Postal purchasing options to deliver savings

The Crown Commercial Service Postal Goods and Services framework agreement provides access to public sector bodies across a range of roles for the provision of postal goods. Government Business looks at the agreement and the latest news regarding the government’s procurement department.

The Crown Commercial Service (CCS) is in place to make sure that small and medium‑sized enterprises (SMEs) have access to government contract opportunities, making it easier for them to do business with government, and making sure that 25 per cent of government’s spend, either directly or in supply chains, goes to SMEs by 2015.

Additionally, CCS makes sure that departments publish details of future projects and contracts on the Contracts Finder website every six months, giving businesses the confidence and time to invest in relevant skills, labour and capabilities to win these contracts. It works to obtain simpler, more flexible EU procurement rules in Brussels to support economic growth by making the procurement process faster, less costly and more effective for both business and procurers; this will affect more than £45 billion of central government spend (more than £230 billion for the UK public sector) every year.

This will help commissioners of public services to become more effective through the Commissioning Academy and use commercial intelligence more effectively to improve the value gained from contracts across government.

Terms and Conditions
As a guide for suppliers and buyers there is a standard set of terms and conditions for framework agreements and call-off contracts for goods and services bought under the agreement. The template for call-off contracts forms the basis of the terms and conditions in individual further competitions and can be supplemented or refined with additional terms to suit the requirement.

All CCS suppliers must submit monthly management information (MI) returns. This is done online through the MISO system. You will need to include the unique reference number (URN) for each customer listed on the return. Failure to submit MI returns correctly or within the agreed timescales may incur admin fees.

The CCS is updating its internal Customer Relationship Management system and as a result the weekly downloadable list of URNs will be changing. The existing sheet of four tabs will reduce to three, listing all live URNs with customer details, a second detailing merges and a third detailing name changes. Legacy tabs will be added for the time being showing older changes that are not present on the new system. The sub-sector is now known as organisation type and is being updated to better and more accurately describe the organisation within its sector.

Postal procurement overview
The three procurement organisations are referred to through out the guidance documents as the ‘Category Team’. Two significant steps within the procurement process were the Category Team’s engagement with both the market and the stakeholder group.

Both forums were paramount to the overall success of ensuring a positive outcome i.e. the Contracting Bodies needs are reflected vs. awarding a place on the Framework to capable and proficient providers. The Postal Stakeholder Group featured representatives across the wider public sector and central government departments.

The procurement was conducted via the Open tendering procedure. The evaluation involved two stages referred to as the ‘Selection Stage’ and the ‘Award Stage’. Potential Providers who satisfied the Selection Stage were then taken forward to the Award Stage of the evaluation process. The Selection Stage consisted of assessment in five sections. This included: background questions; grounds for rejection; terms of participation and compliance; framework specifics; and previous experience and comparable contracts.

The Framework suppliers were required to demonstrate that they could competently fulfil the quality criteria which covered: operational requirements; environmental properties; and technical proficiency. The Framework Suppliers were required to provide best prices as part of their bid. The prices under each of the Lots are the maximum payable. This means that at Further Competition a Contracting Body can expect to pay equal or less than the maximum price.

Established in November 2012, the Postal Goods and Services agreement has a term of three years, with a possible further one year extension subject to the satisfactory performance of the suppliers. A further competition or direct award call-off agreement can be put in place for up to two years beyond the expiry of the agreement, effectively meaning that a contract can run until 16 February 2020 or 2021 dependent on whether CCS implements the option to extend the agreement.

The agreement offers a true collaborative procurement process conducted by CCS, YPO and ESPO, who all replaced their previous agreements. The main objective was to let a new agreement and capture new technological advances offered by the market to meet the needs of the public sector.

The benefits allow full market engagement and testing across the supply market and will serve as a one-stop-shop for all postal goods and services.

This is deployed by the public sector, for the public sector. CCS will make available an assistive toolkit and easy to follow user guidance on how to access the agreement, the services and the available goods. Sound contractual safeguards are in place as a result of pre‑determined terms and conditions, and competitive rates and discounts are available.

