The Centre for Procurement Performance (CPP)

Training gives a great boost to efficiencies within the school. It acknowledges the importance and of the ‘licence to purchase’ role held by the nominated person. Helps build on this persons existing knowledge and expertise and provides them with an excellent ‘re-focus’ opportunity by:

• being able to identify simple and straightforward buying strategies that can be adapted for use in the school;
• being able to quickly recognise whether the best looking deals come with a sting in their tail or at an extra cost for the school;
• offering information on good value arrangements in place that can be drawn on and reduce time & effort spent on this task;
• sharing and listening to real problems schools come up against and getting hints and tips on how to avoid or overcome these;
• building relationships with colleagues in a new set of schools. Drawing on their knowledge and expertise to come up with innovative solutions to purchasing – possibly bundling purchases together or avoiding a purchase altogether through sharing specialist equipment or staff resource/expertise;
• having confidence to make a purchase by understanding the rules that apply e.g:
  • how contract regulations operate: although school governing bodies can set their own internal controls the minimum standards set out in the LA regulations cannot be relaxed. The regulations apply not only to when it is/isn’t appropriate to go out for a formal tender but covers the required standards of behaviour to prevent anyone breaching probity rules;
  • how to run a ‘formal’ tendering process - what to do in the run up to that, how to run the tender, the award of contract;
  • the skills needed to successfully manage the contract. and
• having the confidence to challenge a purchase.

Planning ahead is a good way of finding scope for efficiencies. It gives time to question and assess whether a purchase is necessary, if alternative solutions are available (eg. twinning resource with another school), and if the timing is right.

It is recommended that purchases are linked to the schools development plan and consider:

• purchase timing:
  • if possible, avoid bulk buying at the end of the year. Schools across the board will be doing this too and suppliers will be hard pressed to maintain delivery timescales and quality standards. It also means there are unlikely to be opportunities to negotiate the competitive rates purchasers expect when buying in bulk;
  • if similar purchases are on the horizon (or new products) it may well be worth postponing this purchase and bundling together in a later requirement. This will help reduce costs and achieve best value;
• the range of contracts in place. Many schools organise their contracts in a central contracts register – if your school isn’t one of these it might be time to get started with the register. This is an excellent way of keeping track of the number of agreements in place, their value, outputs, and termination dates. Linking the register to the school development plan will help highlight contract renewal dates. This makes life easier for the school management team and governors group (eg. finance committee) to regularly review the register. It may also feed into other governors’ committees with an interest; and
• tender arrangements. Prior to a formal or complex procurement a project plan should be drawn up, setting out all the strands of work, authorities required, how the strands will be taken forward and completion timescales. The important aspect of any tender timetable is to have plenty of space to conduct the process. The more complicated/important the contract the more time needed. For example, if the existing contract expires on 31 August, the process should start from 1 March, when you need to be made aware that the contract is coming up for renewal.
• Please, keep a close eye on contracts which have short notice periods for termination. Good contract management will help spot rumblings from a contractor that they are not happy. This could be an early warning signal that the contractor will pull out of the contract early by exercising the early termination notice.

This tip isn’t so much about finding out whether there is money in the budget or an authorisation required for a purchase - although these are important. It is aimed at understanding the rules that apply to spending public money and responsibilities that go with that.

You will not need ‘in-depth’ knowledge of the legal requirements surrounding procurement set by European and national parliaments. What you will need is an awareness of appropriate behaviour in dealing with suppliers, declaring any conflicts of interest (relationship with potential suppliers) and having an awareness of the limit on the powers that a school has when it comes to purchasing. These limits are set out clearly by the LA in their standard contract regulations (or standing orders) and include e.g.:

• the £ spend limit requiring informal quotes;
• the £ spend limit requiring a formal tendering exercise;
• the £ spend limit when a competition must be run through Europe;
• disposal arrangements; and
• behaviour standards to apply to prevent any possible misuse of public funds (probity standards)

Many schools governing bodies have tightened up the limits set in the LA regulations, but it is worth stressing that no school can relax these regulations. Best to become familiar with the LA regulations.

The limits and processes put in place are aimed at ensuring a free flow of competition between suppliers. This in turn helps make sure that when public money is spent it is through good value for money deals. Although applying these processes can sometimes involve a bit of additional work, this is worthwhile as it helps protect you and the school from accidentally breaching the legislation. Important, as any breach could involve the school in hefty legal costs – might even impact on the individual concerned too. For example:

Equipment required for new IT suite within the school. One of the parents who runs an IT business assesses what is needed and offers to supply the school with £21,000 worth of IT equipment – plus lots of extras. This looks like a great deal.

