The Pro5 organisations are:
- Central Buying Consortium (CBC)
- Eastern Shires Purchasing Organisation (ESPO)
- North Eastern Purchasing Organisation (NEPO)
- West Mercia Supplies (WMS)
- Yorkshire Purchasing Organisation (YPO)
Roy Walker, category manager fleet at YPO and project manager fleet at Pro5 advises fleet operators to approach the Pro5 organisation in their area to access the framework agreements.
In theory, buying groups and framework agreements should deliver savings for fleet operators.
Combining the buying power of seven central government fleets in Buying Solutions’ first e-auction for vehicles, held in August 2010, delivered significant savings.
The e-auction was held using suppliers from Buying Solutions’ vehicle purchase framework agreement.
A saving of just over £900,000 against a pre-auction value of £3,061,210 (equivalent to around 30%) was achieved against an already competitive framework agreement pricing.
Cost savings
James is confident that using Sector for his procurement brings savings.
“I agree with the principal of frameworks; I definitely get a better price than if I did negotiations myself. I only have 60 vehicles so I’m not a big fish in fleet terms.”
However, James has discovered that different frameworks offer different rates for vehicles.
“I benchmarked 32 vehicles over about a year using two different frameworks.
"One framework was more cost effective. Of the 32 vehicles, I went on to order six and I estimate that it saved me £15,500 over a three- to five-year period.”
But Clifford points out that benchmarking can be time consuming, which in some respects defeats the objective of using a framework agreement.
Another issue James has encountered is differences in administration.
“It’s not just the prices, it’s about how you get the information and how quickly.
"I found that one framework was quicker at turning around quotes.
"I would get the quotes back in a week, summarised in a spreadsheet so it was easy for me to compare them. With the other I received quote sheets from the companies so I had to sort through them and put them into a spreadsheet myself.”
The other factor to bear in mind when using frameworks is that when an approved supplier on the framework wins a contract from a fleet operator they have to pay a small handling fee to the buying group.
“Buying Solutions is a commercial organisation; it’s not publicly funded,” Walker explains.
“We pay a percentage rebate to Buying Solutions for any business that goes through the framework. When we submit our pricing we incorporate the price of the rebate so, in effect, the fleet operator pays.”
Using framework agreements also restricts fleet operators to the suppliers on them.
“Previously a central government fleet might have been able to go out to 15 or 20 organisations but now they can only go those on the framework,” Thornton says.
There’s also the potential that a relationship with a long standing supplier may be severed if they are not one of the suppliers on the framework.
More on page four
Sarah Tooze is a former managing editor of sister title Smart Transport. Prior to joining Smart Transport she worked on Fleet News for more than 10 years, latterly as deputy editor, and won the ‘automotive business journalist’ award in the 2017 Newspress Awards.
Vision - 15/08/2012 22:46
This is not news as it has been in place for a few years, simply most public sector departments have not used it because they did not know about it. It would be more interesteing if public sector fleets joined together by region and then procured and shared whilst making real savings.