Q: Why does Procurement and Commissioning matter to me?
A: Whether you are a social enterprise or a charity, if you are interested in the delivery of public services, the increasing likelihood is that you will have to look towards getting your services procured by the public sector, be that a local authority or a national governmental body. This is true across a huge range of services including the provision of supported housing for those in need, training for the unemployed, domestic collection of recyclable materials, running bus routes and providing care for people with mental health problems. You may find you need to deal with a local body such as a local authority or a primary care trust or a national body like the Department of Work and Pensions or the NHS.
Commissioning is the process by which government departments and local authorities secure their services. This is usually done through a legal procurement process that will require potential service providers to submit a tender. This as outlined below, is often a multi stage process. In general terms, commissioning refers to the process as a whole, and it should be clear that third sector organisations can do a lot to influence this, prior to the legal procurement process commencing.
While the work required in submitting a tender and the legal obligations of entering into a contract for service delivery may seem daunting, the advantages are huge. A contract will enable a service provider to move away from grant funding and secure a framework for delivering work, in accordance with the ‘charitable’ aims of the company that is properly paid for a given timeframe. In simpler terms, you can provide your service at an agreed price, and be sure, that subject to performance, you will do it for the length of the contract.
Q: What does procurement and commissioning involve?
A: ACEVO has produced an introductory factsheet on procurement and commissioning which explains the basic aspects of the legal rules governing procurement processes. You can download this factsheet here. This is complimented by a series of further factsheets which can be downloaded here. We are also developing and running a range of introductory training events on procurement and commissioning. You can find out more about events we are running here.
Q: I would like to discuss procurement and commissioning with someone. Can you help me?
A: ACEVO runs a Commissioning Support Service. You can contact it for advice on a wide range of issues related to procurement and commissioning including:
- Changes to policy and regulations and the impact this will have on commissioning
- How to engage with commissioners
- How to engage with prime contractors
- Finding partners to bid with
- A specific procurement process and how to submit the tender
- Your training needs
- Impact measurement and performance management
- Budgets and targets
- The legal implications of the procurement process
- Personalisation and individual budgets
- Changes to health care commissioning as a result of ‘World Class Commissioning’ and the NHS
To access the support service email us via email@example.com or call 020 7289 4937. If you require more in-depth support, ACEVO can provide you with a range of consultancy support options.
Q: I provide infrastructure support services to the third sector. How can I influence commissioning processes?
A: As part of our work for the Capacitybuilders funded Income Generation National Support Service, ACEVO is in the process of developing a range of resources to increase skills and knowledge within the infrastructure support provider part of the third sector. These include:
Procurement Champions Network
This is a professional development network for experienced support providers working on procurement issues. The network meets on a quarterly basis.
Working with a range of partner networks, ACEVO has organised a range of roundtable meetings that bring third sector organisations together with potential commissioners and partners. The meetings provide an opportunity at a local level to discuss new opportunities and find solutions to existing barriers with a view to encouraging third public service delivery. The meetings can all be adapted and replicated at the local level to address similar issues around the country, and this projects aims to provide the resources and inspiration for support providers to do so.
Legal Guide to Procurement and Commissioning
Legal firm Bates Wells & Braithwaite have produced an entry level legal guide to procurement and commissioning for support providers which provides guidance on the law behind the process and how support providers can influence it at the local level.
ACEVO is developing a major training programme for support providers on Procurement and Commissioning. Details of this programme can be found here.
Q: What does TUPE mean?
A: The Transfer of Undertakings (Protection of Employment) Regulations 2006 is essentially a piece of legislation protecting the right of employees, currently delivering the service for the commissioning body. It allows for the transfer of staff from the current service provider (local authority or third party) into that of the successful bidder. If TUPE is being applied to a specific contract then it should be implicit in the tendering process, that a number of staff will be transferred. You should be able to get a clear picture of who might be transferred and what the terms and conditions of their employment are.
Thanks to poor procurement practice, this is not always possible, and you will have to consider your response and seek appropriate advice. If you can not access all the information you need to consider the TUPE implications, then you will need to submit costs which are subject to disclosure of TUPE information by the commissioning body.
This will clearly have an impact on how you cost service delivery. The amount you charge will have to account for this. Less obvious will be your need to consider the pension arrangements of the transferred employee, and particularly if they are on a final salary pension scheme. There may also be issues related to integrating staff into your working methodologies and also in terms of the quality of the staff being transferred. It is possible to protect yourself against pension implications through insurance schemes. This cover does come at a cost, and will need to be considered in your budget.
Q: My organisation is too small to access procurement opportunities. What can I do?
A: If you do not have relevant experience of service delivery, then you will be, in most cases, excluded from full procurement processes. The options listed below, enable you to expand your business and deliver work in support of your key aims, whilst developing your relationships with relevant government commissioners and private commissioners. Alternatively, you may find the idea of delivering a service to your entire borough more than you want to do. These options may give you a way of finding a niche for your services within the context of fully procured governmental services.
Service Level Agreements
If you are a relatively new or small organisation, the idea of expanding to take on a full long term local authority contract might seem a little scary at first. One way to trial your capacity to deliver the service might be to operate under a Service Level Agreement (SLA) with the local authority. The SLA is a negotiated agreement between the service provider and the customer. The SLA records a common understanding about services, priorities, responsibilities, guarantees and warranties. Each area of service scope should have the 'level of service' defined. The SLA may specify the levels of availability, serviceability, performance, operation, or other attributes of the service such as billing.
This is particularly relevant if the type of service you are proposing is a new one for your area. A service level agreement will enable you to trial the potential service and see how it works in your borough. A project of this type might be termed ‘Action Research’. Some services end up being run for years under service level agreements, but if you are hoping to expand your service, in the long term the local authority will probably have to run the service through a full competitive tendering process.
If the service you want to deliver is already part of a much larger contract, or if departments and contracts within your local authority are being rationalised into a smaller number of larger contracts, then the principle option open to you might actually be to search for sub-contracting opportunities. In this case you will be seeking to work with, what is generally referred to in commissioning processes as a Prime Contractor. Prime Contractors could be drawn from the private or third sectors, and will in most cases be well established names in service delivery, although their may be big players at the local level in a given locality.
If you can provide technical expertise and capability, deliver work in a professional manner as well as offer local community buy-in, then the chances are that both private and third sector prime contractors would be interested in working in partnership with you. Another bargaining point might be that, because of your ability to deliver this part of a wider contract, the prime contractor will not have to expend resources on tooling up to deliver this part of the contract.
As an individual organisation, you may not be able to access the procurement process, but the development of partnership working might allow you to form a consortium that really can work at scale. Relevant partners might include other local third sector organisations; experienced third sector organisations who deliver this kind of service in other parts of the country and/or private sector companies who deliver that type of service at the local, national or multi-national level.
Developing a truly viable and rewarding partnership takes time. You should be working to develop relationships with potential partners long before the tender is issued. A key part of the process will be to have a governing document for the partnership that sets out your terms of reference, and also includes how you will handle issues of poor performance amongst the partnership.
While not exactly an alternative procurement option, social clauses can play a valuable role in ensuring third sector service delivery. The use of social clauses enables a local authority to secure genuine community benefit from the delivery of its services. Commissioners cannot specify the origin of potential suppliers, but they can use social clauses to include targets for local employment and training. They can also require that a contractor work with specific third sector organisations as sub-contractors.
The use of social clauses is patchy at best. They undoubtedly offer an extremely valuable opportunity to secure tangible outcomes for the local community, but national support for their widespread adoption is not forthcoming at the government level.
If you have any further questions regarding procurement and commissioning contact the procurement and commissioning team.