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Charities - Procurement & Value for Money Consultancy

At Thornton & Lowe, we work with charities who need to follow Public Procurement rules. They often require support with tender procedures and understanding the rules to ensure compliance.

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Charity Procurement Support

Charities: When Do Public Procurement Rules Apply?

In the UK, charities may find themselves subject to public procurement rules in certain circumstances. The determining factor is whether a charity meets the criteria to be classified as a "contracting authority." If classified as such, the charity must comply with the Public Contracts Regulations 2015 (PCR 2015) - soon to be the Procurement Act, when conducting tenders.

A charity may be considered a "contracting authority" if it meets any of the following conditions:

  • Receives Substantial Public Funding - if a charity receives more than 50% of its funding from government, local authorities, or NHS Trusts, it may be deemed a "contracting authority."
  • Performs Public Functions - when a charity is tasked with providing services or functions typically carried out by the government or public sector, it might be classified as a "contracting authority."
  • Government Influence on Trustee Board - if more than half of the charity's trustee board members are appointed by government bodies, it could be considered a "contracting authority."
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Charity procurement

Charities as Contracting Authorities

Charities falling under the definition of "contracting authorities" must ensure compliance with public procurement rules when entering into contracts for goods, services, or construction works above a stated value threshold. This includes conducting a transparent procurement process in accordance with one of the procedures outlined in the PCR 2015 (/ the Procurement Act).

It's important for charities to be aware of their funding sources and the extent of their involvement in public functions or government-appointed governance. Careful consideration of these factors will help charities determine if they are subject to public procurement rules and, if so, ensure they follow the necessary procedures when conducting tenders and awarding contracts.

Being informed and compliant with the regulations will enable charities to navigate the procurement landscape successfully and fulfil their objectives while upholding transparency and fairness in their contracting activities.

Charity Procurement Compliance Support Services

We work with charities who are classed as Contracting Authorities to ensure:

  • Monitor procurement changes and implement updated procedures
  • Procurement compliance
  • Achieve value for money
  • Improve their contracts through supplier management

Key Changes to Procurement Rules for Charity Contracting Authorities?

Valuation of Contracts
Termination of Contracts
Contract Management

When evaluating contracts in your charity, it is crucial to be able to determine their value accurately. Failure to do so may trigger compliance with the Public Contracts Regulations (PCR). To avoid this, buyers should consider the following steps:

  • Conduct Thorough Market Research - research the market thoroughly to understand the prevailing prices and rates for similar contracts. This will help in determining a reasonable value for the contract
  • Seek Expert Advice - if unsure about the valuation of a contract, speak to us ensure accurate determination of its value.
  • Document the Valuation Process - maintain clear documentation of the valuation process, including the data sources, methodologies, and reasoning used to arrive at the contract's value. This documentation will be essential in demonstrating compliance with the PCR

To discuss how you can prepare for the procurement reforms, or if you need support with a project, contact us now.

The new requirement added to the PCR emphasises that contracts cannot be terminated in a way that circumvents the procurement rules under PCR, Parts 2 and 3. To adhere to this provision, buyers in the education sector should consider the following advice:

  • Ensure Transparent Decision-making - when considering contract termination, adhere to the principles of non-discrimination, equal treatment, and transparency. Ensure that the decision-making process is well-documented and justifiable.
  • Comply with Procurement Rules - incorporate compliance with procurement rules as a specific requirement when evaluating contract termination. Ensure that any decisions made align with the principles and requirements set forth in PCR, Parts 2 and 3.
  • Record Keeping and Documentation - maintain comprehensive records of all decisions related to contract termination. These records should reflect the consideration of compliance with procurement rules and serve as evidence of good governance and adherence to legal requirements.

To discuss how you can prepare for the procurement reforms, or if you need support with a project, contact us now.

Effective contract management will gain increasing scrutiny via the Procurement Reform. We have seen this time and time again. An excellent procurement process compliantly sources the best supplier. Lack of resource, expertise and systems post contract award almost ensure the contract does not perform. Supplier and contract management is on the agenda for change and an area we agree need a lot of focus and attention.

By following these comprehensive guidelines, buyers in the education sector, can navigate the complexities of contract valuation and termination while embracing some of increasing flexibility that the reforms are aiming to achieve. This will help in fostering trust, efficiency, and innovation in procurement processes, ultimately benefiting you and the end user.

To discuss how you can prepare for the procurement reforms, or if you need support with a project, contact us now.

