In this next instalment of the ‘Tender Truths’ series we look at a question which is often asked –should you tender or benchmark?
Not every school or Trust that is questioning the value of its catering or cleaning contract needs to go straight to tender. Sometimes, the smartest first step is to benchmark what you already have.
For schools and Multi-Academy Trusts under increasing financial pressure, reviewing catering or cleaning contracts can quickly become a question of procurement: Should we put this contract out to tender?
But before you start the tender process, there is another question worth asking: Do you know what you actually need to change?
That’s where benchmarking can make a significant difference.
Benchmarking or tendering: what’s the difference?
Put simply, benchmarking is about understanding where you are now. Tendering is about deciding where you want to go next.
Benchmarking compares your current operation against relevant market data and sector standards. It can look at costs, staffing, service levels, specifications, performance and other operational measures to identify where your service is performing well – and where there may be opportunities to improve.
Tendering, on the other hand, is a formal procurement process to test the market and appoint a provider against a defined specification.
The two approaches are not competing alternatives. In fact, benchmarking can be the first step towards a better tender.
The financial case for benchmarking first
One of the biggest risks of going straight to tender is that you may not fully understand the problem you’re trying to solve.
Perhaps your catering contract appears expensive. But is the issue the contractor’s pricing or an outdated specification, inefficient staffing model, low meal uptake or a service that has gradually evolved beyond the terms of the original contract?
Benchmarking can help give you evidence. It can highlight where your costs sit against comparable organisations, identify potential inefficiencies and show where there may be opportunities to improve value without necessarily changing provider.
If benchmarking identifies savings or efficiencies that can be achieved within the existing contract, you may be able to improve your financial position without the cost, time and disruption associated with a full tender exercise.
When should you consider a tender?
There are circumstances where tendering is the right next step. For example, if:
- Performance problems are ongoing and attempts to resolve them with the existing provider haven’t worked.
- Your requirements have fundamentally changed – for example, your Trust has grown, merged or changed its operating model.
- Your current contract is outdated and no longer reflects your needs, market conditions or expectations.
- The relationship has broken down and there is no realistic prospect of rebuilding it.
- Benchmarking has identified a significant gap between your current provision and what’s available in the wider market.
In these situations, testing the market can provide an opportunity to reset the service and establish a contract that is better aligned with your current and future needs.
A tender may not solve all the issues
It can be easy to see tendering as the quickest way to demonstrate that you are getting value for money.
But changing provider doesn’t automatically solve an inefficient operation. If the specification is wrong, the same problems can simply follow you into a new contract. Equally, if your current provider is delivering a strong service but your costs have drifted, there may be opportunities to renegotiate or make operational changes without starting again.
Benchmark first, tender second
Benchmarking can provide the clarity to make your tender better. By benchmarking first, you enter the market understanding your current position, knowing what needs to change and having a clearer idea of what good looks like.
If you’re questioning whether your catering or cleaning provision is delivering value, don’t automatically reach for a tender timetable. Bather the evidence first. Benchmark what you have, understand what’s working, what isn’t and where the opportunities lie. Then decide whether you need to improve, renegotiate or replace the service.
Want to know whether your school or Trust should be benchmarking or preparing to tender? Get in touch with us here to discuss your current provision and find out what your next step should be.
The Litmus team
