Purchasing guide

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Last updated 7 October 2005

Making best use of the school budgets to maximise its impact on the raising of educational standards is a key responsibility for all school governors and managers.

Getting the most from goods and services purchased by schools helps them achieve value for money and best value.

Schools will already have written financial procedures that should have regard to the following purchasing issues:

agreed financial limit on purchasing decisions which can be made by the head teacher without reference to the governing body
agreed financial limit on purchasing decisions which can be made by other school staff without reference to the head teacher
agreed purchasing threshold over which quotations or tenders must be sought
effective separation of duties so that no one person is independently responsible for the entire purchasing process (ordering, receiving and authorising payment)
the development of an audit trail so that the school is able to track and evidence purchasing decisions
the requirement that all involved in making purchasing decisions sign a declaration of interest statement so as to minimise potential conflicts of interest

The processes of obtaining quotations and tenders are likely to feature frequently in purchasing procedures adopted by schools. Key features underpinning these processes include:

a clear statement of the school's requirements
a format with which suppliers' bids should comply
a timetable for submitting and evaluating quotations or tenders
written processes for evaluating the quotations or tenders

Schools should seek advice from their LEA where they intend to make very large purchases, as EU Procurement Rules of Tendering may apply. For most schools, this would be relevant only in the case of significant building works but could also apply where schools group together to purchase goods or services.

Defining needs

Schools need to clearly identify both their requirements and the way in which they will measure performance. It is sensible to incorporate these into a written document, often known as a Statement of Requirements, which can be used to check against quotations, tenders, service level agreements or supplier specifications to ascertain which best meets the school's needs. On occasions a school may wish to write its own detailed specification or request that a supplier's specification be tailored to more closely match a school's own requirements. In producing a written definition of needs, either for internal or external use, schools should have regard to the following:

required frequency of delivery
deadlines for service delivery
the range of service to be provided
desired outputs and outcomes
the required level of performance
health and safety requirements

Where service delivery involves staff employed by the service provider working in close contact with pupils, head teachers must satisfy themselves that all appropriate background checks have been carried out.

Measuring performance

Performance measures should be identified at the time of defining needs so that they are known and understood by all parties and are available to underpin the monitoring of service provision. School managers are familiar with the use of SMART (Specific, Measurable, Achievable, Realistic and Time-related) targets and measures and these apply equally to purchasing decisions. It is important that in addition to being SMART, measures should be:

unambiguous and not open to misinterpretation by either party
attributable so that responsibility for achieving good performance is clear
written in such a way as to facilitate ease of monitoring
limited in number
reflecting the school's culture, aims and objectives

Contracts and Service Level Agreements (SLAs)

Contracts and Service Level Agreements (SLAs) are written agreements between two parties for the supply of goods or services. Contracts are normally between schools and private suppliers, whereas SLAs usually underpin the provision of services between schools and their own level.

Effective contracts and SLAs share a number of common features:

details of all parties involved
duration of the agreement
the goods or services to be provided including level and frequency
the obligations of both parties
the location of service delivery
where appropriate, the names and qualifications of those providing the service
the performance measures
complaints and dispute resolution procedures
the price of the service and the payment mechanism
an authorisation of contract form, signed and dated by all parties

Purchasing options

Schools will be familiar with a variety of purchasing options which have been offered by LEAs or local companies. However, the number and range of private suppliers is now increasing and many LEAs are reducing the services that they deliver directly to schools. As a result, schools are looking to alternative suppliers and exploring different purchasing options. Such options include the formation of purchasing consortia where a group of schools come together to increase their purchasing power and the use of a brokerage service, which can arrange the purchase of goods and services on behalf of schools. Many schools will also be considering the use of e-commerce for some of their purchasing.

Monitoring and evaluation

Effective monitoring and evaluation is an integral part of the purchasing process and has its foundation in clear statements of requirements, specifications, contracts and SLAs.

Monitoring focuses on the regular routine, checking that the services are delivered as specified and the immediate reporting of any shortcomings.
Evaluation is concerned to explore whether the quality of service or goods is meeting the needs of the school as effectively, efficiently and economically as possible.

Effective monitoring and evaluation both involve:

an individual with responsibility for ensuring that the process takes place
clarity of desired outcomes, outputs and performance measures
the collection of evidence both quantitative and qualitative
early reporting of faults and follow up until satisfaction is achieved
the making of judgements and decisions about future service provision

Useful links

The Centre for Procurement Performance (CPP) is a new unit set up by the Department for Education and Skills to promote better procurement across the education, skills, children and families system. The CPP has a national focus and will work closely with the procurement community and key stakeholders across the system to identify and exploit opportunities to help budget-holders deliver better value for money.

Main text
Best practice
Further information