The Lots
The Postal Goods and Services agreement can be used across seven lots.

Lot 1: Collection and Delivery. Lot 1 covers the collection and delivery of physical mail items of up to 2kg for public sector customers throughout the whole of the United Kingdom. Services under lot 1 include but are not limited to: bulk mail; standard mailings; sorted and unsorted mail; unaddressed mail; secured mail; undelivered mail; and some bespoke requirements as defined by the contracting body within the mail profile.

Lot 2: Hybrid Mail On-Site Solution. Lot 2 covers the provision of a hybrid mail solution that is within the contracting body’s premises and utilises the existing equipment that is owned or leased by the contracting body together with supporting software provided by the successful supplier.

Lot 3: Hybrid Mail Off-Site Solution. Lot 3 offers a hybrid mail solution that is wholly external. Lot 3 suppliers will receive work electronically and will be responsible for the printing, addressing, enveloping and delivery (physical or electronic) of mail items. Suppliers will offer a range of electronic and physical delivery options, such as SMS or email and will provide supporting software where necessary.

Lot 4: International Mail Services. Lot 4 covers the provision of international mail services, including the collection of mail items from public sector customers from all areas of the United Kingdom for delivery to recipients around the globe. Services include but are not limited to: bulk international mail; standard international mail; sorted and unsorted mail; secured international mail; undelivered mail; and some bespoke requirements as defined by the contracting body.

Lot 5: Franking Machines and Mail Room Equipment. Lot 5 covers the provision of franking machines and mailroom equipment (including associated services and consumables) either for lease or purchase to public sector organisations in the UK. Products included within the scope of this lot are: new and remanufactured franking machines; folder inserters; letter openers and address systems.

Lot 6: On-Site Inbound Mail Solution. Lot 6 is designed for contracting bodies who have a requirement for mail items to be delivered to their premises. Suppliers will offer services including timed delivery, pre‑sorted delivery, numbered box services, post opening, mail screening and tracked/signed for services. Suppliers will also offer the capability to digitalise inbound mail using the contracting body’s existing equipment and to provide a supporting software package.

Lot 7: Off-Site Digital Inbound Mail Solution. Lot 7 provides services relating to digitalisation of mail items sent to the contracting body. Services include but are not limited to: opening, scanning and electronic distribution of mail; archiving, destruction and indexing services; mail screening; cherished or valuable document handling; and some bespoke services to be defined by the contracting body.

The value for money challenge
In 2013 when a consortium collaborative group of London Boroughs, led by the London Borough of Camden, looked for a supplier who could meet their requirements for collection and delivery of their mailings they wanted to be sure that they would be getting the best possible value for money.

Competitive pricing was essential but they also wanted a supplier who provided: a high quality service on a consistent and reliable basis; the flexibility and scale to be able to handle variations in volumes; a set of services which met the requirements of different mailing applications for speed, economy, visibility and security; support and advice to help each authority improve efficiency and take advantage of innovation over the life time of the contract; confidence that they would operate in way that met all social value criteria and were committed to developing their role in the community.

Through a compliant further competition under the CCS Postal Services agreement (RM782) Royal Mail was awarded an agreement to supply the London Boroughs postal collection and delivery services. Each individual borough signed up to the agreed Call Off Terms and Conditions to take advantage of the value for money offering provided by Royal Mail.

Royal mail savings
In an era of ever increasing focus on digital delivery, local authorities across the UK still rely heavily on postal services to deliver services and vital information to their communities. Increasingly they are finding that far from being an outdated medium mail is complimentary to the digital by default strategy and can be a highly cost-effective way of achieving required service outcomes and connecting with difficult to reach groups. These factors apply just as much, if not more, in London and postal services will continue to be an important area of expenditure for the London Boroughs for the foreseeable future.

