NEPO – Successful Regional Procurement Collaboration Comes Of Age (Part 3)

In the final part of our series on NEPO – the North East Procurement Organisation – we will take a look at one of the organisation’s most high-profile innovations - the specialist professional services “vendor neutral” framework contract. (Part 2 is here.)

Known as NEPRO, it is operated by Bloom Procurement Services (who work with us here at Spend Matters, to declare our interest). This arrangement allows user organisations to channel all specialist professional services spend through NEPRO in a compliant manner, and provides value in a number of ways, from Bloom’s market-making ability and knowledge of the supply base, through to contract management support.

But how and why did NEPO come up with this model?

“We saw the neutral vendor model worked well for contingent labour and thought, why not try this in the consulting space?” explains Sinclair.

“Traditional consultancy contracts and frameworks didn't always work well. We were frustrated that often we saw similar work repeated in different authorities, as users didn't share the knowledge that came from consulting assignments. And indeed some organisations placed too much reliance on consultants. But it was also clear that there were times when external advice and support was necessary so something was needed.”

So in 2012, NEPO launched the new framework which led to the firm that was then “V4” winning the contract.  One of the first users was Durham County Council – as Sinclair says, “we are still so grateful to Darren Knowd in Durham for taking the risk, embedding the new process and showing it could work – at a time when some people thought we were mad!”

NEPO set up different standard pay grades for different levels of consultant, a process for benchmarking price and, perhaps most importantly, educated users that they needed to turn consulting “roles” and inputs into outputs and deliverables. Although the IR35 legislation on employment wasn't as high-profile then, that turned out to be very important in 2017 when it became a key issue in government.

“By insisting that all the assignments under NEPRO are output-based, we have avoided any issues for our customers – these are clearly contracts for services, not employment contracts.”

After Durham, Cumbria County Council came on board, other local members followed, and then others outside the region started seeing the benefits. The NEPO team saw opportunities in universities, who had a need for different types of specialist experts and advisors, and the arrangement has grown over the years. “We re-tendered the contract in 2015 and what is now Bloom Procurement Services retained their position as the delivery partner,” Shelley explains.

In recent months, central government’s Crown Commercial Services has had some problems with their consulting framework. Indeed, the “lot” for general consulting has now expired and is no longer legally complaint. That has helped drive users to NEPRO, including even some organisations who are close to central government.

“Unlike the CCS central government policy, no-one is mandated to use our contracts,” says Sinclair.  “Which means we have to make sure they meet user needs. We do speak to some organisations who want to use NEPRO but are being mandated to use contracts that they don’t always think are fit for their purpose!”

In addition to NEPRO appearing to work well for user organisations, NEPO promote the benefits to their business community. “We've also encouraged North-east based suppliers to sign up and we are looking at how this sort of ‘export’ model might work in other category areas.”

So, despite having to keep quiet about football for my day in Newcastle (as a suffering Sunderland supporter), it was an illuminating, enjoyable and motivating session. Motivating, because it is really good to see an example of local government procurement being innovative and taking the lead, even in these difficult times of austerity, when some councils are really struggling financially. The focus on supporting local business – without getting into bias and favouritism – is also admirable, so we wish NEPO and everyone in the region involved with them continuing success.

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