By Ace Advice
Purchasing decisions can be difficult, especially when you’re buying a service where no two suppliers are the same, like catering or cleaning. But do government-approved frameworks really make it easier?
Frameworks allow a pre-selected group of organisations to bid for a contract, enabling them to complete a compliant procurement process in a low-impact way. They’re usually owned by public sector organisations, and are promoted as ‘free’ to the buyers. When procuring using the MEAT principles, it’s a compelling starting point. But frameworks generate their funding through fees levied from organisations that are awarded contracts which originate from their framework.
These fees, usually calculated as a percentage of the agreement’s annual turnover, are recovered from the initial customer over the life of the contract. As all bidders include the same percentage levy in their submissions, every price submitted rises on the tide of the bidder’s levy. In other words, there’s no such thing as a free framework.
To help you gain a better understanding, and decide which approach is right for you, we’ve outlined the key things to consider when procuring a high-value service.
How big is the contract?
If your tender’s lifetime value is relatively small, a framework service is more cost effective than engaging a specialist consultant to manage the process.
For example, if a primary school takes out a small cleaning contract with an annual turnover of £50,000, a 0.75% framework charge over a five-year agreement is around £1,875 – much less than consultancy fees. However, a cleaning contract for a MAT, with an annual turnover of £1,000,000 over five years, increases the cost by £37,500 – making the likely consultancy fees, by comparison, excellent value for money.
Would you require a personalised service?
When purchasing a framework service, the contractual documentation and schedules are based upon a template, and rarely personalised. As a result, the completed agreement is a fixed solution which isn’t tailored to your schools’ needs.
It is possible to retrofit your requirements into the contract, but the price is likely to change. What’s more, tailoring the documentation is a demanding task, and although you can engage an expert consultant’s help, this means another set of fees.
Do you have the time and resources?
Your school business manager has many responsibilities. Procuring complex services like catering or cleaning, and personalising the contract if required, can really eat into their time and resources.
With a framework approach, their input will be needed throughout the duration of the contract, whereas a consultancy can really take the weight off their shoulders.
Do you have a supplier in mind?
Frameworks select their suppliers by regional or national coverage. These suppliers qualify for the framework every five years or so, and there’s a limit on the number in each region. Usually, only the larger suppliers are considered, which means any new entrants into the market, or smaller providers that may be a better cultural fit for your school, are excluded.
By publicly advertising opportunities, you can engage the entire market, and may reach a better range of suppliers than a prequalified selection made by a ‘boilerplate’ tender process.
Need support? ACE Advice can help
If your school is buying at scale, engaging a specialist consultancy can prove invaluable. At ACE Advice, we work with you to navigate the complexities of public sector procurement, while tailoring the service to meet your schools’ needs.
To find out more about how we can support you, visit our website, or speak to our friendly team on 07833 265675.