As Halloween approaches, we're not just focused on ghosts and ghouls. We're also here to clear the smoke and mirrors around some common misconceptions that have been haunting the procurement world. Let's shed some light on these misunderstandings and get you up to date with the real facts.
Myth 1: Public procurement providers charge fair and proportionate fees
This is false. The fee that suppliers are charged and sometimes the fee public sector organisations pay to use a procurement consortium are not always used in public interest.
While some consortia do reinvest their profits into the public sector, others are private businesses that generate profit for its shareholders. Not all procurement consortiums reinvest their money for public good.
At Procurement Hub, we are part of Places for People which is a social enterprise that reinvests 100% of our profits into back into the public sector for social housing or donated directly to charity. We have already donated over £1m to charity.
Myth 2: We need mini-competitions to prove value for money
Also, false. A public sector organisation looking to procure a project does not need to complete a mini competition to prove value for money.
When you use Procurement Hub's frameworks, the tendering process has already been completed for you. Suppliers go through a rigorous tender exercise to gain a place on the framework. This includes rigorous financial checks, to ensure their financial stability.
Suppliers complete benchmarking exercises against a range of projects at different values and stages to show commercial competitiveness which is measured when evaluating tenders.
By using a framework, you can accelerate your procurement to save time, money and unnecessary stress.
Myth 3: Frameworks limit your Key Performance Indicators (KPIs)
Not necessarily. Some people think that you can’t set the KPIs you need to achieve for your organisation when using a framework.
However, many frameworks allow you to choose your own KPIs and social value targets to suit the needs of internal requirements. At Procurement Hub, we work closely with you to tailor your KPI reporting and ensure that they are adhered to by closely working with the contractor and monitoring performance. We can even provide regular KPI reports to show you your progress and ensure compliance.
Myth 4: You can pay less fees elsewhere
While some providers may claim lower fees, they often hide them in the main contract total or charge annual subscriptions to contractors for being on a framework which in turn can inflate the value charged back to you as a way of clawing back this money.
At Procurement Hub we do not do this. There are no annual fees and we adopt a fully transparent approach. We publish all our fees clearly on our website that can be easily found on each solution page and pride ourselves on having some of the lowest fees in the market, ranging from 0.15% to 0.5%.
Procurement Hub is part of an social enterprise with no shareholders taking profits out of the business. As a public sector organisation ourself, we understand the frustrations of our members and all of our profit goes back to helping the public sector.
Don't be scared by procurement myths. With the right information, you can make informed decisions and achieve your goals. Procurement Hub is here to help you navigate the complexities of procurement and ensure you get the best value for your money.
For more information, contact our procurement experts, here.