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Old Compact FAQs
Code of Good Practice on Funding and Procurement
Frequently Asked Questions - Updated May 2007
- What does 'longer term' contracts mean?
- Why will the term 'service level agreements' not be used in the future?
- When will longer term contracts be introduced?
- Why have some organisations got longer term contracts already?
- What steps will be taken to ensure that contracts in place now or being negotiated for April 2008 comply with the Code?
- What are the criteria for compliance with the Code?
- what is to be delivered is outcome focussed and clear;
- the terms and conditions are proportionate to the value of the service being purchased;
- the price agreed for the value of the contract reflects the full cost of the service;
- risks associated with delivering the service have been identified and agreement has been reached on the apportionment of risk;
- the contract is for three years or more;
- auditing and reporting requirements are clear and proportionate;
- payment arrangements, in advance of expenditure, are clear;
- performance management arrangements are clear;
- review procedures, break clauses, how to handle changes and notice periods and termination;
- the 'added value' of third sector provision of the service has been identified and included;
- acceptance of the Code of Good Practice on Funding and Procurement; and
- the provider is acquA accredited.
- What happens if a contract does not meet these criteria when it is reviewed?
- Who is responsible for reviewing the contracts?
- Will my organisation be contacted about this and when?
- My organisation's current contract is not fully funded. Will there be an opportunity to re-negotiate the costings and activity during this year?
- Will there be an opportunity to renegotiate costings and activity levels in 2007/08?
- What does 'being eligible' for contracts mean?
- What does being an 'Approved Provider' mean?
- have the opportunity through The Alliance to influence commissioning priorities and receive early information about new service proposals
- are eligible for contracts to be let by the PCT and Herefordshire Council for the provision of Health and Care Services
- have access to pre-tender documentation and procurement information; and
- will benefit from better channels of communication
- What does being a 'provider of choice' (preferred provider) mean?
- What happens if my organisation has not achieved accreditation and is not on The Alliance Register of Approved Providers?
- What are the PCT and Council doing to get ready for the changes?
- What if the commissioning plans are not published in time for services to be procured according to the Code?
Where contracts do not have a specific end date, there will be a move away from annual contracts to three year contracts as the general minimum , longer in some instances and possibly rolling contracts in others.
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To achieve greater clarity and to avoid any confusion with the term 'contract'.
Longer term contracts will be phased in. Some are being introduced as contracts come up for renewal, where those contracts meet already known commissioning priorities. Others will come into effect as the commissioning plans come into place, when commissioning priorities may change, with the need for new or different services. Full implementation of the Code for all third-sector contracts is targeted for April 2008.
This is either because of the nature of the specific service or a new contract has been renegotiated recently, and it is for a service that is an already known commissioning priority.
There will be a review in October 2007, to ensure that contracts are compliant with the Code of Good Practice.
It will depend on what the contract looks like and contains, including whether:
All new contracts will include a clause that requires the provider to be a full member of the Alliance . In itself, this will require a commitment by the provider (and the funder) to meet all its membership obligations.
The contract will be subject to further development and negotiation by the funder and provider to ensure that it is Compact compliant. The situation will be kept under review by the CCIG, which will compile a record of Compact compliant contracts.
The move to adopt an agreed model contract between funders and providers should eliminate inconsistencies in the longer term.
Commissioners are responsible for reviewing the contracts, with representatives from the third sector. In the PCT this is the Commissioning team, led by Paul Ryan; in the Council's Adult and Community Services Directorate and Children and Young People's Directorate this is the Contracts team, led by Martin Smith.
The Operational Manager will normally take the lead on reviewing performance under a contract but in the context of partnership with the provider. In addition, most contracts will require the provider to submit regular reports to the funder on the volume of service being provided. Where contracts have been prepared by the Adult and Community Services Directorate of the Council, it will include a 'sample' data collection form as an appendix to the contract. This form will be sent, electronically, to the provider (usually each quarter) for completion and return, electronically.
The provider will be notified of, and fully involved in the review process and will be contacted at an appropriately early stage to ensure that sufficient time is available for preparation. The aim will always be one of trying to ensure that both parties are able to deliver a service that continuously improves.
Funders are committed to the principle of 'full cost recovery' and its implementation, as stated in the Code. Full cost recovery is being taken forward by the Compact Code Implementation Group.
Funders, however, experienced significant financial constraints in 2006/2007 and there is little sign that the position will improve.
Yes, from April 2007. Full cost recovery is one of the provisions in the Code and one of the criteria against which contracts will be assessed for compliance in October 2007.
Third sector organisations will not automatically be eligible for contracts from April 2007. Eligibility will be subject to demonstrating 'fitness for purpose' to funders to take on a contract to deliver services. Funders will be assuring themselves of this via The Alliance acquA accreditation. Once accredited, organisations will be providers of choice (preferred providers).
An organisation will achieve approved provider status as a result of successfully completing the acquA accreditation and gaining entry onto the Register of Approved Providers. This will mean they:
This is only one method of procurement and it is described in the Code of Good Practice along with open tendering and closed (restricted) tendering.
The purchaser will deem an organisation to be the preferred provider in a situation where it provides a unique or specialist service where no other potential provider exists or when a contract is renewed with a preferred provider with no other providers involved.
The circumstances in which this model of procurement is used will be the exception and not the norm.
The review of contracts in October 2007 will highlight any organisations in this position. If it appears unlikely that accreditation will not be achieved by March 2008 commissioners may serve six months' notice of termination of the contract. Commissioners wrote in August 2006 and again in December 2006 to all those providers currently holding contracts and who had not begun the acquA accreditation process, to remind them of the new requirements and encouraging them to begin the process as soon as possible.
Like providers, the PCT and Council are working hard to ensure that new contractual arrangements are based on the principles and commitments in the Code.
The Code is being phased in and not all commissioning plans will have been published by April 2007. In this event, commissioners will seek to commission services based on the emerging needs analysis and principles. The procurement process and negotiation of contracts will be in accordance with the good practice in the Code.