29 July 2014 | Paul Tomany
There are some practices that still remain in public sector procurement consortia that really betray a lack of business nous and common sense.
One of them is what I’d describe as the use of ‘let and leave’ contracts. The idea that if you put a contract out there people will simply use it. More often than not, they don’t.
When my own organisation became a not-for-profit company back in 2000 we looked for ways to move away from being a higher education purchasing club to become something far more efficient and commercially focused.
This became the starting point for using pre-commitment to ensure buy-in from consortium members – 22 higher education universities and colleges – across a wide range of frameworks. As a result, take up of spend through our pre-committed contracts is on average the highest in the higher education sector.
It’s an approach more public sector organisations should follow.
When we are asked by our members and/or identify an opportunity to undertake new contracts we send out a pre-commitment form to category specialists and heads of purchasing at each institution asking them a few key questions. Things like how much they are expecting to spend through the contract, which suppliers they tend to use and whether they have any specific requirements for their institution.
By following this method we are then able to give suppliers the kind of information that both gives them confidence in the contract and a better chance of providing members with exactly what they want. So although on the face of it we are producing a one-size-fits-all contract, in reality it is tailored to each university’s requirements.
The key to securing pre-commitment is engagement with senior staff. Sit down with finance directors and heads of procurement, talk through the rationale behind pre-commitment and the ways in which it can create a virtuous circle between buyers and suppliers.
It’s important to stress that there should be an expectation that members will commit, unless there is a good reason why they shouldn’t. For example, I wouldn’t expect the Royal Northern College of Music to sign up to the laboratory supplies contract! In the case of my own organisation, of the members who can commit, about 90 per cent do so.
☛ Paul Tomany is managing director at North Western Universities Purchasing Consortium (NWUPC)