Crown Commercial Service – New Cost-Recovery Contract

We don’t feature new contract opportunities announced by the UK government’s Crown Commercial Service (CCS) as a matter of course, but some are novel and interesting enough to deserve a mention, and the new framework for cost-recovery services is certainly one of those.

Civil Service World reports that CCS has launched a process for a £50m-plus framework designed to help the public sector recover money from its existing contracts. That includes spend and invoice analysis, telecoms and utilities spend analysis. (The official TED notice is here).

CCS is seeking between two and 12 suppliers to fill a framework “for the provision of spend analysis and recovery services for all UK central government departments and wider public-sector organisations. The winning bidders will be expected to analyse the government’s systems and practices for accounts payable, invoices, and payments.”

CCS has quoted a contract value of some £50 million in total, which is interesting. In the private sector, these services often are provided to customers on a gainshare or contingency basis. So typically, the provider is not guaranteed any income at all, but gets anything from 10%-50% of the savings identified; the period that applies to is a further negotiating point (50% of savings for three years is a very different commercial proposition from 10% for one!).

There are pros and cons around gainshare, and some firms have been exploited really by unscrupulous providers, so it may be that CCS has possibly better ideas about how to pay for these services. We will no doubt find out at some point.

In our opinion, this type of service is well worth considering for many organisations. Unless you are a very mature, competent and tech-savvy organisation already, the likelihood is that processes such as examining invoices for duplicates, over-charges and so on will come up with some worthwhile savings.

And unlike most other activities that drive savings, this is painless. You don’t need budget holders to agree to change suppliers, or to run complex tendering or auction processes. The savings are just sitting there, in a sense, and should be readily realised in most cases.

There are seven lots in this case, ranging through general cost recovery to specific areas such as telecoms, agency spend and rent / rates costs. It will also be interesting to see what sort of organisations bid: software firms, consultants, or cost-recovery specialists – or perhaps consortia? We’ll watch with interest anyway.

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