The Government procurement service framework agreement for office supplies

Report: 7
Date: 20 October 2011
By: Director of Procurement Services on behalf of the Commissioner

Summary

This report seeks the approval of members to place call-off contracts for the supply of Office Consumables for a period of four years, under a framework let by the Government Procurement Service. The agreement consists of two Lots;

Lot 1 - Office Stationery, Office Paper & Small Office Machines,
Lot 2 - Printer Consumables;

The Framework Agreement will be effective from 1 October 2011. Subject to approval being granted by the MPA to Lot 1, the total estimated expenditure for both Lots is £8.8m and Call-Off Contracts will commence on 1 December 2011.

A. Recommendations

That members

1. approve the use of the Framework Agreement and the placing of a call-off contract with the successful bidder for Lot 1. This call-off contract is for three years with an option to extend for one further term of 12 months. The total four year value for this lot is estimated to be £5.45m. (Reference table A in Appendix 1).
2. note that Contracts Board, under delegated authority, on 27 September 2011 approved the use of the Framework Agreement and the placing of a call-off contract with the successful bidder for Lot 2. This call-off contract is for two years with an option to extend for two further terms of 12 months. The anticipated four year value for this lot is estimated to be £3.35m. (Reference table A in Appendix 1).

B. Supporting information

Background

1. In 2007 the MPA approved the use of a Framework Agreement for Office Consumables tendered by the Ministry of Defence (MoD). This agreement provided the Metropolitan Police Service (MPS) with a fixed price for core items along with annual price reductions over four years, which has delivered significant savings and value for money.

2. Since the MoD agreement was awarded, the market for Office Consumables has seen significant increases in price, the MoD agreement however, has enabled participants to avoid these increases providing significant benefits to the MPA and was recognised as providing amongst the best prices in the market over the last four years.

Procurement Strategy Information

3. In March 2011 the Government Procurement Service took over responsibility from the MoD for the pan-Government agreement and undertook a new tender process. The Government Procurement Service placed a contract notice in the Official Journal of the European Union (OJEU) for this requirement. The MPS is specifically named in the notice as a body that can use the Framework Agreement. The new agreement is mandatory for all Central Government departments and the MPS actively participated in this process which is also available to other Wider Public Sector bodies. (Reference tables B1, B2 & B3 in Appendix 1)

4. By joining the Government Procurement Service Framework, the MPS will benefit from consolidated purchase volumes of all the contracting Central Government and Wider Public Sector bodies. The total value of the framework is estimated to be between £240m and £400m. The MPS spend volume in comparison is approximately £8.8m therefore, by participating in this collaborative initiative we significantly increase our leverage and the impact this has on the price.

5. The OJEU Notice / Framework Agreement was for two Lots:

• Lot 1 - Office Stationery, Office Paper & small office machines
• Lot 2 - Printer Consumables

6. Each Lot has been awarded to one Successful Bidder who will provide the goods to the individual public authorities on a Call-Off basis. (Reference table A in Appendix 1)

7. The Government Procurement Service held an E-Auction for both Lots of office supplies to encourage the best competitive market pricing. This resulted in the award of agreements valued at £200m to the successful bidders in each Lot.

8. Based on historic volumes the MPS annual spend for Lot 1 is expected to be £1.369m, with an annual saving of £23,000 (2%). There is, however, no guaranteed level of spend under the framework.

9. To ensure compliance during the governance and transition period the MPS, under the procurement scheme of delegation has awarded two-month fixed value call-off contracts to each of three suppliers, Lyreco Ltd., Office Depot and XMA Ltd., under the previous 2007 Framework Agreement. The total value of the three contracts is £600,000. The transition period is necessary as the 2007 Framework Agreement will expire on 30 September 2011 and so no further Call-Off contracts under this Framework Agreement may be placed after this time. The MPS have therefore placed these call-off contracts to maintain contractual compliance.

C. Other organisational and community implications

Equality and Diversity Impact

1. All Equality and Diversity implications have been considered by the Government Procurement Service who completed the tender process for the Framework Agreement.

Consideration of MET Forward

2. This proposal aligns with the intent of MET Forward particularly in respect to the delivery of value for money.

Financial Implications

3. The anticipated value for the full four years is £5.45m. This figure is based upon the fixed prices of the Framework Agreement and the estimated MPS volumes.
The table below demonstrates the current annual cost in comparison to anticipated future expenditure.

Legal Implications

4. On the basis of the information contained in this report, DLS support the recommendation set out at paragraph 1 of Section A as a route to market which complies with EU and UK procurement law.

Environmental Implications

5. Procurement Services will continue to monitor the products available in the core list and will switch to an environmental alternative should one become available that meets the needs of the organization on a cost neutral basis. This is in line with existing practice for this category.

Risk Implications

6. Manufacturing of paper continues to shrink within Europe due to the cost of production and return on investment. Should the organisation need to adapt due to outside influences beyond its control, an evaluation of product will be undertaken to assess its technical suitability and whether it meets the corporate branding requirements.

D. Background papers

None

E. Contact details

Report authors: Alan Rourke, Strategic Category Manager DoR - Procurement, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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