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procurement and academies - great power or great responsibility?

30 March 2012

While becoming an academy will not allow the head teacher or business manager to scale tall buildings, it will give more control over the choice and management of contracts.

What may not have been apparent prior to conversion is the complex procedures that sometimes have to be followed when procuring new contracts. Welcome to the world of procurement! An academy must ensure that, as a publicly funded organisation, it is following procedures that have been put in place to avoid a lack of transparency in the contract award process. The main rules that are applicable are the Public Contracts Regulations 2006 which bring the EU procurement regime into UK law. The Regulations set out when and how a contract must be procured.

If the Regulations are ignored or not followed correctly the academy may run the risk of a financial penalty and, in the most serious cases, having the contract unpicked. This is because, if the process is challenged, a court may find that the award or the contract itself is invalid and the process will have to be repeated. It is clear that this will result in a large waste of time and money, not to mention inconvenience.

When

The Regulations stipulate that when the value of a contract for goods, works or services is above a certain threshold then the procuring body must follow the EUs procedures. These thresholds change every 2 years and currently are:

  • Works - £4,348,350
  • Goods and services - £173,934 (for services this is the lifetime of the contract and if not known it is estimated as 48 months)

However, currently certain types of services are exempt from the full scope of the Regulations. These are known as "part B services" and relate to services such as legal services, educational services and health and social care services. It will always be worth checking whether the contract that you want to enter into comes within an exemption as it will make the process considerably simpler but may not relieve you of obligations under the Regulations altogether.

How

What the academy wishes to procure will dictate the exact procedure to be followed. Depending on the procedure followed the academy will have to prepare documents for different stages of the process and on some occasions enter into dialogue with bidders to work out the finer points of the contract. Specific protocols will have to be followed before the contract can be entered into.

Pitfalls

There are certain risks that an academy can be alive to to reduce the risks of a challenge to the process or of undue delay.

Firstly, know what you want and why. Even the largest government organisations sometimes fail to set out clearly the objectives they wish to achieve. It may be that a current contract is coming to an end and they want to renew it for the same services or a new service, goods or works are required. Either way the academy will want to get the best price possible while ensuring a high quality of delivery.

Secondly, make sure that you use the right documents and complete them properly. To begin a procurement a notice must be published in the Official Journal of the EU (OJEU) and the information will be disseminated to potential bidders Europe-wide. The information in this notice will be the basis on which all later documentation is drafted and against which evaluations should be made.

Understand the timescales that the different procedures must adhere to and how these can be shortened in certain circumstances. It is always best to give a few extra days in your timetable to allow for unforeseen complications and remember that the timescales are only indicative and no-one can challenge simply because the next stage is started a week late.

Evaluating bids isnt always easy and it is an area where many challenges are made. To make it as water tight as possible the questions and the criteria need to be clearly worded and the bidders must be able to see what they will be evaluated against.

TUPE is something that will often rear its head when procuring a new services contract as there may well be existing staff either of the academy or the current provider who as a matter of law will transfer under the new contract. Anticipating and collating the correct information early and managing the process following the award of contract is really important and extremely useful. If everything is left until after the contract is awarded there may be long delays while the new and old providers arrange staffing transfers and deal with pensions. If the existing service provider is a local authority then pensions can become complicated due to the protection for public sector workers.

Making life a little bit easier

There are ways in which the procurement of contracts can be managed to reduce the effort that needs to be put in. The first of these is seeing if there is an existing framework that the academy can use. For example, the Government Procurement Service has a range of agreements that can be used by all public bodies. Using a framework agreement means that one or more companies have already been shortlisted to provide specific types of works, good or services and the academy can "call-off" the provider it thinks is most appropriate. This drastically reduces the time and costs of the procurement process.

For academies that are part of a multi-academy trust or in an area with a number of other academies it will be worth looking at procuring certain types of contract for the whole group. While this wouldnt necessarily make the process easier or quicker to begin with it is very likely to reap rewards cost-wise in the long term as providers will give better prices for bulk buying. We would strongly advise one academy or the management of a multi-academy trust taking the lead on this exercise to ensure a co-ordinated and efficient approach.

Remember, remember

Setting realistic deadlines and giving plenty of time for drafting the documents and taking advice from relevant professionals or other staff is crucial. The preparation is of the utmost importance and if the process is set up correctly it will allow for a smooth run later on.

This article was first published in Independent Executive

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