By analysing thousands of contract award notices from NHS Trusts, and contrasting the findings with the trusts’ performance in the NHS Procurement League Table, we identify some interesting and valuable procurement patterns.

NHS Improvement publish an annual analysis of NHS Trusts’ performance in relation to procurement called the NHS Procurement League Table. 

The table is an analysis and ranking of Non-specialist acute providers in England. 

The most recent league table covers the period 1st October 2017 to 30th September 2018.

We analysed the published contract award notices from the trusts for the two years prior to 30th September 2018. 

The league table contains three metrics per trust: Overall Score, Process Efficiency and Purchase Price. (detailed definitions here (pdf))

For each metric, the trusts’ performance is reported as being in the top-25%, the middle-50% and the bottom-25%.

Procurement for trusts often procure using so-called frameworks.

A Framework Agreement is a general phrase for agreements with providers that set out terms and conditions under which agreements for specific purchases (known as call-off contracts) can be made throughout the term of the agreement. In most cases a framework agreement will not itself commit either party to purchase or supply, but the procurement to establish a framework agreement is subject to the EU procurement rules.

A procurement can also happen outside a framework as a one-off procurement. 

Frameworks can be an efficient way of procuring and we found that the trusts who were in the top-25% for Process Efficiency were more than twice as likely to use frameworks when procuring than those in the bottom-25%.

Interestingly, top performers on Purchase Price were less prone to use frameworks compared to the rest, so while frameworks are process efficient, they are not a silver bullet for achieving lower prices. 

However, when the top performers on Purchase Price did use frameworks, they stood out from the rest as they received, on average, over fifty percent more bids than the rest.

The UK government has set the challenging aspiration that 33% of procurement spend shall be with small businesses by 2022. Our analysis finds some additional good reasons for doing more business with SMEs.

The trusts in the bottom-25% (overall) were only half as likely to include SMEs in their frameworks than the rest.  

Furthermore, the top-25% in Process Efficiency were almost twice as likely to include SMEs in their frameworks.

But while SMEs are good for Process Efficiency, they might not be able to offer the low prices that larger suppliers can.  The top-25% in Purchase Price were only half as likely to award contracts to SMEs in their frameworks than the rest. 

Taking the analysis as a whole, the really significant finding is that top performers are able to attract substantially more bidders in their frameworks. 

It underscores the importance of efficiently promoting procurement opportunities to drive more bidders – especially for NHS frameworks – and not just relying on suppliers finding procurement opportunities just because they are published. 

Investment in a dedicated strategy for recruiting a constantly growing number of suppliers is likely to yield excellent returns in the form of cost savings on procurement.