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HCR Law Events

11 June 2021

Multi-academy trusts – demystifying public procurement

Combining forces with other academy schools can bring real benefits in terms of sharing expertise and resources. And with mounting pressure on budgets and a firm steer from the government that it considers MATs to be the way forward, familiarity with the public procurement regime (by which contracting authorities go to market to acquire goods and services) is likely to become more important than ever. Here we look at the key issues any academy currently within a MAT or contemplating such a move needs to understand.

 

What rules apply?

Reliance on funding from the Education Funding Agency means that a MAT (as opposed to the individual schools within it) is a ‘contracting authority’ for the purposes of public procurement where it is looking to acquire goods/services on behalf of the MAT. So, the starting point is that the relevant regulations (being the Public Contract Regulations 2015) are going to apply. The impact this has will depend on the value of the goods/services which are sought.

In high level terms, the threshold which applies to contracts for goods and services is £189,330 for goods or services. Contracts for works are subject to a higher threshold, currently £4,733,252.

Certain education services may fall within the ‘Light Touch Regime’ which has a different threshold and follows slightly different rules.

Valuing the contract for these purposes can be complex, and seeking advice where you look to be close to the applicable threshold (or perhaps where it isn’t entirely clear which threshold applies) is always a good idea. In particular, bear in mind that the threshold applies to the contract provision as a whole – i.e. across the whole of the MAT estate and taking into account the lifetime value of the contract.

If the contract is a low/medium value (often determined by the MAT’s procurement policy), the process can be far simpler. Often it is enough to invite quotes from three suppliers, assess them against set award criteria and then select the supplier which offers the best value.

 

Why does it matter?

If the regulations apply, any failure to follow them can leave the process or the end award of the contract open to challenge. That just might mean having to re-run part or all of the bid process, abandoning the contract award or potentially having a contract award set aside. There is also the risk of financial penalty or a claim for damages by an unsuccessful bidder. Plus legal expenditure of course.

In addition to the above, there are wider issues around compliance with obligations by school governors etc which should be borne in mind.

There are of course also more tangible rewards to be gained from a properly tendered contract, in terms of costs savings (economies of scale) and strong, longer-term relationships with suppliers.

 

Where to begin?

  • Check the contract value and, where applicable, the appropriate threshold.
  • Understand the nature of the contract opportunity being offered. Is it, for instance, a call-off contract or a mini competition under a framework agreement?
  • Advertise the opportunity as required (i.e. Find a Tender/Contract Finder if applicable) – the slight change in advertising requirements is the only substantive impact of Brexit at this stage.
  • Check your documentation – in particular, look at timetables (including provision for questions from suppliers and any standstill period which must take place before any contract award can be made) specifications and award criteria. Clarity and consistency are vital. Ascertain whether any social value criteria can be applied and, if so, how those should be reflected.
  • Once the pieces are in place, follow your rules to the letter as far as possible. If issues arise, react promptly and seek advice if necessary.
  • Don’t overlook the need to deal with current provision in place. If there is an existing contract in place, look carefully at how that contract should be terminated to avoid legal proceedings further down the line. Again, if in doubt, seek advice.

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About the Author
Clare Murphy, Partner

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