would make much difference (it's thought the number of legal providers used went from 60 to 40), with a common belief that this is simply a way for public servants to say ‘before we started this process the cost of using a creative director was $350, but now it’s $280. Aren’t we clever minister?'
Head wouldn't comment on the reasons for the delay, but a few of the agencies we've spoken to that have made it onto the longlist blamed "general bureaucratic going round in circles" and the fact that "they're making it up as they go along".
One senior agency source says all of the commercial representatives chosen to help select the successful agencies have left the 'centre of expertise' due to the farcical, unorganised nature of the process and the fact that there was very little in the way of criteria to base decisions on after the RFP, so it's thought the final choices will be made solely by government employees. The Ministry of Economic Development's category leader Karla Davidson-Brown has not responded to our call to confirm this and answer a few other questions about the process.
Head says the department has not disclosed which agencies they’re talking to and how big the panel will be, but we’ve heard most of the big agencies have made it through to the next round.
The Department of Internal Affairs named its digital dream team late last year and chose 42 providers and while that seems like a lot, Head says there's a lot of work to be done, with agencies on this panel hoped to be used for all government activity, from departments to local councils to the likes of NZ Lotteries (while Head believes NZ Lotteries could choose an agency that isn't on the panel, it would need to provide some pretty compelling reasons to the bean counters, which is why it's seen as being so important to make it through).
Here’s the full text of the letter:
Thank you for your response to our All of Government Advertising Services RFP. The Centre of Expertise would like to apologise for the length of time it has taken to communicate, as it took longer than anticipated to complete the initial evaluation round.
In this next stage of the evaluation we will be undertaking a Best and Final Offer (BAFO) process. The BAFO process provides all longlisted respondents with the opportunity to revise their offered ratecard pricing through an updated discount. Please note that competitive pricing is a key determinant in deciding which providers are recommended a place on the final AoG Advertising Services panel.
This updated pricing will be used in the statistical pricing evaluation model, which alongside your pre-assessed qualitative results; will be a key input in the shortlisting process. The final ranking of providers by sub-category will be determined by a Value for Money (VFM) ranking, comprising qualitative results and quantitative results. Once a provider is successful in gaining a place on the final panel, they will be marketed to government agencies on the basis of their Value for Money ranking.
The BAFO process will be your final opportunity to impact your VFM equation in order to cement a place on the panel. The Ministry does not intend to negotiate further subsequent to the BAFO process, however reserves the right to do so. Once the final shortlist is ratified within the Ministry, the CoE will proceed to a contract award recommendation stage. The Ministry intends to have the AoG Advertising Services panel in place in Quarter 1 2013.
The enclosed template for the BAFO lists your longlisted rates. The template includes fields for update of the price for each longlisted rate or margin.
We expect to be able to update you further on the RFP outcome and process within the next 4 – 6 weeks.