Published
By CPC Helpdesk
After multiple members of Crescent Purchasing Consortium contacted CPC in the past few months to query what their approach to education sub-contracting should be, Crescent Learning's expert Mark Pearson has shared his sage advice.
In short... education sub-contracting is no different to the award of any services-based contract with a third-party supplier, although our school, (multi-academy) trust and FE college members do have a couple of get-out-of-jail-free cards up their sleeves to be used on such occasions.
Firstly, education sub-contracting falls within CPV (common procurement vocabulary) code 80000000 Education & Training Services. Such services are classed as 'Light Touch' under Procurement Act 2023 and its allied Procurement Regulations 2024.
Secondly, the Schools Exemption relieves non-HE schools, trusts and colleges from compliance with the Procurement Act for below-threshold contracting activities. The threshold value for 'Light Touch' contracts is the higher VAT-inclusive £663,540, so this is the starting point for determining whether your education sub-contracting activity is caught by the Procurement Act or simply needs to be compliant only with your internal Financial Regulations.
So, where do you start?
My advice would be to look at each education sub-contracting agreement in isolation if each sub-contract awarded is for a particular area of curriculum or course content and that each sub-contract differs from the others. Only look at the value of more than one awarded sub-contract if you have several sub-contracts which all relate to the same curriculum area. For each sub-contract, look at the value of spend with your supplier over four years (even if awarding annual 12-month sub-contracts).
If the value of the sub-contract placed with a supplier calculated over a four-year period is below the £663.540 threshold, you only need to consider compliance with your own internal Financial Regulations. So, your Financial Regulations permitting, you can choose to run a closed tender process or even consider establishing a list of Approved or Preferred Suppliers with whom you will competitively tender each such below-threshold requirement. Although not recommended from a 'demonstration of value for money' perspective, you can seek a waiver from your financial regulations to directly award a lower-value education sub-contract if the subject matter is niche and there is a restricted supply market.
If the value of the education sub-contract placed with a supplier calculated over a four-year period is above the £663.540 threshold, then you must comply with Procurement Act 2023, and you cannot seek an internal waiver from such compliance. The Act does not permit the use of Preferred Supplier Lists and has replaced the old Dynamic Purchasing Systems under the 2015 Public Contracts Regulations (DPS) with Dynamic Markets. A Dynamic Market can only be established, if each contract to be awarded from that Dynamic Market are themselves above-threshold). So your route to market choices above-threshold are:
1. Conduct an Open tender process in accordance with the Procurement Act 2023 regulations, awarding to the supplier that submits the Most Advantageous Tender.
2. Establish a Dynamic Market for all above-threshold education sub-contracting requirements (perhaps with individual lots for each specific curriculum area).
3. Establish either a new closed or open framework, covering not only your above-threshold subcontracting requirements, but also including your below-threshold requirements (if you wish).
Don’t forget, there is a range of support information (as well as a wealth of downloadable templates) for members of Crescent Purchasing Consortium on our Crescent Learning platform and that you can contact your CPC Regional Procurement Advisor for further support and guidance if you are still scratching your head after reading this article.
💭 Read on for more from Mark, if the Schools Exemption applies in relation to some new PA23 legislative requirements...