Introduction to collaborative procurement
In an economic climate of reduced budgets and rising overheads, collaborative working is seen by many as a way of achieving a high-quality education for young people within schools, whilst delivering increased efficiencies and savings.
What is Collaborative Procurement?
In essence, it is where two or more schools, which can be the same or different status, i.e. maintained, foundation, academies, work together to jointly purchase goods or services from third-party suppliers with the aims of achieving economies of scale and more favourable commercial terms from suppliers. Other benefits include:
- improving the quality of education for young people in participating schools;
- raise standards of achievement by focusing on the core business of learning and teaching;
- providing opportunities for economies of scale through commissioning of services and purchasing of resources;
- sharing expertise, best practice and resources to ensure best value for money
- strengthening curriculum links to support the ongoing improvement of curriculum delivery and high standards;
- exploiting fully opportunities for collaborative Continuing Professional Development to enable effective sharing of best practice and value for money;
- sharing best practice between governing bodies to support most effective governance;
- identifying needs and best practice through the confidential sharing of data and information;
- developing highly effective leadership at all levels and pushing strategic capacity;
The Department of Education has produced a very good guidance note on collaborative procurement (click here if reading online for the DfE guidance which provides an overview of the various forms of collaboration and how to achieve it.
Forms of Collaboration
The models of delivering collaborative procurement are varied from setting up a separate legal vehicle, to a contractual collaboration which may be supported by a simple memorandum of understanding recording the aims and objectives of the collaboration and the protocol for decision making.
The participating schools may determine that they wish to appoint a joint committee who will have some devolved powers to agree budgets costings etc. and effectively oversee the project management of the procurement project. This will mean that the governing bodies of the participating schools will need to approve this arrangement and the delegating of some powers and function to a joint committee.
Tops Tips for a Successful Collaboration Project
- Understand the aims and objectives- and explain them in a simple business case and ensure that the SMT and the governors are on board with the business case
- Understand the benchmarking process that you are going to use to ensure best value- set up a range of scenarios to compare and contrast- model the savings to be achieved by working collaboratively
- Be clear in your requirements– understand the need that you have, e.g. catering services- if you currently buy these services, what works with your current supplier, what elements of the service can be improved, where can efficiencies be made?
- Create a clear, comprehensive specification of your requirements– this can be used in the tender documentation and the resulting contract- it will assist in achieving value for money
- Understand the procurement route you need to follow.
Quick Guide to Procurement Routes
As schools are “contracting authorities” for the purpose of the Public Contracts Regulations 2006 (these are soon to be replaced with the Public Contracts Regulations 2015), you will need to work within the regulatory requirements.
The first thing to establish is if the proposed contract is covered by the Regulations. If you are purchasing goods, services, or works (construction type contracts) the Regulations are likely to apply.
Once you have identified what type of contract it is, you need to review the total price, to see if the proposed contract is under or over the current EC procurement thresholds.
What are the current EC procurement thresholds?
The thresholds are generally updated once every two years.
From 1 January 2014 the UK thresholds under the Public Contracts Regulations 2006 are:
Supply/Service contracts awarded by central government- £111,676
Supply/Service contracts awarded by other contracting authorities – £172,514
Works contracts – £4,322,012
From 1 January 2014 the UK thresholds under the Utilities Contracts Regulations 2006 and the Defence and Security Public Contracts Regulations 2006 are:
Supplies and Services contracts -£345,028
Works contracts – £4,322,012
From 1 January 2014 the thresholds for small lots are as follows:
Supplies and services – £66,672
Works – £833,400
Q: Do the EC procurement thresholds include any applicable VAT?
A: No. The EC procurement thresholds relate to the value of the supply or service net of VAT.
Q: We do not know how much the contract value is – can we assume it will be under threshold?
A: You should use your best estimate of the contract value, taking into account all known factors at the time. If in doubt, you should advertise the requirement and follow an appropriate contract award procedure.
Q: The contract includes a couple of optional elements. Should those be included in the threshold calculation?
A: Yes, if it is likely that they will be taken up during the contract term, as this is the estimated contract value over the entire contract term.
Q: How can I procure the Goods, Services or Works?
A: Once you are aware that your contract is likely to be covered by the Public Contracts Regulations there are a number of options available to you.
- You could consider using a pre-existing public sector framework arrangement which contains pre-approved suppliers who have been through a qualifying procurement process and have been vetted in terms of quality of provision, technical capability, continuity of trading and you do not have to submit an OJEU notice as this has already been done in the setting up of the framework arrangement.
- You can decide to run your own procurement and not use the pre-existing frameworks or deals, which will, depending on the value of the contract and the type of service being procured, need to be compliant with The Public Contract Regulations.
- You will need to design your process, looking at the evaluation and selection criteria, having a comprehensive understanding of your requirements, and then advertise for competition
- Once you receive submissions of interest you will need to evaluate the responses, suppliers must demonstrate their experience, capacity, and track record to provide the goods or services. The suppliers should set out how they will provide the goods/and or services required and how they will achieve any service levels that you have identified as being part of the solution required.
- You will have to award the contract on the basis of the award criteria that you decide upon- and record accurately your decision making process. You will need to note the reason that you reject certain suppliers.