It would be wrong to take up this offer as no fair competition has taken place with other suppliers in the market. If the school were to take it up they might find (at best) the deal hasn’t really addressed the real needs of the school, including maintenance and other whole life costs plus. At worst the school could be left open to damaging legal action.

Training & good planning will help avoid any pitfalls

As part of general good practice, before going ahead with a purchase:

• check whether anyone elsewhere in the school can help out with a spare or loan item. This need not be restricted to the school itself – perhaps specialist equipment could be shared between schools e.g. loans to cover specialist fieldtrips;
• hold a school amnesty - faculties checking to see what they may have over ordered and offering to share;
• check whether someone else in a different school is buying, if so there is an opportunity for some collaborative buying. A school can choose to work with their local authority or a group of schools when letting new contracts or draw on existing contracts via a buying consortium;
• consider innovative ways that the purchase may be made. Some schools have e-procurement systems with a quote or e-auction facility. This is relatively new technology with only a few examples of local authorities piloting it in a collaborative way. However, e-auctions can be successfully used as a tool for collaborative e-procurement where a number of schools take advantage of their local authority’s electronic auction for particular goods or services; and
• consider whether there is scope for drawing on the good will of parent volunteers to do some basic housekeeping tasks e.g. clearing rubbish from the grounds, a bit of painting etc.

If savings have been made (financial or time savings) always record these, no matter how small. It can be useful information to include in the schools report and help you build up an efficiency picture for the school.

This tip seems fairly obvious as there really is no point spending 3 hours of administrative or teaching staff time to save £1. This can sometimes be forgotten in the need to get a good product price.

• teachers and other school staff can end up spending a significant amount of their time sourcing goods and services when there are LA endorsed consortia and other arrangements in place. It makes good sense to use the agreements set up. If there is someone in the school with the ‘licence to purchase’ role they will be invaluable here.
• good planning can avoid one-off purchases and bring about economies of scale that can attract favourable negotiated rates. When making one-off purchases it is easy to forget the need to factor in the ‘whole life’ cost of a product. These costs range from delivery charges, cost of consumables, on-going maintenance and final disposal. As an example:
  • on office printer looks as though it needs to be replaced. Someone has spotted a magazine with a cheap alternative printer that has a free offer with it. What has not been made clear is that each time one of the colours runs out, a the whole ink cartridge needs to be replaced. Reliability and robustness of product might also cause some issues. Taking all of these factors into account - cost of printer, consumables etc. it could be that the total costs are much greater than originally thought.
• The person with the ‘licence to purchase’ role can make a real difference in spotting the inefficiencies within any procurement. They can also make sure that any specification going out to suppliers will be built to address the issues involved.

It is really tempting when buying something to go for ‘best brands’. We tend to feel comfortable with a brand recognised either from marketing campaigns or because we use them at home.

Our familiarity with best brands doesn’t necessarily mean they offer best value for money. There are very many good products on the market that offer quality and reliability equal to or in excess of the branded product - and at a competitive price. If in doubt, why not do a small scale pilot – e.g. will that cheaper paper jam the printer and cost more in staff time or will it work just as fine as the more expensive branded paper?

Every time a brand item is asked for it is worth asking the question – “why that particular brand?”. Once this has been answered the alternative brands on the market can be considered to see whether they match up. Very often they will and at a much more competitive price.

A purchasing consortia is simply an association or group of people who join together to minimize costs or achieve better value for money. Many LEAs have worked to set up consortia arrangements to achieve best deals for schools. These consortia operate on a joint committee basis with one LEA usually taking the lead, e.g:

• ESPO, NEPO, WMS, YPO etc.

The higher the volume of business going through these agreements the better the negotiated discount to pass on to schools. If your LEA supports one or more of these consortia it is worth putting your business their way as it will pay off in the longer term.

There are also specialist consortia groups for the supply of furniture and IT – CFG and BECTA.

Schools can work together on a consortia basis to maximise their purchasing power for either ongoing or one-off purchases. The main benefits for doing this are:

• Sharing administrative workload – an advantage when tendering is involved.
• Increased purchasing power – greater volumes of business may encourage suppliers to create better deals for the group.
• Reduced service/purchase costs via bulk buying, eg one bursar hired between 5-10 small primaries would be easier than each primary hiring someone for half a day each week.
• Ability to obtain goods/services– some companies may feel schools are too small to be worth bothering with.  A consortium would provide the necessary size and influence.
• Experience – a consortium including larger secondary schools means that smaller schools can use their experience.
• Greater negotiating power – businesses may be tempted to take advantage of smaller schools; however, the threat of losing business from a group of schools will have an impact.

There are some downsides, e.g. if the savings are only a little more than prices offered by other suppliers then the extra person time spent chasing discounts could cancel out any savings made. It is always worth asking your LEA procurement team for some advice.

