Government ‘making it up as they go along’ on non-levy tendering

Government ‘making it up as they go along’ on non-levy tendering

The government has been accused of “making it up as they go along” on critical questions over non-levy tendering, especially concerning maximum bid sizes.

The Education and Skills Funding Agency launched a new tender process for delivering apprenticeships to employers not subject to the levy last month, after its first attempt was “markedly oversubscribed” and later ditched.

It claims that this new minimum-£440 million procurement has a number of “critical differences”, including new tender value caps and contract award limits.

These, it says, will “ensure greater confidence that awards are set at realistic levels” – but many in the sector have blasted official replies to queries about the way these caps are calculated for doing anything but.

Guidance put out by the ESFA as part of the invitation to tender states that the cap for new directly contracted apprenticeship providers will be based on their turnover in 2015-16.

The assumption widespread across the sector was that this would exclude providers if they weren’t trading in 2015-16, as they wouldn’t have published accounts showing turnover for that year.

But in an official response to clarification requests from bidders, the ESFA indicated that this may not be the case.

“Organisations who were not trading in 2015-16 and therefore cannot provide turnover for this period, should submit 2016-17 turnover values,” it said on its Bravo e-tendering portal.

There are now concerns about how the ESFA intends to verify providers’ 2016-17 turnover claims, seeing as that year’s accounts have yet to be published.

One bemused sector expert, Steve Lawrence, the managing director of East Essex Vocational Training, complained to FE Week that “they appear to be making up the rules as they go along”.

“The whole thing in terms of guidance and clarity gives no real faith in the process,” he said. “The process of making procurement simple for small- and medium-sized enterprises appears to have gone out of the window, along with the idea of what the answer should be with regard to the turnover.”

This was not the only confusing answer to one of more than 140 questions: one provider asked which financial year start and end dates it should use as its accounting period differed from the standard April 1 to March 31 window.

They appear to be making up the rules as they go along”.

It was told to “provide your organisation’s declared turnover from the published accounts for the year 2015-16”.

This left providers whose accounting periods go by calendar year – from January to December – scratching their heads over whether they should state their turnover from 2015 or 2016 – and if it is the year ending 2016, some won’t be verifiable as they haven’t been published yet. And some had an extended accounting period in 2015-16, covering 15 months.

In another twist, the ESFA today notified bidders that they are “currently dealing with a number of queries in relation to mergers. We are aware that you are awaiting our response and we will come back to potential providers as quickly as possible.”

The current tendering process for delivering apprenticeships to non-levy paying employers was launched on July 28, and covers the period between January 2018 and the end of March 2019.

According to the ESFA’s ITT document, providers can be awarded contracts from a minimum of £200,000 up to a maximum “derived from the annual figure, as set out, adjusted to reflect that the initial contract period is a 15-month term (1.25 years)”.

The upper limit varies depending on the status of the provider, be it a new provider, a subcontractor or an existing apprenticeship provider.

These range from “turnover 2015-16 financial year multiplied by 1.25, or £750,000; whichever is lower” for new providers, to “110 per cent of non-levy historical delivery for 2015-16 funding year (August 1, 2015 – July 31, 2016), multiplied by 1.25” for existing providers who delivered more than £1.5 million of apprenticeships to non-levy paying employers that year.

A spokesperson for the Department for Education said: “Providers can find out this information and more by submitting a query via the message boards on our e-tendering portal, Bravo.”