Selecting a Competent Visa Outsourcing Provider

In my previous article, I dwelled on solutions to limit the risk of litigation during a tender process. However, limiting suppliers through selection criteria is only likely to go so far, and incompetent suppliers could still qualify for the tender. There are, however, other relatively straightforward steps which governments can take to ensure only competent suppliers are selected through the tender process:

  1. Qualification criteria
    • Turnover: setting a sufficiently high minimum turnover (directly related to visa outsourcing) requirement to ensure that companies which do not have the capability to set up a network of Visa Application Centres, are not able to bid.
    • Experience: ensure that all bidders have relevant and sufficient experience. For example, some Schengen client governments demand that bidders have operated three or four Schengen visa contracts for at least three years. This seems like a sensible approach and again ensures only suitable companies can apply. Independent corroboration would be required – such as written confirmation from current client governments of each of the bidders.
  2. Technical evaluation: this can often be the most difficult part of the tender process. It seems sensible for client governments to clearly set out the areas where they wish companies to explain their experience, technical offering, and clearly allocated marks for each section. The sections might cover:
    • Number of existing visa application centres (VACs) – independent corroboration required to confirm bidders’ claims
    • Size of VACs offered, number of counters, VAC look and feel
    • VAC working processes to be used – efficiency and data protection, opening hours and days of operation
  3. Financial evaluation: this is a key evaluation criterion to ensure that the bidder selected provides a high-quality service at a reasonable price, and to ensure no company looks to manipulate the tender process by bidding at an unsustainably low level. To avoid this, the following measures can be considered:
    • Minimum Price Level: by setting out a minimum price you can ensure value for money and exclude unrealistic bids. For a typical contract this could be in the region of EUR20.
    • Weightage: proposed fees should be accorded a relatively low weightage in the overall scoring evaluation. Many governments now are considering a weightage of 10% or even lower to ensure the right value/quality ratio is achieved.

Ideally, a combination of a minimum price threshold and a low-price weightage should be included.

It is very important that client governments properly assess the statements of service providers to ensure for example that their turnover levels, service record and VAC network are indeed as they claim in their proposals. Companies can often exaggerate the number of contracts they hold with client governments and the number of centres they operate from. And turnover figures can often relate to wider business interests of the company, rather than be directly related to their visa service operations.

Protecting a Tender Process from Litigation

At the time I was head of the French central visa department, every time we would engage in a tender to select a visa outsourcing company, I was concerned about the possibility of litigation from unsuccessful bidders. It was also a time when the Schengen visa code had not been officially published and I must confess we were resorting to outsourcing without any legal basis, which doubled the risks.

Fortunately for me, I never had to face such issue. However, my successor had to for the Tunis tender. We had come to the conclusion that litigations would be mainly introduced by small unreliable companies without any chance of been awarded any visa outsourcing contract. And that is what happened for Tunis. Since then, I have been wondering how to minimize the disruption and delays to performance of a contract caused by tactical litigation following a contract award.

Mathematically speaking, if you limit the number of bidders, you also limit the risk of litigation. But, how to go about that? How to find the right balance between keeping out unreliable companies without been accused of attempting to limit competition?

From the information I managed to gather, two kinds of approach have been followed:

  • The restricted tender procedure (by the Governments of Slovenia and the Czech Republic)
  • And the use of restriction criteria (by the Austrian, German, Netherlands and UK Governments

Use of restricted tender procedure: where the contracted services qualify for a competitive procedure with negotiation or a competitive dialogue, the number of candidates may be limited to three. In principle, only candidates invited to bid (including any would-be bidders who successfully challenged the contracting authority’s decision to exclude them from bidding) would have a legal standing to challenge the contract award decision.

Use of selection criteria (to limit participation to suitable bidders that have the necessary financial and economic standing, as well as the required technical and professional qualities). This can be a two-step tender process, the first step (RFI) to select suitably qualified companies, and the second step (RFP) inviting those qualified bidders to submit final proposals. It is important to note:

  • contracting authorities are, in principle, free to set the selection criteria provided that the criteria are not discriminatory, and relate to and are proportionate to the subject matter of the contract;
  • would-be bidders would first need to successfully challenge the legality of the selection criteria, or the legality of the decision to exclude them on the basis they do not meet the selection criteria, before they can challenge the contract award decision. This can be helpful in reducing the risk of a delay at the end of the bid process.

Limiting suppliers through selection criteria and therefore limiting the risk of litigation is only a first step. Incompetent suppliers could still qualify for the tender. In a following article, I’ll examine relatively straightforward steps that governments can take to ensure only competent suppliers are selected through the tender process.

Still misunderstanding on visa outsourcing by Schengen Member States

I recently heard comments on visa outsourcing by Schengen countries, which show that it is still a source of misunderstanding after more than 8 years of implementation by most if not all Schengen Member States.

Visa outsourcing does not consist in giving to a private company a decision-making authority for issuing visa, as I sometimes hear. The competence to issue or to refuse a visa remains with the official services, which usually delegate this power to the Consuls. The external service providers have no power and have no influence whatsoever on the consular decision.

The role of the external service providers thus is limited to a list of tasks, qualified as accessories. The extent of these tasks depends on the terms of the contracts passed with the Governments, which must comply with Annex X of the Visa Code.

Visa outsourcing was first introduced in the European legislation by regulation (EC) n° 390/2009 amending the Common Consular Instructions on visas which entered into force in May 2009. It was then integrated into the Visa Code (Regulation 810/2009 of 13 July 2009).

It was the result of a hard fought compromise between the European Commission, the European Parliament and the Schengen Member States.

Visa outsourcing started in India when diplomatic and consular missions became aware of the difficulties to handle an increasing number of visa applicants for tourism in their countries. It is in these circumstances that VFS was created. Outsourcing has considerably developed since: almost all Schengen Member States now resort to outsourcing, as many other non-Schengen countries: the United Kingdom, which was a pioneer, Ireland, the United States, Canada, India, Saudi Arabia, Australia, New Zealand, South Africa, etc.

Like many other countries, Schengen Member States are facing a global increase of visa applications, in particular in emerging countries, which require additional resources.

In addition, biometrics makes the personal appearance of applicants compulsory, whereas before the introduction of fingerprinting, it was the travel agencies that served as intermediaries. Additional counters must be opened, staffed and equipped for biometric data collection. Besides, compulsory personal appearance generated a high demand for local services, close to where applicants reside.

Finally, Consulates are more and more exposed to security threats. More applicants entering the Consular premises would increase risks.

These constraints generate new costs: for more staff, for larger premises, for refurbishment, for security. Yet, many Governments face at the same time increasing budgetary constraints.

So, Consulates are squeezed between increasing needs and shrinking resources.

Outsourcing provides the solution for Governments as it transfers the cost of labour intensive repetitive tasks not interfering with the decision process to external service providers. At the same time, it improves the conditions of visa submission by applicants, as they are received in appropriate premises adequately staffed.