Spend Matters Paper – Driving value from multiple supplier framework contracts

So here’s a plan. Through August, we’re going to highlight again all the research papers, briefings and so on that we’ve produced in the last two and a half years. We’ll  include what we said when we first launched it, and of course the link so you can download – free on registration. Why not use the quiet time in August to brush up on some procurement thinking? And they haven't dated, in our opinion. 

 Today we have our very first Spend Matters paper. “Driving real value from multiple supplier  framework contracts”. Here’s what we said about it in early 2011...

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The Eastern Shires Purchasing Organisation (ESPO) is one of the UK's  ‘Pro5’ collaborative buying organisations who put contracts and frameworks in place that can then be used by a range of local authorities and other public bodies. Based in Leicester, they serve large parts of the South, East and Midlands.

They’ve just launched a new catering framework, that includes a range of providers who schools, colleges and others can contract with to provide catering services, using over-arching ESPO terms and conditions. Nothing remarkable there – but there is a very interesting and innovative aspect to it.

Intenda (a Spend Matters sponsor) has designed a technology platform / solution that enables users of the framework to run ‘mini-competitions’ easily, in a legally compliant manner, and in a way that should help them get the best possible value for money.  And that VFM aspect is key; most of the value delivered through framework contracts usually comes from carrying out the ‘mini-competition’ or call-off phase in an intelligent manner; it is that process, more so perhaps than the initial contracting phase, that determines real value.

Why is the new solution innovative? Well, I’m not aware of anyone previously looking to automate and improve the mini-competition stage in this way, or planning how it would be handled as an intirnsic part of the broader procurement process.

And it may answer one of the dilemmas facing public procurement. There has been a lot of negative comment about frameworks – from the National Audit Office and Audit Commission, even from Ian Watmore, COO of the Cabinet Office and John Collington’s boss.  We’ll look at the reasons why there has been this negativity in a future post,  but there is no doubt that frameworks are a very useful and convenient tool for public procurement (and indeed for the private sector as well).  I’d go so far as to say it is difficult to see how the public sector could operate without them.

The new Intenda / ESPO platform also addresses a further issue which is particularly serious for the devolved public sector - while framework contracts may be set up by procurement experts, the users who then implement the agreements are often not procurement people at all. In the case of this contract, it is school managers, bursars and teachers who will run the second stage selection. So given that the call-off stage is so important in achieving value, giving those non-experts tools to run that process effectively is a major step forward.

Reflecting the important role frameworks do and should play, we’ve written a new Spend Matters White Paper on the topic, which also uses the ESPO catering framework as a case study.

"Driving real value from multiple supplier framework contracts - How technology can simplify contracting and help buyers maintain competitive pressure when using frameworks, in the public sector and beyond"  is available for download, free of charge on registration here, and we think it is relevant for all procurement professionals, public or private sector,  who make use of frameworks, structured preferred supplier lists and similar devices.

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