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The benefits of competitive procurement

15 April 2016

School business manager blog...

For many, school and academy finances remain incredibly tight and therefore there remains a constant pressure to find savings and efficiencies. The excessive workload and time pressure faced by many business managers mean that the opportunity to achieve savings from competitive procurement can often be overlooked, but the time investment is certainly beneficial due to the discounts on offer. These price reductions can be increased still further for those fortunate to have the opportunity to procure as a group, with large savings available through the economies of scale afforded to multi-academy trusts (MAT).

To emphasise the advantages of competitive procurement I have detailed some of the recent processes I have tendered for my MAT (five schools, made up of one secondary and four primary schools) and the level of annual saving achieved. It should also be noted that in many cases, not only have I achieved a better price, but the level of service on offer is also significantly greater.

Audit and accountancy services 23% saving; Catering services 64% saving; photocopying and print services 26% saving; and ICT support 83% saving.

What do you wish to achieve?

The starting point of any process should be establishing exactly what you wish to achieve. Setting out a clear specification will ensure that competing organisations will strive to meet your wishes and avoid the need for negotiation after the contract has been awarded. It is at this early stage that you should set out your expectations for the contract. Do not be afraid to demand more than you currently receive. Clearly setting out your aims will also ensure a fair process and should avoid complaints and challenges after the contract is awarded.

Compliance

When completing any tender process it is vitally important that you check whether the whole life value of the contract (including any extensions) requires the process to be advertised via OJEU, the Official Journal of the European Union. This is the online publication, in which all tenders from the public sector which are valued above a certain financial threshold must be published. The current thresholds, which apply from 1 January 2016, are:

Supply and Services contracts: £164,176

Works contracts: £4,104,394

Services falling within the ‘Light Touch’ regime (inc. school catering for example): £589,148

If you are awarding a contract with a whole life value which is over the relevant thresholds, as well as advertising the contract opportunity in the OJEU, you must also follow one of the specific processes for procuring contracts which are set out in the Public Contracts Regulations 2015. There are also requirements to have a standstill period, publish certain other information, keep records and include particular conditions in your contracts. You may need to take specific legal advice on running procurements in accordance with the Public Contracts Regulations 2015.

Alternatively, you can use a framework agreement procured by another contracting authority to call-off a contract, irrespective of its value.  You will need to check that the framework agreement was procured in accordance with the relevant procurement rules in force at the time, and that you are entitled to use it.

Time scales

It is crucial that you allow adequate time to complete your process. Depending on the size, value and complexity of the contract you may wish to allow opportunity for clarification and even to host a site meeting for interested parties to view the school(s). For service contracts, which may involve the TUPE of staff you should ensure that a reasonable time period is allowed for the transferring of staff to the new provider (at least six weeks). A clear concise timeline is beneficial to all parties and helps to ensure a smooth process.

Feedback

During the decision making stage, it is prudent to ensure you have a fair and transparent method for choosing your supplier. A scoring matrix, will not only assist you in ensuring a fair process, it will also help you to feed back to all organisations involved in the process. It certainly helps those difficult conversations if you can point to hard facts and figures.

Help and support

Procurement, particularly on a large scale can be quite daunting, but there is help and support available. The Department for Education have produced some advice and guidance for schools and academies and your legal representatives, who should have a procurement expert as the Browne Jacobson team does, will be able to advise and guide you on some of the more technical areas.

There are however, other support providers, who have vast experience in the sector and are available to support schools and academies through the procurement process. For some of the larger services, particularly catering and cleaning, you may wish to work with organisations such as the Crescent Purchasing Consortium (CPC). The CPC have frameworks in place for education establishments which are already EU approved and are free for their members (it is free to join) to use. These framework agreements include templates, which are particularly beneficial for those with little or no procurement experience, and a list of pre-approved suppliers, who CPC have already vetted. 

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