Welcome back! I am sure that you, like me, wonder where the summer has disappeared to. We seem to be back again before we know it! The start of a new academic year is a good time to make a fresh start and perhaps introduce some changes to the way things are done. One area you’ll need to consider is your procurement and it’s an excellent time to be on the front foot right from the get-go. Here are Minerva we thought it would be helpful to give you our ‘5 Top Tips’ to make sure you get the best results from your procurement activities.
Something we see all the time at Minerva is schools paying penal rates for their services. This is usually due to the fact that they haven’t made a note of the contract renewal. This results in:
Naturally you don’t want either of these things to happen so I would recommend you have a contracts register to keep a note of upcoming renewal dates. It doesn’t have to be anything fancy – an excel spreadsheet or a diary entry on Outlook will do the job.
As a good friend of mine in the forces has said “Time spent in reconnaissance is seldom wasted” and a day spent up front ensuring you have a note of these dates will ensure you don’t miss anything important.
Extra tip – don’t forget to make a note of the termination or notice period required. These can range from 30 days through to 6 months or more.
Done well, procurement is not necessarily a quick activity and even more so the higher the value of the contract. As a minimum you should be looking to get three competitive quotes. You should also allow time for some final negotiations, ample allowance to read the contract Terms and Conditions as well as a period of time for implementation of the new contract. In our experience, even for straightforward, medium value contracts you should allow around 8-12 weeks for the contract renewal. If the total contract value across the whole term exceeds the OJEU threshold (£164,176 until the end of 2017) then you must follow strict European Union Procurement Directives which are enforced in the UK via the Public Contract Regulations 2015. The OJEU process has extremely strict timescales which must be adhered to for your procurement to be compliant and so you should be allowing at least 3 months to run such a process.
Extra tip – if the contract renewal involves labour, such as cleaning or catering, you should also allow a minimum of 30 days for TUPE consultations in case your incumbent supplier does not successfully retain the contract.
If you don’t follow the regulations for purchases above the EU threshold, suppliers may be able to challenge your spending decisions and contracts on the grounds that you’ve treated them unfairly. A recent legal case (Lightways (Contractors) Ltd vs. Inverclyde Council) shows that a UK Court will be prepared to intervene and declare a contract ineffective where the appropriate rules have not been correctly complied with. This case is the first time that this remedy has been applied by a UK Court. A declaration of ineffectiveness can have very serious consequences as the contract will be unenforceable and the contracting authority (your school) will incur costs and delays in running a new procurement (as well, of course, as the costs of any challenge).
Extra tip - you must not split your requirements into smaller orders to avoid advertising your contract in the OJEU. So, particularly if you are a Multi Academy Trust, if the contract is for multiple sites and will be in the name of the Trust you must treat the total contract value as being for the requirements across all sites.
One way of driving better results from your procurement activities is to set yourself a target for reducing your costs. Not all of your contracts will renew in this academic year and so you need to assess which ones do and, importantly, which ones you feel you can realistically reduce in cost. It would be hard, for example, to do this in a spend category where the vast majority of the cost is labour. With National Living Wage and pension contributions all rising it’s hard to make any savings of note. For the remaining spend categories, if you set yourself a goal of reducing costs by, say, 10% it’s amazing how it focuses the mind! Knowing that is your aim means you’ll probably give one more ‘push’ in a negotiation with a supplier that might make a real difference.
Extra tip -make yourself publicly accountable for your target. Knowing that other people are aware of your aim gives you extra impetus to achieve it!
There are loads of sources of support for your procurement so don’t be afraid to seek it out. Most is free! There’s no need to reinvent the wheel, don’t forget that many of your colleagues in other schools have probably “been there, done it, bought the t-shirt”. I’m also aware that the Business Manager community is really supportive of one another so someone may very well be prepared to share their documentation as well as knowledge and experience.
Alongside colleagues there are loads of organisations which have procurement advice; NASBM, The School Bus, Crown Commercial Services and the Chartered Institute of Purchasing and Supply to name but a few.
Finally, as I’m sure you’d expect from an article written by a procurement consultancy we’d also recommend the use of external support. Organisations such as our own run tenders all day every day (what an exciting life we lead!) and are always happy to impart advice. We have lots of free resources on our website too so do pop and have a look.
Extra tip - if you’re interested in more formal procurement support then do complete the contact form on the website and we’d be delighted to get in touch.
Lorraine Ashover, Director, Minerva Procurement Consultancy Services Limited
This blogpost was written as a guest article for the saaf