*Taken from the Fleet News eZine, February 2011
Lengthy. Time consuming. Resource intensive.
Those are just a few phrases that sum up the tender process.
For fleets in the public sector, tendering is made even more complex by the need to follow certain procedures.
EU legislation dictates that tenders from the public sector which are valued above a certain threshold (currently £156,442 for goods and services) must be published in the Official Journal of the European Union (OJEU).
The legislation applies to any organisation that receives public money such as local authorities, NHS trusts, central government departments and educational establishments.
Damian James, head of transport provision at Bracknell Forest Council, says that a full tender could potentially take eight to 10 months. Not an appealing prospect for the busy fleet operator.
Bypass the full tender process
Fortunately there is a way for fleet operators to bypass the full tender process.
Fleet operators can turn to framework agreements – essentially pre-tendered contracts – set up by professional buying organisations instead.
“The big advantage of using framework agreement is that there’s no tender process,” says James.
“When tendering, it can be difficult to assess your requirements and predict accurately when you’ll replace over a three- or five-year period whereas the framework can be accessed at any stage.”
James uses framework agreements for vehicles via an organisation called Sector, which is part of Capita.
“I submit the vehicle specification to Sector and they co-ordinate quotes from the suppliers on the framework. I then make the decision and order the vehicles. It avoids the hard work.”
Phil Clifford, fleet and technical manager at St Edmundsbury Borough Council, agrees: “The organisation running the framework has done the arduous admin for you. You can jump straight in and run a mini-competition with the approved suppliers on the framework.”
Quotes can be returned to fleet operators in a matter of weeks rather than months.
“If I did a full tender my day job would be wiped out by procurement,” Clifford says.
Stuart Walker, brand director at Automotive Leasing, LeasePlan’s specialist public sector fleet services provider, suggests the manpower involved in a reasonable sized public sector fleet going through the OJEU process could equate to £30,000-£40,000.
There’s no time saving for the suppliers though.
To become an approved supplier on the framework they have to go through the standard procurement process.
Another benefit fleet operators get from using framework agreements is that the buying group has negotiated standard terms and conditions with the suppliers.
When the fleet operator goes on to order vehicles they then have an individual contract with the supplier which incorporates the standard terms and conditions.
“It’s solid for us,” James says. “We know what we’re signing up to. For instance, early termination is very clear in the terms and conditions. And if there are any disputes I can refer to the framework agreement and Sector can help resolve it. “
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