Regulaton & Policy
Private Firm Offers Frameworks To Contracting Authorities – Via Ilkley Grammar School!

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!

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“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/

MentalHealthTrustListing.aspx

http://www.nhs.uk/ServiceDirectories/Pages/CareTrustListing.aspx

http://www.nhs.uk/ServiceDirectories/Pages/AmbulanceTrustListing.aspxhttp://www.nhs.uk/ServiceDirectories/

Pages/SpecialHealthAuthorityListing.aspx

http://www.nhs.uk/ServiceDirectories/Pages/OtherListing.aspx

Hospices in the UK  http://www.helpthehospices.org.uk/about-hospice-care/find-a-hospice

 

Voices (5)

  1. Phoenix says:

    A licence to print (public) money. This should be stopped, plain and simple.

  2. Ian says:

    Another Pagabo framework for ‘furniture supplies and installation’ interestingly advertised by another school – South Hunsley School and Sixth Form College, awarded certain lots to a ‘Cloughtons’, a company with the exact same trading address as Pagabo. Coincidence?

  3. Little Acorn says:

    There are other examples our there is you know where to look!

  4. NEDS says:

    Framework agreements in general make a mockery of public sector procurement and the EU Regulations. In reality the frameworks have little or no value to a number of the suppliers which are on them, something which is not obvious until it is too late. The amount of work which has to be put into the PQQ and then the tender itself, along with then having to pay a membership fee, as well as a percentage of the order values (if you are lucky enough to receive an order) often attributes to suppliers losing money to simply be on a list. Then you have the mini-tenders, where you are again expected to better your rates. You often also have suggested quantities of work, which is always caveated as being for guidance only and not binding in anyway on the client, so a supplier can put a rate in based on providing 1000 of something and in reality only be given an order to provide 10 – yet the price is the same regardless.

  5. Digby Barker says:

    1. The benefits of a Framework Contract per se include the opportunity for members to ‘sell’ their products/services by approaching the CAs who are authoirised to use it. Many suppliers just sit back & wait for CAs to come to them & then compplain that they don’t get any business;

    2. “The EU said that the CA letting the contract must stipulate to some reasonable level of detail which other bodies could use the contract” because (I imagine) this supports Transparency in general and in particular helps interested EOs to judge the possible scale of the business on offer and hence whether the opportunity is of real interest to them. It also assist them regarding #1. The issue for the CA in including many eligible CAs is whether the can justify – if required to do so by e.g. the EC – the estimate of the Contract Value they must include in the CN;

    3. “……. so it is hard for them to price their bids competitively”: CAs have the option of setting up a Framework Agreement rather than a Framework Contract leaving price to be determined in each mini-competition. In those circumstances the FA is established in a similar way to that in which DPS’ are under PCR 2015 i.e. on the basis of Selection not Award criteria. It is open to EOs to decide which contract opportunities to pursue and targetting F/W Agreements rather than F/W Contracts might be a sensible strategy where pricing is an issue for them.

    4. I understood it was not lawful to charge suppliers to particpate in public procurements other than in the case of Utilities. Where suppliers come across such practices they should draw this to the attention of the CA concerned at senior level and remmeber that they don’t have to particpate. And where this or other questionnable practice is found, there is always the option of reporting them – and indeed the particular procurements mentioned in this Article & and Ian’s comment – to the EC, requesting that they be investigated: there is a failry simple form on the europa.eu website for this purpose.