Tenders3 Aug 2020 11:08
I am involved in tendering (for management training contracts) and we deal with Government Authorities as well as the private sector so I thought an understanding of how the process works would be useful for Nova shareholders (and I know I will be teaching some people to suck eggs, so this is for those that have no knowledge in this area).
Any public expenditure on goods and services is very transparent and a tender process is required for anything over a threshold. In our world that is £75K so its not a lot. All tender opportunities have to be advertised (at the moment throughout Europe as we are still under the transitional arrangements) and are therefore open to anyone to apply.
A common procedure is to first apply for an ITT (Invitation to Tender). This is a sort of weeding out process as it contains a number of pass or fail criteria. It is used typically to whittle down applicants to manageable numbers by excluding those who are fairly obviously not suitable suppliers. The criteria can include financial situation, suitable insurance, capacity or industry accreditation such as CE marks, ISO 9000 etc.
If you receive an ITT, then you complete the tender application in full. This will have a number of sections, typically, track record, case studies, quality, delivery process, price etc.
Each of these sections will have a score (e.g 10 points max for case study experience in similar circumstances or 40 points for price, making up a total number of available marks). Furthermore, each section is weighted when the final scores are calculated. As an example the cheapest priced tender will have their scores in this area rated at 100% and everyone else will be scaled back appropriately. This can mean that the tender outcome can be biased towards quality and track record or heavily in favour of the cheapest price.
After the tender is awarded, there is a statutory period of time (10 days usually) for unsuccessful tenderer's to call foul if they believe something inappropriate has taken place.
The point of all of this is that Novacyt may actually have decided not to tender for this. If for example price was weighted to 60% of the available scores for the tender and they know that even if they score maximum marks everywhere else they will not get it (because someone else is going to go in at peanuts), then it is a sensible management decision to not even bother as the work required on a no-hope tender will distract from effort going into something they have a good chance of winning (and being profitable to boot).
So my conclusion is that this is in no way a set-back. It's relatively low numbers compared to our production capacity and there are better opportunities out there (world-wide).
Hope this helps.
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