As part of the implementation of the services, Royal Mail has provided Account Management and Technical Field Service support to ensure that authorities are accessing the most appropriate and cost efficient services. This support, backed up by a dedicated customer service helpline, contract manager and, where required, specialist consultants has then been maintained through the agreements life. Regular management information reports are supplied to help London Boroughs understand what they are
spending and saving on postal services and the level of service and support they are receiving from Royal Mail.

Progress and performance is shared, and a partnership style of relationship has developed, through well-attended quarterly review meetings which are open to all London Boroughs and are also used to review future strategies for mailing activity, developments within the market, and opportunities for innovation.

Now in its second year, the relationship with Royal Mail has already secured significant benefits for the London Boroughs. In addition to benefiting from the quality of Royal Mail’s services, and high performance against contracted KPIs, a cost efficiency saving of £750,000 was shared by the participating London Boroughs in 2014/15. With more London Boroughs now taking part it is expected that the savings figure will be in excess of £1 million by the end of 2015.

E-auctions
An eAuction can help you drive competition amongst bidders to deliver significant price savings. There may also be an opportunity to aggregate your requirements with other customers to achieve greater savings for all. During an eAuction bidders compete with each other in real time and have multiple opportunities to improve their price, encouraging bidders to offer greater price savings than a standard best and final offer approach.

eAuctions can be based on price alone or can also take other criteria, such as quality, delivery or service levels, into consideration. ‘Reverse’ auctions can increase savings if you are buying goods or services. ‘Forward’ auctions can increase revenue if you are selling.

Benefits include: a legally compliant process; providing transparency to all parties; potential for increased savings or revenue; allowing bidders multiple opportunities to bid; and removing the requirement to undertake a traditional price evaluation.

The service includes: assessing the suitability of your procurement for eAuction; providing advice on the eAuction strategy that will best meet your requirements; agreeing timescales to meet your needs and project managing the eAuction process; providing wording on the eAuction process to be included in your tender documentation; building and testing the eAuction; training your bidders in the use of the eAuction software; managing the live eAuction; and reporting on the results of the eAuction.

Since January 2013, CCS has provided a rolling programme of fortnightly auctions as a managed service for the Department of Energy and Climate Change (DECC). The service delivers the Government’s ECO Brokerage initiative and facilitated trades worth £329 million in the 2013/14.
In the same period, a regular programme of vehicle purchase eAuctions saved customers £12.2 million.

Additionally, a forward eAuction for the sale of recycled newspapers generated £1.8 million revenue for local councils. IT Hardware eAuctions have achieved as much as a 33 per cent price reduction. Liquid Fuels eAuctions achieved a 46 per cent price reduction, and Office Supplies eAuctions have achieved up to a 47 per cent reduction in price.

Concerns over buyer awareness
A new survey of technology SMEs has revealed ‘widespread concern’ that public sector procurement staff are not using all available tools to buy services from smaller firms. The research, conducted by techUK, has found that while initiatives such as the government’s Digital Marketplace portal and G-Cloud frameworks were well received, more work was needed to boost civil-servant awareness of how SMEs can meet their needs.

The government has set a target of directing 33 per cent of procurement spending to SMEs by 2020. According to the CCS, the current level is 26 per cent. Speaking at the launch of the research, CCS chief executive Sally Collier said there was a ‘very targeted’ intention to try and address an ongoing disparity between central and local government demand through services like G-Cloud.

Collier said: “We know that small businesses can be highly innovative and have the expertise we need to secure more value for the public sector. That’s why the government is changing the way it does business to open up public sector procurement to more small businesses. Already, 26 per cent of government spend flows directly and indirectly to small businesses and by 2020, this is set to rise to 33 per cent.”

Naureen Knah, techUK associate director, said: “SMEs are overwhelmingly positive about the government’s new target, and G-Cloud is the clear ‘star of the show’. The next phase needs to focus on raising awareness and use of important tools such as G-Cloud, Contracts Finder and Mystery Shopper. Government and industry need to work together to enable and support better collaboration through the supply chain.”

Further Information
ccs-agreements.cabinetoffice.gov.uk/contracts/rm1063