Chief executive of the Crown Commercial Service (CCS) Sally Collier has announced the government is moving away from the use of framework agreements.
Collier said there had been a 40 per cent cut in the number of framework agreements as the CCS moved to “new contracting models”.
Speaking at a CIPS central London branch meeting this week, she said: “We are actively reducing the number of frameworks we let.”
Collier said the primary new model was “direct contracting”, where deals of a specified cash value are struck with individual suppliers, as opposed to a framework where a maximum price but no values are agreed.
She referred to a new set of four contracts that have been awarded to travel companies, instead of a framework agreement, to provide services to the government. These – which have been awarded to four suppliers; Redfern Travel, Calder Conferences, HRG and Clarity Travel Management – are expected to save more than £50 million.
Collier said frameworks had “got a bit of a bad name”, but “where they’re really good and actively managed, they’re great”. She also said she supported the use of “dynamic purchasing systems”, which are similar to electronic frameworks but differ in that suppliers can join at any time and their processes must be completely electronic.
Referring to the upcoming spending review, Collier said achieving savings “isn’t going to get easier”. “To generate those savings I have been engaged in the last year with transforming the organisation [CCS] into a customer service organisation,” she said. “We could leverage more savings if people aggregated their demand.”
Collier said they were focusing on demand management and supplier innovation. “There’s not a lot of savings in the price. It’s all in innovation and demand management,” she said.
She said a central government target to spend a third with SMEs would “require a very significant shift”.
In terms of taking more spend into the CCS, Collier said there was a “grey area” between central and regional purchasing. “There is still scope to centralise common goods and services,” she said. “Where I want to stop is in a grey area. I don’t want to be centralising things that it doesn’t make sense to centralise and where it’s better to have a regional strategy.”