The NHS Procurement Framework Aims To Cut Costs

The NHS procurement framework aims to cut costs

The UK’s National Health Service (NHS) is set to reduce its operating costs by launching a new Framework Agreement. The NHS Procurement framework, known as “The Healthcare Clinical Information Systems Framework” was developed by NHS Shared Business Services (NHS SBS) and it includes 26 suppliers, a number of which are SMEs. The aim of the framework agreement is to reduce the costs of procuring clinical systems by saving time and money. This has not come as a surprise as government bodies are under pressure more than ever to cut down costs. The way forward to this is by utilising procurement strategies to determine where cost cutting is necessary.

For people not familiar with framework agreement, Frameworks are a pre-competed route to market providing a vehicle to centralise procurement spend. This normally involves a tender for goods and services where at least 4 nominated suppliers are selected to provide the goods and services on demand for an agreed period of 4 years subject to renewals for additional 2 years before tendering the process again; assuming things went well through the initial period.

How Does Framework Agreement Work?

The participating organisations as stated on the tender documents will have to run mini-competitions with suppliers on the framework before they can procure any of the goods or services. This process is however faster than running a full OJEU tender from the scratch.

The framework, which has a potential spend of £1.25 billion, will operate for four years with the option of extending this for a further two years, and is free for any NHS organisation to access

According to Supply Management, “the framework is divided into six lots covering clinical systems, theatre clinical systems, integrated emergency care clinical systems, child health systems, maternity systems and specialist electronic prescribing clinical systems”.

The Healthcare Clinical Information Systems Framework is to achieve an efficient and strategic way of procuring complex clinical systems whilst saving time and money according to the NHS SBS director of procurement, Peter Akid.

This framework is about achieving a far more efficient and strategic way of procuring complex clinical systems that reduces the procurement timescales and save tens of thousands of pounds in the process

Benefits Of Using Framework Agreements:

1. It reduces administrative effort in time and costs of running a full procurement process each time
2. Allows for flexibility as participating organisations are not obliged to use the framework agreement.
3. Risks and contract management are shared between the participating organisations
4. It encourages shared procurement expertise and resource
5. With multiple suppliers on the framework, there is plenty of choice available for the buying organisations

The benefit to both the suppliers and the procuring organisations is that, there is aggregation of demand. The buying organisations will enjoy lower prices whilst the suppliers will sell more of their goods and services, though with lower costs, but with a higher turnover.

Benefits Of Framework Agreements To SMEs

1. Because frameworks are usually in small lots, this will enable the SMEs to participate in the tender process; therefore they are able to mingle with the industry’s top players
2. Facilitates continuous improvement within long-term relationships

Disadvantages Of Framework Agreements To SMEs:

1. Being on the framework does not guarantee that your goods or services will be called-off; because it may not happen at all, it may be that you are being eliminated during the mini-competition due to a number of factors.

2. As this may not be your main contract, therefore, you may be called-off at an unsuitable time when you can’t meet the buyer’s request.

HINT:

Are you an SME struggling to get your next government contract? The solution for you is to bid for small lots being advertised within complex tenders or search for tenders with  ‘framework agreement’ in them.

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