Guidance

Tendering 'jargon busting' guide for academy trusts

Updated 24 April 2024

Applies to England

This content was last updated in November 2021.

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1. Who is this guide for?

This guide is particularly aimed at those working within academy trusts who may be involved in procurement and tendering but who might not have specialist procurement training. For example, those staff based in finance and administration teams who are asked to support a tendering process, or heads of academies who are seeking to tender for goods, services or works for the first time. It may also serve as an aide-memoire for experienced practitioners.

2. Introduction

For academy trusts to function well and to ensure a high quality of education is achieved for pupils, the effective and proper procurement of goods, services or works is essential. This can be as simple as procuring new sports equipment for the PE department, or it can extend to awarding a multi-million-pound contract for a new building.

The way in which goods, services and works are procured is equally as important as what is procured. Indeed the Academy Trust Handbook (which academy trusts must comply with) sets out several requirements for procurement. Paragraphs 2.27 to 2.29 state academy trusts must ensure:

• spending has been for the purpose intended and there is probity in the use of public funds
• spending decisions represent value for money
• internal delegation levels exist and are applied
• a competitive tendering policy is in place and applied, and the procurement rules and thresholds in the Public Contract Regulations 2015 and Find a Tender Service are observed
• professional advice is obtained where appropriate

To ensure all the above are in place, every academy trust will have its own procurement policy which will be implemented by procurement procedures. This procurement policy may be a stand-alone document or may be contained within wider trust financial regulations. The policy will set out the rules for obtaining written quotes and when a tender process must be used, in accordance with public procurement regulations. It is important to consider the total value of the proposed contract before starting a procurement, to ensure the rules are applied correctly.

Procurement involves the entire process from identifying the need to make a purchase through to payment of the invoice, whereas tendering itself is the process of going out to the external market to obtain bids and how a supplier is appointed for the goods, services or works needed.

Under contract regulations there are five procedures used to award contracts in the tendering process and the two most common types (open tenders and restricted tenders) are explained in this guide. The three other procedures (competitive dialogue, competitive with negotiation and innovation partnership) can only be used in specific circumstances, and it is not expected that they will be commonly used by academy trusts, so they are omitted from this guide.

3. What is the aim of this guide?

Tendering can be a complex subject and as you navigate through the various stages you may come across phrases or acronyms which are new to you.

This guide uses plain English to explain the more common words and phrases you may see and then includes examples of how they might apply in an academy trust setting. This guide will help you to navigate more easily some of the processes involved, but its aim is not to tell you how to procure goods, services or works.

There are links at the end of the document to more detailed guidance to support you further.

Please note this guide is not intended to be a comprehensive glossary of terms nor is its aim to provide a legal definition of each term.

