How to make procurement cost-effective

07/02/20

The process of procurement for public sector bodies has a bad reputation. 

Due to necessary regulations, buying in services or products can take organisations months. The government says “the overriding procurement policy requirement is that all public procurement must be based on value for money, defined as “the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought”. This should be achieved through competition unless there are compelling reasons to the contrary.

However, meeting those procurement competition rules brings huge complexity. First, you will need to work out whether your contract falls under the monetary threshold required to publish your tender to a wider network in the EU. There are different thresholds for different public sector bodies. For example – for supplies and service, the threshold kicks in when contracts exceed £181,302 but for water, energy, transport and postal service, supply contracts will exceed £363,424 before becoming subject to EU law as well as UK law.

Once a public contract has exceeded the EU thresholds, public authorities then need to decide on a process – is it open, restricted or negotiated? Each choice has implications on how many companies are invited to tender – and how long they have to complete their proposals.

These rules are just the tip of the iceberg – there are many more besides. With squeezed budgets, it is no wonder that many public bodies choose to forgo the red tape – and the time and cost attached  – picking another route. By joining a procurement framework, public sector bodies can enjoy many cost benefits and remain fully compliant.
In a framework, the contract has been pre-negotiated and available suppliers will have already been vetted. This means rather than wait six months negotiating contracts – the flow of business is uninterrupted. Frameworks also allow public bodies the reassurance of being able to pick and choose prices for a certain fixed term. 

These are just some of the reasons Aero works with procurement networks. We have been supplying the Metropolitan Police Service and other emergency services throughout the UK with the first aid products and life-saving devices they require since 2009. We also supply 90% of Scottish councils with the vital products they need through a framework. 

If you’d like to find out more about the procurement process and weigh up whether you might make more savings from using a framework, read our guide, Navigating the Procurement Highway.


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