Negotiation is much easier if someone is designated within the school as holding the ‘licence to purchase’ role (possibly more than one person depending on structure of the school). Their negotiation skills will be honed by training (tip 1) and practical experience. Even if they won’t be directly involved in the negotiation they will be able to advise or team up at the meeting.

Some things to consider.

• When to negotiate? Never pass up an opportunity to negotiate but make sure the opportunity is right (don’t spend hours saving a £).
• What is the right price to pay? Shop around get estimates, remember negotiation isn’t only about getting the price down it could also be about – getting increased quantities, better quality, better delivery timescales, gaining an additional service (eg. ongoing maintenance) etc. It could even be about all of these things.
• Who is the right person to negotiate? This will depend on whether the item is specialist requiring product knowledge and who has authority to make purchasing decisions on behalf of the school.
• What your bargaining points are. Does the supplier need your business, what’s in it for them – all about finding the right levers to use.
• What is your goal - what you would ideally like from the deal, what would you be prepared to settle for? Take a bit of time before the negotiation to sit down and think through what bargaining points you have and hoped for goals (fall back ... ideal) through. Even if a price reduction is not on offer what extras would give the school an extra efficiency? Remember, win-win is always best – nailing the supplier to the wall might end up in service issues later.
• Seal the deal – get it in writing. At the end of the negotiation summarise everything that has been agreed including the quality standard for the item. This must be followed up in writing straight after the meeting making it clear that this is the final agreed position.
• And ... enjoy this experience, pick up points that can be used next time around.

It’s what’s in writing that matters. Although there may be a verbal agreement with the supplier that something will be delivered on a particular date, goods will arrive in a particular way, ‘extras’ will be given - if it isn’t in writing there’s a better than average chance that you will be an unhappy purchaser. So, please put it in writing on your order.

Terms & Conditions.  Always make sure the terms and conditions that are used when sending out your order are the schools. Never accept any changes to these as these as the change has probably been made to advantage the supplier at the disadvantage of the school. The Terms & Conditions each Local Authority expects schools in their area to use are standard and aimed at protecting the public money the school is spending. If the supplier is uncomfortable in using them, it might be worth questioning whether you have the right supplier.

Approaches from a company salesperson: If approached by a salesperson offering a ‘good deal’, always get the details in writing. Take time to read through the terms of the deal offered. Never allow yourself to be pressured by the salesperson –they need the sale, you’re in no great hurry to have what they’re offering. If you are being pressured it’s likely the deal is not worth it.

Getting Quotes: An approach worth taking when going out for informal quotes when purchasing an unusual or challenging item is to set out in writing what the school wants (essential when going out for formal quotes or formal tenders). Before contacting a supplier

• jot down what it is you want (your requirement/specification). This helps build a common understanding and reduces opportunities for misunderstandings. If a supplier has misunderstood its likely others will too, even if they haven’t come back and raised the question. Where this happens contact each supplier and outline the new information they might want to know – never let them know who else is involved in putting quotes together.
• get quotes from suppliers. This allows a fair comparison to be made between quotes supplied. It is good practice that the person who is dealing with the quotes is also the same person who speaks to suppliers or is involved and any site visits etc.

Most LAs will have guidance on how to do this or have a formal process in place for handling quote requests and quotes.

You may very well ask why a good deal should be shared particularly one that you’ve spent time finding. It is very simply that when sharing information you increase your chances of getting something back in return, e.g.:

• Information sharing can be on the basis of:
  • Finding out if the same supplier is being used by your colleagues in other schools. This opens up possibilities to pull together to get an even better deal from the supplier (see tip 7 – improve your buying power).
  • Benchmarking the quality of service others are receiving from their suppliers. This information is worth having as it can give confidence when going out to for an ‘informal’ low value purchase. It can also be used in the contract management of a current service to improve poor performance.
  • Benchmarking on price (but please see note below). We know of at least one national supplier who has different catalogue prices with different customers for the same goods. It could be that the price you are paying could be even better.

PLEASE NOTE: some caution should be exercised if there is a formal contract agreement with a supplier. Exchanging information on price and other aspects specific to the agreement (number of staff etc.) cannot be shared without approval of the supplier as this information is ‘commercial in confidence’. There may be some Freedom of Information considerations too – best first to contact your Local Authority purchasing department and ask for their advice.

Not only can CPP give hints and pointers via our e-mail address: cpp.enquiries@dfes.gsi.gov.uk, but most Local Authorities have a Procurement/Purchasing Team. These teams are resourced by people with practical procurement knowledge and an understanding of local issues. They can provide help and advice to schools on the various issues that can crop up. In some cases legal advice can be obtained on your behalf – this may be free in some instances but it is always worth checking first.