Thread by @antlerboy

OK - everyone should calm down.
This isn't a government intention to spend £70bn on an unknown consultancy.
But this is a slightly different type of scandal.
It's a Framework Agreement - a legitimate way of setting up easier purchasing through a pre-qualified and legal contract.

https://twitter.com/BestForBritain/status/1554167326953570304

But this is an example of an evolution of Framework Contracts far beyond their original intent.
I'll explain. Over the years, government procures billions of pounds work of work from thousands of different suppliers. At some point, someone says 'wait'....

...we're going through a full legal procurement every single time. So each time we buy is competed on quality and cost, but it's *incredibly expensive* to manage.
Why don't we do one contract, pre-qualify a bunch of good providers and then call off from them for future needs?

That's a framework contract - whether for copier paper or civil engineering consultancy, you go to the market and do one big evaluation, then for a few years, any public body you named in the original procurement can buy from those suppliers at the contracted prices.

Central government runs them itself, for a huge range of goods and services. And so do procurement consortia, set up for the express purpose of this kind of good-value, legally compliant procurement.
My company @RedQuadrant is on many such: redquadrant.com/framworks

Sometimes you go a bit further.
When buying any type of complex service, the requirements change each time. So it's not like copier paper - you might want to still have pre-qualified companies compete to offer the best solution.

Now, instead of a catalogue, you have a framework where you can call off 'mini competitions' - the pre-qualified companies get a spec, and bid against it.

So like a full procurement, fewer people can bid, a streamlined process. Day rates for consultants (for example) are typically fixed by 'grade' - depth of experience (measured in years), expertise, etc.

Then, people started getting cute with it. In my space, consultancy, it probably started with high-volume 'recruitment consultants' - the firms who word-search CVs and send you people to fill gaps; temp agencies (of varying quality and expertise, some are great, not all).

They can be judged, price-wise, by their 'mark-up' - the percentage they add to the daily charge for people they place.
Some clever agencies approached councils and said 'give us exclusive right to all interims and temps for a few years, we'll give you an amazing price'

So, the councils go to the market (here, it's very competitive), and appoint a single agency for a few years. Amazingly low markup (and guess what? Often they end up run by cheap admin people and not providing top service)...

At the same time, in recruitment and consultancy, some people started offering this as a 'Managed Service'. The pitch is 'we'll be the front end, you have a single point of content, we manage quality, and price. But we're open to the whole market!'

Civil Service Learning is even run this way - one provider and as many sub-providers as they like, one exclusive route for training (IMO it's not a good system). But it's competitive, in the sense that a few big companies fight tooth and nail when the contract comes up.

And sometimes part of this is that the fixed prices on the framework are too much of a constraint on complex services. So perhaps competition in certain sub-contracts is allowed on price as well.

But because the formal legal (currently OJEU procurement) has happened with the letting of the main contract, any further competitions are not full legal procurements - they are handled within the framework contract agreement only.

So, now we have:
- exclusivity for a period of years (the nature of frameworks)
- not a range of providers competing but one provider
- not providing themselves, but 'managing' engagement with a market
- potentially huge flexibility of offer and price (within the contract)

Hmm... so we have one big legal, open-to-scrutiny competition, then a lot of stuff going on which isn't a formal OJEU procurement any more, it's one company acting within the bounds of it's government contract making agreements with many others... room for rent-seeking?

Well, many of these frameworks - for consultancy etc - work very well, in our experience. There's due process, and the framework itself is well competed.
But.

What we have seen in recent years is two changes:
- a rise in 'sole provider frameworks' - i.e. instead of there being built-in competition between companies, there's only one company awarded as the 'front end'

- a HUUUGE rise in obscure public sector organisations ('institutional clutter') mysteriously awarding these 'sole provider frameworks' which we haven't even seen the procurement advert for...
(And my company, I'm told, is among the top ten subscribers to UK tender alerts)

and these frameworks are open to all public sector organisations and charities, and for spend up to billions and billions, as seen here.
Why?

It's a sweetheart deal. Because one public sector body can legally procure a framework which any other body can buy from, if they create a successful framework... they get a kickback.
The framework provider keeps a percentage of the work done, and shares it with the awarding body

To be clear, for the work awarded through such a sole supplier framework, a public sector buyer pays the supplier, and the vast majority of that spend goes directly to a provider. How much is governed by the rules of the contract that was let.

But there's very little scrutiny or public right to information about what happens below the initial contract let, and I've heard tell of this kind of framework in construction where the supplier charges companies to be on the framework (which I think is illegal).

So what happens then is:
- obscure public body advertises a weird sole supplier framework
- only one company sees it, and bids - amazing really, cos they suggested it in the first place

- that company can then go to ANY public sector body and say 'you don't need to do a new legal procurement, you can just buy conveniently through my framework!'
- for any purchase made, the supplier and the letting company get a percentage.

What's OK about this recursive reductio ad absurdum of procurement law is:
- there's no obligation on any public sector buyer to *use* this framework (so the £70bn is just 'so this contract remains legal, what's the conceptual maximum anyone could spend through it?)

- it's legitimate for the supplier to take a cut - they have to administer things, find suppliers, pass on the monies (of course, they can sit on that for a bit as it passes through), advertise and get buyers

What's dodgy about this is:
- was the original competition actually visible to the market or a stitch-up?
- are the sub-procurements under the framework being done legitimately? Who decides which suppliers even see each opportunity? Who decides which supplier wins?

There are two levels of question here:
1- are the actual contract awards still sticking to the sole supplier framework contact that was originally let? (open to public scrutiny, to the extent anything commercial is)

2- would they meet the normal tests of good, fair, competitive procurement?
(Not open to scrutiny and not even in question, really, since only the letting and operation of the main contract falls under procurement law)

It's a sticky mess, which the government commercial people are well aware of - but there's nothing they can do at present and new proposed legislation won't truly change this.

What *could* be done is informal action to clamp down on obscure organisations letting single-supplier frameworks that are valid across the whole public sector, and receive only one bid. I wonder how many bids there were for this framework?

Sorry this was so long and obscure, it is complex but I've not had a coffee yet...

^its
Darnit

Argh. I missed a fairly critical bit (dog woke me at 4:45am, so saw this after walk...)
For any public sector organisation to *choose* to buy from a framework like this, while it is (I am sure) OJEU compliant and has met *procurement law*, the organisation's own 'Standing Orders'

...i.e. the controls it exercises internally.... should *still* apply.
Anyone buying from such a framework might apply for exemption (or assume it was ok), but if the organisation has rules like, say, anything over £15k has to go to three bidders - that should still apply.

I'm told there was one bid.
I can't really blame the people behind this (if it played out as I think it might have), they're being clever and I believe 100% legal in business.
And there's a clear market need and the work is valuable.
And maybe they just happened to see the tender

dammit: redquadrant.com/frameworks

Obviously not OJEU any more, but the direct equivalent. I'm still living in denial...

Twitter says this tweet was deleted by the Tweet author'?!
I think it's still getting (>43k) views.
Was just coming here to share my Soundcloud!
Or, in this case, RedQuadant public service transformation consultancy - available through many frameworks ;-)
redquadrant.com/frameworks