10 Procurement tips for Education Institutions Compiled by National Procurement Advisory Group (PAG)

National PAG have compiled a list of 10 procurement tips aimed at education institutions who do not have access to a procurement professional. This document is also available to download here (PDF).

1. Understand what you spend your money on

Undertake spend analysis on your non-pay expenditure. Most financial reporting systems
used by colleges will have a facility to run a report to identify spend with suppliers.
This can then be used to identify your top 50 suppliers spend and then guide how you should
be tendering your contracts in accordance with your financial regulations.
More information can be found at FELP.ac.uk

2. Create a centralised contract register which is a list of all your contracts with contract value and expiry dates

  • This will result in better management of contract renewals and avoid contract termination dates being missed.
  • Reduces risk of incurring additional costs in either extending the contract or paying early settlement fees.
  • Avoids risk of breaking Public Contracts Regulations if you extend a contract without provision to do so within your originally tendered contract.
  • Detail institutional manager with contract responsibility, supplier name and contact information, contract start, values, review and termination dates.
    Register can be logged via specialist procurement software (e-tendering guide) or be a simple excel spreadsheet. An example of a spreadsheet can be viewed here.
  • If you use a spreadsheet you could also create a folder to place all your scanned contracts in for easy access in one place.
  • Another option is to use the contracts register to log supplier performance reviews and possibly even savings achieved.

3. Update your college financial regulations in relation to procurement of goods/services

If you already have this in place it is good practice to review this regularly to ensure you are still compliant with procurement law. You may need expert help to do this if you do not have procurement expertise available within your college.

The contents of the financial regulations will direct staff on what to do including how many quotations they need and at what value they need to go out to tender and the procedure to follow.

The college senior management team will need to lead by example and demonstrate to their staff they are on board with the financial regulations and procurement initiatives and tips they adopt, as then it is easier to promote best practice procurement across the college.

4. Train staff with budget responsibility on the basics of procurement.

  • Refresh staff on college financial regulations and procedures.
  • Train staff on basic negotiation skills. This can be a training session on-site however there are plenty of online training resources available to provide access to training.
  • Training could be introduced as part of the induction process your college operates for staff.

5. Ensure you have contracts and service level agreements in place with key suppliers.

  • Ensure they are signed at commencement of the contract.
  • Monitor and review throughout contract term. Contract management is extremely important.
  • Try to ensure you use college terms and conditions rather than supplier terms and conditions as they will in most cases not be in the colleges best interest including clauses which limits a supplier’s liability to you in the event of a breach of contract or has shorter payment terms or has unfair client obligations which are hard for you to meet.
  • In the event you have to use supplier terms and conditions make sure they are read to ensure the contents reflect your expectations and if they contain clauses you are not happy with then report to an appropriate manager within your organisation as the supplier may need to be to challenged and terms amended.
  • Ensure your contract has appropriate termination clauses.
  • Produce a procurement strategy or operational plan when to commence the tender planning process. Example procurement strategies are available
    via felp.ac.uk
    Create a suite of terms and conditions which you can use for your contracts. For example, specifications and terms and conditions used by other colleges use FELP which is a free online resource for colleges www.felp.ac.uk

6. Identify your needs

  • Identify if goods/services needed or wanted.
  • Ask yourself if the purchase will add value to the organisation and its learners.
  • Are there more appropriate alternatives to purchase. Examples include reusing, recycling, borrowing, hire or lease. Remember the 5 Rs, Reduce, Reuse, Recycle, Recover, Repair.
  • Consider other costs such as installation, maintenance, consumables and are there sufficient funds available to cover all these costs.
  • Use FELP for sample specifications as per tip 8 or the CPC communicator as per tip 7.

7. Collaboration

  • Promote collaborate buying within departments to reduce cost by obtaining bulk order discounts.
  • Collaborate with other colleges using economies of scale to receive more competitive pricing. For more information visit FELP
    Join procurement network meetings chaired by National PAG members. This will enable you to network, share knowledge experience and good procurement practices in addition to benchmarking prices you currently
    pay. There is normally a procurement network group available to join free of charge within each region – theCPC.ac.uk/PAG.
  • Use the free CPC communicator to communicate with other educational institutions to seek advice, obtain specifications or see if anyone is going to issue a tender shortly where you can collaborate CPC Communicator
  • If you decide to use the CPC communicator then please contribute to its continued success by responding to requests made for information by other colleges.

8. Tendering above EU Thresholds

Publicly funded organisations such as colleges are obliged by law to tender out its supplies and services above a tender threshold set by the European Commission. These are updated every two years and the current thresholds set on 1st January 2018 is £189,330 for supplies/services and £4,733,252. If using a framework produced by consortia such as Crescent Purchasing Consortium they will have already carried out a tender process in compliance with the regulations to set up their framework. For more details on the thresholds please visit; felp.ac.uk/taxonomy

  • Use appropriately qualified and experienced staff or third parties to tender your requirements. For more information on how to run a tender in compliance with The Public Contracts Regulations.
  • Ensure third parties comply with procurement law such as public contract regulations as any failure or non-compliance will come back to you as they are acting on your behalf.
  • Consider using consortia frameworks which have already been tendered out. An example may be a cleaning framework consisting of a number of suppliers who you make a direct award to or conduct a mini competition between the suppliers on the framework to see who best meets your requirements. Consortia frameworks normally saves time for higher value tenders.
  • If using consortia frameworks follow the guides which consortia normally produce for each framework.
  • Plan and start the tender process early enough to give bidders and yourself plenty of time as last-minute tenders may result in poor returns.
  • Do not over specify your requirements and consider engaging with suppliers prior to issuing tenders to receive constructive criticism or suggestions on your proposed specification that may prevent increased costs. If you should do this be careful of a potential supplier changing your specification which gives them undue competitive advantage over other suppliers. For more guidance on writing specifications read the FELP guide on specification writing
  • Ensure when you tender out requirements that you include all of your requirements. If you do not then you may have to negotiate a variation of contract which will incur additional cost which may be higher than at the tender stage. Too many variations may negate any cash releasing savings made at time of tender.
  • Record value for money and savings achieved after each tender process.

9. Contract sign off

Ensure that contracts can only be signed by an agreed list of staff. This may be linked to a signing authority list depending on value or just members of the senior management team.

Ensure there is a mechanism to review contract before signing. Download an example contract signature authorisation form

10. Performance manage your suppliers

  • Hold regular review meetings relative to the contract importance and risk. For more information view this guide to contract managing
  • Ensure staff have basic training on contract managing to ensure value for money continues to be achieved.

Download and Keep (PDF)