Tailored Procurement Solutions for Charities

Ensuring Compliance, Value for Money, and Effective Contract Management

Charities often face unique challenges when it comes to procurement and contract management. With limited resources and a focus on maximising the impact of every pound spent, it's crucial for charities to have access to expert support and guidance. That's where Thornton & Lowe comes in, offering bespoke procurement consultancy and support tailored to the specific needs of charitable organisations.

At Thornton & Lowe, we understand that many charities lack in-house Procurement and Contracts Managers, which can lead to inefficiencies and missed opportunities for savings. Our 'Outsourced Procurement Manager' model is designed to bridge this gap, providing charities with the expertise and capacity they need to ensure procurement and contract compliance, value for money, control, accountability, and effective supplier performance management.

Our team of experienced procurement professionals has a deep understanding of the unique challenges faced by charities, and we work closely with our clients to develop strategies that align with their mission and values. Whether you're a small local charity or a large international organisation, we can provide the support and guidance you need to optimise your procurement processes and achieve your goals.

One of the key services we offer is comprehensive procurement audit services. Our experts will assess your current practices, identify areas for improvement, and develop optimisation strategies that are tailored to your specific needs. This can help you to identify opportunities for savings, streamline your processes, and ensure that you're getting the best value for money from your suppliers.

In addition to audit services, we also offer a Contract Success Programme, which provides an outsourced model for procurement and contract management. This programme includes ongoing support, guidance, compliance, and performance monitoring, ensuring that your contracts are managed effectively and efficiently.

At Thornton & Lowe, we believe that building the capacity and capability of our clients is just as important as providing expert support. That's why we offer training and mentoring programmes designed to enhance the skills and capabilities of your procurement and contract management team. By investing in your people, you can create a sustainable procurement function that will continue to deliver value for years to come.

If you're a charity looking for tailored procurement solutions that ensure compliance, value for money, and effective contract management, Thornton & Lowe is here to help. Contact us today to learn more about how we can support your organisation and help you achieve your procurement goals.

Confused

Would You Like to Discuss Any of the Following?

  • Public Procurement rules and its impact based on your spend and/or funding received?
  • If your Contracts are compliant?
  • Supplier performance issues?
  • How to ensure you are achieving value for money?
  • How to improve Social Value in your supply chain?

Thornton & Lowe can support your Charity or Trust to procure better, ensuring compliance, control and effective risk management.

Hello@thorntonandlowe.com or call us on 01204 238046

Procurement Procurement Rules: Changes

Leaving the EU, updated Procurement Contract Regulations (2015), Procurement Reform Bill and Public Procurement Regulation (2023) and procurement expectations and internal procedures. That is a lot to monitor, embrace and deliver compliantly for a busy third-sector organisation!

The Procurement Act 2023, which received Royal Assent in October 2023, is set to overhaul the public procurement system in England, Wales, and Northern Ireland. Most of its provisions will come into force on 24 February 2025, bringing significant changes for publicly funded charities bidding for public contracts.

Key changes include:

  1. Increased flexibility in procurement procedures, allowing contracting authorities to tailor their approaches, including the new "competitive flexible procedure" for more adaptable tendering processes.
  2. A shift from the "most economically advantageous tender" to the "most advantageous tender," enabling contracting authorities to consider factors beyond price, such as social value and alignment with charitable objectives.
  3. Enhanced transparency requirements, with contracting authorities obliged to publish additional information on a central digital platform throughout the procurement lifecycle.
  4. Greater emphasis on social value, aligning with the government's commitment to awarding contracts based on long-term benefits for society, not just price. The Social Value Model, introduced in 2021, aims to enable VCSEs and SMEs to compete alongside larger organisations.
  5. Improved opportunities for smaller charities, with the Act aiming to open up public procurement to new entrants, such as VCSEs and SMEs, including the possibility of reserving below-threshold procurements for these organisations.
  6. Pre-procurement market engagement, allowing charities to engage with contracting authorities from the pre-procurement stage, enabling suppliers to understand requirements early on and tailor their bids accordingly.
  7. Simplified procedures, making it easier for contracting authorities to choose suitable methods while adhering to minimum requirements, such as advertising competitive contract award processes, publishing contract award notices (CANs), providing assessment summaries to bidders, and observing a 'standstill' period before entering into a public contract.
  8. Supplier performance transparency, emphasising greater visibility of supplier performance throughout the contract's lifecycle.
  9. Prompt payment rules, ensuring that suppliers are paid promptly.

While the increased flexibility, emphasis on social value, and simplified procedures may benefit charities, the enhanced transparency requirements will likely demand more resources. Charities should familiarise themselves with the new legislation, engage with contracting authorities during the pre-procurement stage, and adapt their strategies to maximise their chances of success in the new procurement landscape.

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