Frameworks - a route to sensible procurement

We are still in the midst of the Transformational Government Strategy launched by the previous Prime Minister. For public sector organisations the continued pressure to reform means that they must become increasingly flexible and able to adapt to policy changes and the impact this has on the business of service delivery. Beyond the strategic thinking that underpins the Transformational Government Strategy, civil servants must begin to face the complexities of creating joined-up government and making it a reality. Departments and agencies must accept the need for dramatic change if they are to succeed in delivering citizen-centric services and efficiency savings.
Developing an infrastructure that is capable of delivering the objectives of the transformational government agenda, and meeting the Service Transformation Agreements that accompanied the Comprehensive Spending Review in October last year, is a high priority. To do this successfully, procurement professionals and project managers must be confident that they can procure and implement the right solutions whilst ensuring that the taxpayer gets value for money.
New ways of working
However, procuring solutions to enable new ways of working and improve service delivery is by no means an easy task. It is one that poses exceptional challenges to any organisation seeking to reposition itself to meet changing demands – challenges that are compounded by the convergence of technologies and rapidly changing industry. The dynamic nature of technology and IT-enabled business solutions means that it is increasingly difficult for purchasers to anticipate the specifications they require.
In order to achieve this, IT procurement needs to be a key element of the overall IT strategy, and public sector organisations should seek new opportunities of improving procurement practices and procedures.
Framework agreements are one way of dealing with these challenges. Used effectively, they have the potential to help public sector organisations meet business needs whilst reducing the time and cost of procurements. A report from the National Audit Office on value for money in the public sector stated that: “ has estimated that its consultancy framework agreements generated savings of £111 million in 2005/06 (based on the £740 million that was spent through these agreements across the public sector).”

What is a framework agreement?
A framework agreement is a contractual vehicle that allows purchasers to order goods or services under the terms and conditions specified in that framework agreement. Suppliers are usually selected on the basis of how economically advantageous their tenders are (taking into account price, quality, capacity and track record). The benefits of using a framework agreement include:

  • the opportunity to obtain best value for money (by reducing the duplication of effort), whilst reducing procurement cycles and associated costs
  • pre-agreed Ts & Cs that follow best practice
  • compliance with current procurement guidelines and relevant legislation.

Suppliers benefit from being on a framework agreement as it reduces their tendering costs, particularly through reducing the procurement timescales, which frees up resources. These benefits can be passed on to customers through reduced prices.
There are currently a variety of framework agreements open to procurers and it is important to select the one that is most suited to your needs. One example is Catalist: a suite of framework agreements, pre-competed supplier lists that are EU compliant – covering goods, services, consultancy, solutions and resourcing - and available for use by the public sector. Catalist is appropriate for purchases of all sizes, including those above the OJEU threshold, and users can place a catalogue order with a single supplier or ask those suppliers on the framework to bid. Customers choose the framework and lot that best suits their requirements. In order to use Catalist effectively it is important to be sure that you know exactly what it is that you want to do and achieve.

Choosing the right supplier
It is important to talk to suppliers, especially if you are planning to buy services (rather than commodities), but bear in mind that suppliers will not bid for everything – they go through an internal process to decide whether they are well qualified and have the available resources. Suppliers that decide to bid will usually give customers feedback on their reasons for this.
When preparing your requirements and requesting information from suppliers it is important to explain what you want to do and the capability you are looking for. You should include sufficient flexibility to cater for extensions. When consulting suppliers at the Invitation to Quote (ITQ) stage you should check that they are able to meet your requirement within the timeframe and include additional/alternative clauses and/or special terms to ask whether they are able to meet your requirement within the timeframe. You should also tell suppliers how you would apply the evaluation criteria set out in the guidance notes.
When you are ready to order and have selected the supplier you should complete the model order form, using appropriate input from the supplier. The form will prompt you to provide relevant information about schedules, but it is important that you do not introduce additional/alternative clauses or special terms at this stage. Suppliers will send a completed contract or statement of acceptance. We recommend that you give feedback to unsuccessful suppliers wherever possible to allow these to amend any future bids, thus benefiting all parties involved.
Further information about using Catalist can be found in the Catalist User Guide that Intellect, the trade association for the UK technology industry, has developed in conjunction with and a selection of users from government departments and agencies.  The guide, which focuses on ICT and consultancy, is designed to enable potential public sector users, particularly those with no or little experience of Catalist framework agreements, to reduce the time and cost of procurement and to ensure they choose the most appropriate supplier. The online, interactive guide includes links to a glossary and to useful websites.
Finally, while framework agreements promote a collaborative approach and are an essential tool in IT procurement, they are not necessarily as simple as they first look. Selecting preferred partners and the right contractual agreement is only the beginning of the process.  Learning to get the most out of your partnerships requires a whole new skill set.
–Intellect is the trade association for the UK technology industry. It represents around 800 companies ranging from SMEs to multinationals. Intellect runs a vibrant public sector programme involving over 500 member companies.

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