Frameworks have been a useful public procurement tool for many years. As we have commented before, they have both benefits and issues. They can save a contracting authority (CA) time and effort, and enable standard terms and conditions to be put in place. But suppliers rarely offer their very best deals where there is little or no firm volume commitment.
Over the years, the EU has also clamped down on the practice whereby a contracting authority put in place a framework that other public bodies would be allowed to use. The EU said that the CA letting the contract must stipulate to some reasonable level of detail which other bodies could use the contract, rather than just saying “any other public organisation” for instance.
But the system is still open to abuse – or maybe we should say “gaming the system”. This OJEU Notice – Fire Safety Framework Agreement – from last year was pointed out to us recently. It relates to a tender issued by Ilkley Grammar School (close to the famous moor – see picture) in Yorkshire who were setting up a National Framework Agreement for Fire Safety. Strangely enough, pretty much every other public contracting authority in the UK is mentioned in the OJEU advert (see the list at the end of this article, copied from the OJEU ad – that list goes on for another page or so in the ad!)
So what is behind this? Has Ilkley School been asked to lead a huge national collaborative project? No, of course not. The clue is in the detail of the advert. It looks like two private sector firms are involved here, Pagabo (who offer a collaborative buying service via their website here) and Added Value Portal Ltd. Those organisations are private sector so cannot let contracts in their own name. But they can get a tame contracting authority like Ilkley School to front the tender, and then offer the contract to any other public body.
Presumably, Pagabo will charge successful suppliers a fee in some way, and one assumes that there is something in it for the school as well – or maybe AVP just offer to run the procurement exercise free of charge?
So, what’s wrong with this anyway? Isn’t it just introducing some healthy competition to the public sector collaborative organizations? Well, there are a few potential downsides.
– There is no guarantee as to the professionalism of the procurement or contract management process, quality of specifications, treatment of sustainability issues, etc.
– The framework manager is not obliged to seek permission of any part of the public sector to be included in the scope of the agreement (except, one presumes, the contracting authority publishing the OJEU). Those bodies named in this advert probably know nothing about it.
– Having numerous competing framework agreements for the same categories, all open to any UK public authority, undermines and fragments public procurement strategy.
– Suppliers have no real idea how much business they might win – so it is hard for them to price their bids competitively.
– It takes public money out of the system in the form of rebates going into private coffers, apparently without any degree of transparency.
– The contracting authority publishing the OJEU could be left open to legal challenge and damages if the private company breaches public contracts regulations during the process.
It would also be open to very dodgy dealings – not that we suggest AVP or Pagabo are doing this here. But suppose a supplier is struggling to find a route to market, or just lost its place on a Crown Commercial Services framework. They might offer a small contracting authority an incentive in return for the CA running a tender and making sure that the particular supplier got selected. That supplier could then offer themselves around the whole public sector.
We don’t know exactly how the EU can do about this, but it may be worth looking at before other public bodies – and private sector firms – spot the chance to make a bit of money out of this scheme!
“The framework agreement will be open for the use of all UK Public Sector Bodies to include but not limited to;
The Science and Technology Facilities Council, The Medical Research Council, The Engineering and Physical Sciences Research Council, The Economic and Social Research Council, The Natural Environment Research Council,The Arts and Humanities Research Council, The Biotechnology and Biological Sciences Research Council, The UKSBS Ltd, Central Government Departments and their Agencies, Non Departmental Public Bodies, NHS bodies, Local Authorities, Voluntary Sector Charities, and/or other private organisations acting as managing agents or procuring on behalf of these UK bodies.
Central Government Departments, Local Government and Public Corporations that can be accessed at the Public Sector Classification Guide http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-285768
Local Authorities www.openlylocal.com/councils/all
National Parks Authorities http://www.nationalparks.gov.uk/
Educational Establishments in England and Wales, maintained by the Department for Children, Schools and Families including Schools, Universities and Colleges but not Independent Schools http://www.education.gov.uk/edubase/home.xhtml
Police Forces in the United Kingdom http://www.police.uk/?view=force_sites
Fire and Rescue Services in the United Kingdom http://www.fireservice.co.uk/information/ukfrs
NHS Bodies England http://www.nhs.uk/ServiceDirectories/Pages/AcuteTrustListing.aspxhttp://www.nhs.uk/ServiceDirectories/Pages/
Hospices in the UK http://www.helpthehospices.org.uk/about-hospice-care/find-a-hospice