Supply Chain Fees and Charges Policy 2016/17


Policy Aim
This document aims to provide consistency of approach and transparency to Sysco Business Skills Academy Limited’s (SBSA) supply-chain fees and charges in relation to its provision subcontracting.
The policy herein is disseminated to all sub-contractors at initial point of contact and is in the public domain via our website.
This policy will be reviewed annually taking into consideration contemporary Skills Funding Agency guidance.
Responsibilities
SBSA holds full accountability for the delivery of the contract which cannot be assigned to subcontractors; all subcontractors comply with the Agency Funding Rules documents and any future updates in all matters regarding the delivery of the provision.
The management of subcontractor performance is based on level of approval and risk status. SBSA will monitor, review and evaluate in order to inform corrective, preventative and improvement actions and manage risk through contingency planning. If underperformance is identified, it will be addressed through measured and targeted action plans backed by support and development.
In partnership with subcontractors, SBSA will operate in the spirit of support, co working and transparency and will also endeavour to learn from subcontractors, recognise and share their good practice where appropriate.
Definition of Terms Standard Management Fee – this fee is determined by the size of the subcontracted partnership contract (as per Maximum Contract Value figure), and is the fee applied to all such contracts to account for standard costs incurred by ourselves through its management of these contracts.
Additional Management Fee – sometimes there will be a need to apply an additional management fee to offset additional costs incurred for the management of individual subcontracted contracts (this fee will be determined on a contract-by-contract basis).
Subcontracting statement SBSA recognises the need to offer as diverse a range of provision as possible, in as flexible and cost effective a way as possible. By working in partnership SBSA is able to;
  • Offer niche provision
  • Engage with the wider community, increasing wider participation
  • Offer flexibility by delivering provision at times and venues convenient to learners and employers
  • Be responsive to learner and employer requirements
  • Ensure greater cost efficiency

Continuous Quality Improvements SBSA are committed to continual improvement in teaching and learning, both in its own direct provision and in its subcontracted provision. A range of approaches are employed in order to do this, such as robust evaluation provision and Self Assessment Reports.
In terms of provision subcontracting specifically the following processes are in place to help monitor quality of provision, and actively improve quality on an on-going basis:
  • A robust schedule of Quality Assurance Audits that are carried out throughout the year
  • Regular management meetings between SBSA and all its subcontractors (with a minimum of one management meeting per term)

Risk assessment
A series of factors are utilised to produce a risk-rating framework, via a red, amber and green (RAG) system for each factor. Although the list is by no means exhaustive, the factors below are used to develop and improve our evaluation of risk.
Risk factor checklist:
  • Duration of the contract
  • Value of the contract
  • Healthy and safety/equal opportunities
  • Non-completion, leaver or early leaver rate
  • Supplier staff turnover

Once these factors (and others) have been identified via pre-contract due diligence, the RAG system will be agreed.
Contingency Planning
In terms of contingency:
The performance management and support measures ensure processes are in place, in case of sub-contract failure, a high level of due diligence is maintained over sub-contractors, in order to endeavour to identify early signs of organisational failure.
Contingency plans outlining the process to be taken in the event of a breakdown in contracting relationships would include guidance on the continuity of learning, communication to learners and employers, and TUPE guidelines for staff.
Fees Standard Management Fee – This fee is applied to all subcontracted contracts, and is the proportion of SFA funding retained SBSA to cover standard costs incurred through its management of these contracts. These costs include:
  • Administration
  • Quality assurance
  • MIS functions relating to the submission of funding claims to the SFA
  • Provision of management meetings
  • Provision of a dedicated Account Manager
  • Provision of professional advice regarding SFA/EFA funding matters
  • Due Diligence support, guidance and checking

Additional support may be discussed, agreed, documented and delivered which would be charged at a rate no greater than 5% of the national rate
Payments to the Supply Chain.
Payments will be made to the Subcontractor according to the schedule for submission and payments identified in the Service Level Agreement and the Subcontractor will be paid monthly based on values in the PFR less the predetermined management fee.
PLEASE NOTE THAT THE STANDARD MANAGEMENT FEE WILL BE APPLIED AT 15% OF THE NATIONAL RATE