BESA BEST PRACTICE PROCUREMENT ADVICE

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1 BESA BEST PRACTICE PROCUREMENT ADVICE For more information go to

2 Introduction Schools just used to go out and buy stuff! Indeed before the 1988 Education Reform Act and local management of schools, the budgets to which they had access were small and average order values generally tiny. We are in a different environment today with schools responsible for their complete budgets which are invariably in the millions per year category. Of course we are talking about spending public money and that needs to be done appropriately. However, procurement processes can seem daunting and this guide is designed to allay some fears and put some issues into perspective. Amidst all the regulation surrounding higher value procurement, the message that must never be lost is that, when purchasing products to be used in the actual teaching process, what should be purchased is what will assist the most effective learning. Such decisions should be made by professional teachers, though certainly with enough experience and training to be informed purchasers. A regular moan from

3 schools about the procurement advice on the DfE website is that it loves to make every purchase sound like buying a commodity where the cheapest is automatically the best, a far cry from the notice that hung for years in one of the Department s offices in the 80s which boldly stated: The bitterness of poor quality lingers long after the sweetness of low price. From the same era comes the story of the powder paint purchased cheaply by some local authorities for schools where the quality of the paint pigments was so poor that the mixing of basic colours did not produce the proper resulting colour; a wonderful way for primary children to develop confidence in what their teachers tell them. More recently, local authorities have been effective aggregators of many purchases, particularly curriculum software that was needed by all schools and where the benefits of bulk buying in reducing the suppliers costs meant very keen pricing was possible. That local authorities no longer perform such functions has meant that suppliers have had to

4 change their channels to market and bear the costs of trying to sell to schools individually. That does mean that at present we are in a period of transition from which we are likely to emerge with a range of different aggregator organisations. The DfE advice also tends to present the view that one should avoid buying from a manufacturer. Interestingly, the education sector, more than any other, has large numbers of supply companies that were started and are still owned and run by former teachers who came out of education with an idea for a better way to teach their subject and they developed equipment and teaching aids accordingly. Such companies are very firmly entrenched in the philosophy of trying to deliver what is best for education. It doesn t mean that they are no profit motivated, but it does imply that they will be interested in schools getting good value from them. Many such companies are members of the British Educational Suppliers Association (BESA) which looks after more than three hundred companies in the

5 sector. Every year BESA members must sign up to abide by the BESA Code of Practice which effectively says that purchasers will be satisfied with what they get from BESA members, and if they aren t and have sought to resolve the issue with the supplier, they have recourse to BESA. So common-sense has not been lost from the system and what schools need to focus on is more to do with the various higher levels of expenditure which trigger suggested and ultimately mandatory processes before a purchase may be made. What follows is a step by step procurement guide for higher value purchases which has been designed by the British Educational Suppliers Association (BESA), your sector s trade association, to help you make the right decision and be fully aware of the opportunities and potential pitfalls. Working between the government and our member suppliers, we are on hand to help to steer your school on the right path to successful and economically wise procurement.

6 Step 1: Defining the scope of a procurement Before considering any investment, schools should carry out a pre-purchasing review to scope the need, specification and evaluation process. In terms of the need, ensure you are not being sold add-on features that are nice to have, but really not necessary for your specific requirement. Be sure to compare like for like; are the terms of the warranty exactly the same? Once this has been done quotations can be collected. Step 2: Value for money? The next consideration before procurement is not about the cost but the value. The Total Cost of Ownership (TCO) looks at the complete cost including the initial purchase price, performance, fit for purpose, warranty/service and support, maintenance, expected life of the product and even disposal.

7 Step 3: Supplier Included in the TCO calculation should be the company providing the product. Are they financially stable? Have you bought from them before? Have they been recommended? If you are paying by invoice after delivery you may not feel this is an important consideration, but problems may arise if the product is faulty. To be approved as a BESA member, all companies have to disclose account information from the previous two years showing that they have good financial foundations and are therefore less likely to disappear, leaving products unsupported. Step 4: Tenders The next consideration prior to procurement in the public sector is whether the requirement must be put out to tender. The threshold values can be found on the

8 Cabinet Office website, but generally only apply to product values over several hundred thousand pounds. Step 5: Strength in numbers Historically the Education Action Zones, local authorities and purchasing consortia have achieved economies of scale by bulk buying for a number of schools. While the current government directive has been established with an appreciation that each school has its own specific needs, paper, pens, and even interactive whiteboards may be used by several schools and therefore collaborative purchasing, can achieve considerable cost savings. Step 6: Product impact on education standards Buying products from experienced education sector suppliers should ensure that the product has been designed to fit the purpose for which it was designed. The origin of many BESA members as mentioned above is an important security here.

9 Step 7: Training and support The success of a product can often be based on the level of support provided. Some suppliers may define training as a ten minute demonstration of how to turn it on and off, while others will offer a full day of indepth tuition. High quality training can be vital for the effectiveness of the product in the learning environment. Before purchase, always ask the supplier to provide a detailed outline of the level of training and support provided. Step 8: Leasing Schools can achieve substantial savings from leasing, but the recent case of mis-selling by a leasing company has turned many schools away from this path to budget management. BESA is currently working with our members and the Government to ensure the contracts are straight forward, transparent, and cannot be altered by a finance company at any time during the term of the lease. This will ensure schools can secure better value leasing contracts, which are more relevant to their

10 educational needs and in turn achieve significant savings. Make sure you read and fully understand the small print before signing any leasing deal or work with a BESA member who offers this service. Step 9: Contract reviews However good the relationship with your supplier we strongly recommend agreeing an annual review of their prices and service level agreements. Avoid signing unnecessary contracts that tie you into sticking with the same price agreement from the same supplier, to give yourself the power to compare their service with other suppliers on an annual basis. Step 10: Checklist. To ensure you haven t forgotten any of these vital steps to best practice procurement we ve put together this handy checklist:

11 Best practice procurement check list yes no 1 Have you carried out a pre purchase review? 2 Have you calculated the total cost of ownership? 3 Does the supplier offer the stability required 4 Does your requirement need to be put out for tender? 5 Can you achieve savings by buying with other schools? 6 Is the product designed to achieve the required learning outcomes? 7 Is a high level of training and support included? 8 Considering leasing? Have you checked the small print? 9 Have you built in an annual contract review And finally, please remember, if an offer appears to be too good to be true, it probably is!