4. Tendering 'jargon busting' guide for academy trusts

Phrase	What it means	Example relevant to an academy trust
Aggregation	The process of identifying the total requirement for a specific type of goods, services or works across an organisation, and then procuring for all as a single purchase. Benefits can include a better price or improved delivery times.	A trust may consolidate the amount of office and classroom supplies it needs across all its academies. It will procure the supplies based on the overall volume and value, rather than each academy buying the supplies separately at a higher price.
Approved supplier list (sometimes referred to as preferred supplier status)	A list of pre-approved suppliers with which an organisation can contract. To be 'pre-approved' suppliers will need to have already gone through a formal procurement process, for example an open tender exercise in line with procurement regulations. The supplier may or may not have to be used exclusively depending on the terms of the original contract.	A trust may choose to tender for a Mechanical and Electrical (M&E) maintenance contract that gives all academies that are part of the trust the option to contract with the winning supplier for M&E work. This supplier would then become a preferred supplier for M&E work.
Call off contract/mini competition	Pre-qualified suppliers are included in a framework agreement with terms and conditions. Buyers can call off and award individual contracts to those suppliers during the duration of the framework agreement. The pricing of the contract can either be pre-agreed in the framework agreement or can be determined by a 'mini-competition' between some or all the suppliers that have been listed in the framework agreement to secure the best price and quality available.	If a trust wanted to find out which of the suppliers on a cleaning services framework were most competitive for their specification, it would invite them to submit bids and the winning bid would be subject to the pre-agreed terms and conditions. After choosing the winning bid the trust would then "call off" the agreed contract with an order form which would reflect the specification and price.
Collude / collusion	Suppliers or other parties, such as agents, acting in a manner that is not consistent with open market competition to agree prices or quality. The terms have the potential to be indicative of fraudulent or illegal acts if they relate to breaking procurement law.	Two grounds maintenance contractors may agree that they will charge a certain price for their work to prevent them undercutting each other and eroding profit margins.
Compliance	Refers to conforming with regulations, typically procurement law but also with other relevant legislation, regulation, policies, and guidance.	Within public sector procurement this means following the Public Contract Regulations 2015 when carrying out any procurement activities. It also applies to the additional requirements for academy trusts contained in the Academy Trust Handbook, the trust's own procurement policies, procedures, and its internal delegation levels.
Contracting authority	A buying organisation, governed by public law, who must comply with the Public Contract Regulations 2015 (amended 2020).	Academy trusts are deemed to be this because they receive their funds predominantly from the taxpayer via ESFA/DfE and therefore are required to follow the Public Contract Regulations 2015.
Economic operator	Any person or organisation capable of offering to supply goods or provide services or carry out works.	These are an academy trust's suppliers, contractors, and service providers.
Expression of interest (EOI)	A first step in a procurement process where a potential bidder is expressing interest in receiving a tender document.	An academy trust may be seeking to carry out roofing replacement works and may invite building contractors who might be interested in subsequently tendering for the work to contact the trust.
Financial levels of authority	These are the levels at which individuals within an organisation can approve expenditure.	For an academy trust these limits will be set out within its list of internal delegation and are likely to be based on seniority of role. The limits will specify a maximum amount of expenditure which can be authorised. For high value spend it is likely that trust board approval will be required.
Find a Tender Service (FTS)	With the conclusion of Brexit, from 1 January 2021 this is the new UK e-notification service where notices for new procurements are required to be published in place of OJEU. FTS is a public portal which brings together buyers and sellers	There is a legal obligation for academy trusts to publish certain high value notices in relation to public procurements. These are based on published thresholds.
Force majeure	Circumstances that cannot be foreseen which prevent a contract from being fulfilled.	A war or natural disaster are such examples.
Framework agreement.	An agreed list of products, services, and suppliers with a set of agreed prices, terms, and conditions, that purchasing organisations can "call off" from. Using a framework agreement can be quicker and easier than running a full procurement process as the agreements have already been through a tendering process.	DfE has numerous agreements in place for schools and academies. These range from resources such as furniture and books and services including energy and utilities. More information can be found here. By using a DfE framework, trusts can be assured of compliance with procurement regulations, quality standards and value for money.
Invitation to tender [ITT]	The initial step in a competitive tendering process, in which the bidders are asked to submit their offer for the goods, services or works required.	This is a formal document prepared and issued by the trust to potential bidders. It would typically include a covering letter, a statement of requirements for the services or works needed, the criteria for assessing bids and details of how bids should be submitted.
Most economically advantageous tender (MEAT)	A term within the Public Contract Regulations that allows tender evaluation criteria to include other aspects along with price.	To achieve this an academy trust will consider other important factors, along with price, when it sets its tender evaluation criteria. For example, quality, technical merit, accessibility, and sustainability considerations.
Novation	The transfer of ownership through a change in the terms of a contract from one party to another, where all parties concerned agree to make the transfer.	This may occur when academies transfer in or out of an academy trust and the ownership of the contract transfers from the old trust to the new trust. For example, this could be the transfer of an operating lease for photocopiers.
Official Journal of the European Union [OJEU]	The official gazette of record of the European Union, in which certain procurements must be advertised. Following Brexit this has been replaced by Find a Tender for high value contracts in the UK.	For academy trusts, new procurement commencing from 1 January 2021, above the relevant threshold, must be advertised on Find a Tender.
