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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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Helping Charities understand if Public Procurement Rules apply to them

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) 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."

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.

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
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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.

Public Procurement Regulations 2023 – Charity Implications

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!

We are providing updates via our blog on the changes and likely future changes to procurement rules. For example, Public Procurement Bill 2023 April 2023 update, which can be found here.

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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.

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