The commissioning and procurement process

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If you want to earn income from delivering public services, you need to understand what commissioning and procurement involves.

Commissioning is the process public bodies use to assess the needs of people in the area, design the services to meet those needs and select an appropriate service to meet those needs.

Procurement is one of the options they may use for selecting who is going to provide the service. Another option might be to provide grant aid.

How should public bodies commission services?

In recent years Government has produced guidance to public bodies on improving commissioning practices and fostering better relationships with non-profits.

National Audit Office’s online ‘Successful Commissioning’ toolkit is a good place to start for both commissioners and non profits.

This has built on the government’s eight principles for good commissioning:

1. understanding the needs of users
2. consulting potential providers
3. putting service outcomes at the heart of the process
4. mapping the range of potential providers
5. considering investing in capacity building
6. ensuring contracting processes are transparent and fair
7. ensuring long-term contracts and risk-sharing
8. seeking feedback from service users, communities and providers.

More detail on these principles is available in Eight principles of good commissioning (Improvement & Development Agency).

Unfortunately, many commissioners skip the first five principles and go straight into contracting, without thinking enough about the nature of the service and the range of potential service providers.

The Commission for the Compact has published some helpful guidance for local authorities and other public sector bodies commissioning third sector organisations to provide public services. Make sure your commissioners are aware of this guidance.

• Compact Commissioning Guidance

• The Compact and Procurement Law.
  

Commissioning competencies

Over the last few years, a number of joint taskforces have been set up to try to improve the quality of commissioning. 'No excuses. Embrace partnership now. Steps towards change!' (Department of Health) sets out a series of recommendations for all those involved in commissioning. You can use these recommendations to keep your commissioners up to the mark.

You can also see how your commissioners measure up against the Department of Health's world-class commissioning competencies.

Influencing commissioning

Non profit organisations can influence commissioning by developing relationships with relevant public bodies. This may be through the development of The Compact, membership of local partnerships and networks or attending key consultation events and meetings.

Review the eight principles for good commissioning (shown above) to see how you might best engage in the process. You can influence service planning, what services are open for tender, how these services are to be delivered and the tendering process itself.

User involvement in commissioning

One of the best ways to influence commissioning is to involve your service users in discussions with commissioners.

For example, the MS Society is working with the Parkinson's Disease Society and the Motor Neurone Disease Association on three commissioning pilots in Wandsworth, Bath & North East Somerset and Cumbria, to demonstrate what user involvement in commissioning can achieve.

By developing menus of the services that users actually want, the pilots are beginning to change commissioners’ behaviour. What users want is often different to what your commissioners think they want.

Commissioning strategies

At the local level, councils for voluntary service - such as Birmingham Voluntary Service and Voluntary Action Leicester - are working with local authorities to develop joint commissioning strategies for the third sector. These strategies spell out the potential of third sector organisations to deliver effective public services and highlight the barriers which need to be overcome to realise this potential.

One example is Staffordshire County Council’s joint commissioning strategy between the county council and the PCT.

Help available with commissioning

Your local infrastructure organisation, such as the council for voluntary service or rural community council, should be able to advise on what is happening locally and how you can get involved. You can search the NAVCA directory to find the local infrastructure organisation for your area.

A common misconception amongst commissioners is that if you are planning to bid to provide a service, you cannot play a part in the commissioning process. This is not true. The procurement process is different to and separate from the commissioning process.

Legal framework for procurement

When awarding contracts for public services, public bodies are required to consider compliance with three levels of rules:

1. Their own standing orders / financial regulations requiring them to obtain a number of quotes for purchases in excess of certain amounts in order to obtain best value.
2. National rules requiring value for money to be sought, usually through competition. This may mean the lowest price, but can also allow for quality and added value considerations. See our information on tendering and tender scoring.
3. European Union (EU) rules regulating the way in which public bodies purchase works, goods and services and which require transparency, objectivity, equality of treatment of bidders and non-discrimination on the grounds of nationality of the contractors.

This is explored in more detail in NAVCA/NCVO’s pathway’s through the maze.

Tendering process

Read the Finance Hub's top tips for tendering and common mistakes that people make when tendering.

Useful links

• A beginner's guide to commissioning (NAVCA)
  
• Department of Health model contracts:  these model contracts are available for general use.
• National Programme for Third Sector Commissioning: provides training for commissioners and providers to improve commissioning practice.
• 'Commissioning - just hopeless' (Third Sector): article by Richard Gutch about the sector's experience of commissioning, based on interviews with more than 100 third sector leaders.
• ‘Commissioning possible’ (Greater Manchester Centre for Voluntary Commissioning): report based on 20 in-depth interviews with nonprofit organisations in Greater Manchester about their experience with public sector commissioning.

Have your say

Do your commissioners consult the non profit sector about service needs and specifications in your area? Have you been able to influence them? Are grants being replaced by contracts in your area? Have you been able to deliver public service contracts whilst remaining true to your mission and values? Has contracting changed the way your organisation operates?

Share your experience on the Commissioning and procurement forum.