Open tender	A type of contract award procedure. An advert is placed, and all interested parties can submit a tender to supply the goods, services or works required.	An advert may be put on an academy trust's website requesting tenders to provide services such as legal advice. Where the tender is above the relevant threshold this must also be published on Find a Tender Service too.
Procurement Policy Note [PPN]	These documents provide guidance on public sector procurement and are published by Cabinet Office on GOV.UK.	Examples are those issued in 2020 recommending best practice for payments to suppliers during the Covid-19 pandemic.
Price/quality evaluation	The process within a tender that determines how price and quality (with pre-determined percentages assigned to each) will be evaluated in comparison with other competing bids.	A catering contract may be assessed 30% based on price and 70% based on quality (made up of 30% service delivery, 20% customer care and 20% environmental and social impact). Each bid will be scored to obtain overall weighted totals.
Public Contracts Directive [2014] and Public Contract Regulations [2015] [PCR]	The Directive sets out the EU legal framework for procurement and it was made into UK law by the Public Contract Regulations (2015). These Regulations were amended following Brexit. The requirements for public bodies remain largely the same. However, the main change is to move to the UK Find a Tender service rather than the use of OJEU. The Regulations set out the framework and principles for procurement by public bodies. They require public bodies to ensure fair, open, and transparent procurement processes are followed.	The rules are based on thresholds, depending on the contract value and the type of contract. If an academy trust were seeking to procure a contract which exceeded the relevant threshold, it would be subject to the full public procurement regime set out in the Regulations, unless it is fully or partially exempt. The thresholds for 2022/23 are (NB these thresholds will be subject to review in January 2024): - goods – £213,477 - works – £5,336,937 - most services – £213,477 Some services for education, health and care are covered by the 'light touch regime'. The threshold for these is £663,540. The services covered by this regime are listed in the Regulations. Contracts valued below the thresholds do not have to comply with the full Regulations. However, they do have to comply with the principles of procurement set out in the Regulations. Academy trusts may need to seek appropriate legal advice to ensure they are compliant.
Quote versus response to tender	Both are a formal offer to supply goods, provide services or carry out works for a stated price. However, tenders tend to be for higher value items and typically include a formal specification and evaluation. An organisation will set financial limits, which reflect the Regulations, in its procurement policy on when it is appropriate to request quotes (and the number required) or when a tender response is required.	An academy trust may approach an agreed number of local suppliers and ask for a quote to repair roof panels but would carry out a tender exercise and ask for bids for a complete roof replacement project. The decision to obtain quotes or tenders must be based on the rules and limits set out in the trust's procurement policy.
Register of business interests	To demonstrate impartiality, transparency and openness, all members, trustees, local governors, and senior employees of academy trusts are required to complete and update this document. It records the involvement of these people (and their close family members) in other businesses, educational institutions, and charities.	A head of academy may also be a director of a company providing photography services. This involvement must be declared and recorded on the register. If the academy trust is looking to procure services from this company, there is a potential conflict of interest and particular care must be taken to ensure the trust's procurement policy is followed. As a minimum requirement the member of staff must withdraw from any part of the selection process.
Restricted tender	A type of contract award procedure. It is a two-stage procedure that seeks to limit the number of bidders by introducing a cut-off after a first stage which assesses bidders' capacity, capability, and experience to fulfil the contract.	An academy trust may require all interested parties for a cleaning contract to pass a pre-qualification stage based on sector experience to qualify to submit a bid.
SLA versus contract	A Service Level Agreement (SLA) is usually used to describe a service offered by one part of an organisation to another part. A contract is used for a service provided by an external supplier, the detail of which is included in a specification.	SLAs may be in place for central finance services provided by the trust's head office to its academies. Where these are provided by an external firm, they will be under a contract and to an agreed specification. Some contracts with local authorities for services may still be managed under an SLA as a legacy from predecessor schools.
Social value	This principle arises from The Public Services (Social Value) Act 2012. This requires contracting bodies of public services to consider for example (before they start to buy services) how they could also achieve wider social, economic, and environmental benefits.	Local purchasing to reduce food miles or the provision of cooking lessons for parents are examples of social value criteria for an academy trust catering contract.
Statement of requirements / specification	Sets out clearly a detailed description of what the organisation needs so that potential suppliers can provide it. It allows a comparison to be made between competing offers of the same or similar specification.	If a trust were procuring sports equipment, it would set out, as a minimum: - a precise description of what is needed - an explanation of what it should achieve - the quantity required - what quality it should be - when it is needed by
Value for Money (VfM)	Is the optimal use of resources to achieve economy (spending less), efficiency (spending well) and effectiveness (spending wisely). It is not about achieving the lowest initial price.	An academy trust may decide to pay a higher price for a piece of catering equipment in the knowledge that its estimated useful life will be significantly longer than a cheaper alternative.

5. Additional information sources

Buying for schools

Buying procedures and procurement law for schools

Managing Public Money (Annex 4.6)

You may also find the Chartered Institute of Procurement and Supply website useful.

6. Acknowledgements

Special thanks to:

• Wendy Beasley - Leodis Academies Trust
• Chris Rising - MHA Macintyre Hudson
• Ben Waterman – Outwood Grange Academies Trust
• DfE Schools Commercial Team.