Pioneering Ethical Procurement: Future-proofing frameworks for the next decade

With the Construction Playbook, “Gold Standard” and the new Procurement Bill setting out the roadmap for public sector procurement in the future, we’re at a pivotal point for frameworks.

After ten years of making frameworks the preferred route to market, providers must now consider how things will continue to develop in the next decade – and how to protect the solid reputation that has been built up by upholding standards and accountability across the whole sector. This includes how we leverage best practice, collaboration and new technologies to maximise the benefits frameworks deliver for clients, suppliers, and the communities they serve.
With the Construction Playbook, “Gold Standard” and the new Procurement Bill setting out the roadmap for public sector procurement in the future, we’re at a pivotal point for frameworks.

After ten years of making frameworks the preferred route to market, providers must now consider how things will continue to develop in the next decade – and how to protect the solid reputation that has been built up by upholding standards and accountability across the whole sector. This includes how we leverage best practice, collaboration and new technologies to maximise the benefits frameworks deliver for clients, suppliers, and the communities they serve. As the use of frameworks continues to grow, so does the risk of opportunists entering the market without the same compliance rigour that providers like ourselves, CCS, Scape, and Bloom put in place to make frameworks so widely adopted in the first place. This risks not only harming clients and suppliers, but also causing irreparable damage to the integrity of frameworks as a whole.

As leaders in the market, our role must include protecting the integrity of frameworks. At Pagabo, we do this through pioneering ethical procurement. It’s at the heart of everything we do, and we’re paving the way to create the path with other reputable framework providers that maintains the positive reputation of frameworks – and protects them into the future.

We believe there are key principles that must be followed when establishing and managing public sector frameworks – and we have a responsibility to the public sector to hold other framework providers to account where standards are not met.

Driving best practice and legal compliance

The first critical point is that organisations establishing frameworks must comply with PCR2015 regulations and be able to provide both clients and suppliers with guidance around best practice.

That’s why it is so important for providers to invest in an experienced and qualified team, making sure they are not only producing compliant frameworks, but can offer an effective ongoing service to clients and suppliers alike.

Procurement organisations should be able to demonstrate not just that they have accredited professionals, but also that they have the necessary evaluation resources, along with the skills needed to operate the framework over its entire lifespan. For example, a multi-lot framework may require the appointment of hundreds of suppliers – a significant management task that the provider simply has to have the ability to deliver effectively.

To make sure we offer this to our suppliers and clients, at Pagabo we have invested in an unrivalled team of MCIPS and NEC PMA qualified people. This means we are in a position to offer real support and added value at every stage of the procurement process.

Being fair and transparent to all parties

Frameworks play a critical role in helping manage both supply and demand, so careful curation and management is vital. The guiding principles are fairness and transparency – one-sided agreements do not serve to help clients or suppliers, nor the communities in which schemes will be delivered.

Frameworks do not dictate – they are developed to satisfy market needs. A framework that is not utilised is usually down to it either not meeting what the market needs, or duplicating other more commonly used, existing procurement routes with which it cannot compete.

For suppliers, being appointed to a framework provides a compliant route to securing work, but it does not give guarantee of pipeline. If a framework is developed and launched without being based on an identified need, it can end up being a big resource drain for the suppliers that put time, money and effort into bidding for it. In turn, this could have the effect of eroding trust in frameworks generally, and make suppliers divert resources into other less efficient procurement routes.

So, ensuring frameworks meet the market requirements of both clients and suppliers is critical to success – and relies on extensive market engagement. All of our frameworks go through extensive market testing and analysis in the early stages of development to make sure we know that we’re developing frameworks that provide a solution to an identified market need.

This includes a two-stage approach, engaging with both clients and organisations from key areas of the market relevant to the framework being developed, helping us to shape what the lot structure, region breakdowns, and terms and conditions may look like. This is all carried out and analysed bespoke to every potential offering before embarking on further development.

Our own engagement with the market has positioned us to make things in the sector better, such as our introduction of the reserves list. This is now embedded in our ethical procurement approach, with clients able to access core and reserve suppliers, ensuring they are always able to access the best expertise for the job. We were also the first framework provider to introduce the direct award process, helping to speed up processes where needed, without compromising on the core fairness and transparency principles of ethical procurement.

Frameworks are supposed to encourage transparency – that is set in law. However, our experienced view has seen that not every procurement notice or Invitation to Tender (ITT) document in the framework space is fully compliant. This is worrying, because for a framework offering, compliance and transparency is paramount.

Clarity is needed to ensure fair competition. For example, how will awards be made? How will evaluations be handled to ensure bidders of all sizes have the essential information to determine how the award will be managed – and have a clear process to ask questions? And how will the allocation of SMEs be fairly judged?

The ability to provide this clarity on evaluation processes – as well as to actually deliver it – is incredibly important for providing clients with an additional level of governance. Our processes are as transparent as possible, making sure that we also add in ‘above-and-beyond’ elements to the evaluation process, which in turn sets the standard for feedback throughout the lifespan of a framework for successful suppliers.

Delivering value for money

The transparency matters continue into the financial side of things – existing to make sure the framework delivers real value for money.

This includes being clear on any required commitments. Suppliers should be incredibly wary of any organisation seeking fees for the entire lifespan of the framework – typically four years – upfront with no recourse. Expecting this level of upfront payment is an exceptionally bad practice that we are shockingly still seeing happen in places.

Incentives and motives are frequently included in frameworks that measure performance, such as KPIs. However, if those being offer are punitive and one-sided in the framework provider’s benefit, this is not fair in contract terms, nor is it compliant to the Construction Playbook’s principles – or to procurement law either.

For pricing to be submitted, clients should have the ability to understand embedded costs. To put in basic terms, if a client can’t understand how a framework is costed and financed, it should be wary about using it – and if this cannot be clarified or shown as fair, the framework should not be used.

Of course, delivering value goes further – as do we. As a framework provider, we have a unique position in being able to ‘give back’ to the wider industry and communities to make a real difference. From how we root all activity in social value to how we model our rebates to provide funding for key causes like improving energy efficiency of schools or supplementing free school meal vouchers, we examine the importance of this in this recent article.

Frameworks are an incredibly powerful tool for the public sector’s use that we simple have to future-proof to make sure it can procure what it needs at speed, with compliance, fairness, ease, and value. If those of us upholding the principles of ethical procurement do not hold others in the space accountable to the highest standards, the reputation of frameworks will come crashing down.

Click below to read more about how we’re pioneering ethical procurement and our six-point plan for accountability:

Pioneering Ethical Procurement