What are the differences between PSAA’s proposed scheme for the audits of 2023/24 to 2027/28 and its scheme for 2018/19 to 2022/23?

Set out below are some of the key differences in the proposed approach for the procurement of audit services due to take place in 2022 compared to the 2017 procurement. In particular we have highlighted areas in which we are hopeful that our proposals will be viewed positively by suppliers.

Feedback on the proposed approach will be sought from all eligible bodies and current and prospective suppliers during June 2022.

  1. We have expressed a clear preference to enter into new long term contracts at the earliest opportunity rather than extending current contracts.
  2. We have proposed tender evaluation quality/price weightings of 80:20 (previously 50:50).
  3. Our proposed price test is deliberately rooted in current market prices.
  4. We are proposing to enable the firms to specify geographical areas which they are least able to cover. If in the event they are appointed to audits within those areas they will receive a premium rate.
  5. The proposed DPS is new, takes minimal effort to enter and would enable future mini-procurements and help to mitigate against suppliers being “locked out” of the market for long periods.
  6. We propose that future contract extensions will be subject to mutual agreement rather than at the sole discretion of PSAA.
  7. By proposing a larger number of lots we would provide firms with greater choice and more flexibility to seek a share of the market to match their capacity and risk appetite.
  8. We propose to provide as much clarity and certainty as possible in relation to responsibility for and handling of changes to regulatory requirements so that firms can bid with confidence.
  9. We propose to provide firms with up to date information about the latest position in relation to the audit of each individual body.
  10. We propose to apply a simplified formula in relation to inflation which would apply throughout the contract term.
  11. We are proposing a number of initiatives to enable new suppliers to enter the market, including enabling experienced suppliers to be assisted by new entrants.
  12. We are developing for sharing with the market a risk allocation matrix, designed to help ourselves and suppliers to consider carefully and systematically the key risks which may arise from and/or affect the contracts, so that there is greater clarity about the risks that do/do not need to be priced into bids.
  13. We propose to adjust the enhanced rate card recently implemented following a consultation with interested parties to reflect the changes in scale fees which result from the upcoming procurement. In all probability this would lead to a further increase in the rates at which additional work is priced.