East Durham College
Policy Document
Policy Number
Policy Grouping
Policy Document Title
Supply Chain Fees and Charges
(Subcontracting) Policy
Author / Reviser / Owner
Victoria Barker
Date of Current Version
14/06/2013
Review Date
June 2014
Impact Assessed
Yes
Approved By
Committee
No
Date
Document Control
This document is issued and controlled by the Quality Team and may only be modified by the designated
group after proposed modifications have been accepted by the College Management Group
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The latest version of the procedure will be maintained on the College Extranet
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Scope
To outline the fees and charges of supply chain activity using Skills Funding Agency Funds provided by East
Durham College to its subcontractors.
Purpose
The purpose of this policy is to demonstrate how East Durham College will seek to optimise the impact and
effectiveness of service delivery within its supply chain, identify costs incurred and provide transparency to
all for the allocation of Skills Funding Agency Funds to third parties for subcontracted provision.
Comment
East Durham College have signed the Common Accord, demonstrating their commitment to ensure that the quality
of delivery within subcontracted provision is subjected to the same level of scrutiny as direct delivery, and that
systems and processes are fair for all involved, and will be continually assessed and improved.
Policy statement
East Durham College have identified the following reasons for subcontracting activities funded by the Skills
Funding Agency:
 To Capacity Build both for college and subcontractors towards gaining direct contract
 To support local economy and skills
 To engage with new markets and add breadth to existing curriculum offer (expand and diversify
provision)
 To maintain delivery of niche provision
 To ensure cost efficiency
 To deliver a high-quality learner experience which is responsive to learners and employers
 To contribute toward the Skills for Growth Strategy
 To work with organisations that are unable to fund activities under their own contracts due to the
introduction of “Minimum Contract Levels” in 2011
Selection of Subcontractors
East Durham College operate an annual Approved Supplier List, which adheres to the Common Accord.
This states that lead providers “will at all times undertake fair and transparent procurement activities,
conducting robust due diligence procedures on potential subcontractors to ensure compliance with the
Common Accord at all levels”.
In order to be considered for a subcontract arrangement, all prospective organisations must have
completed the Application for Approved Supplier List and have successfully passed East Durham College’s
Annual Due Diligence process. This includes but is not limited to: organisation overview; structure;
performance evidence; current offer; compliance with legislation; mapping to East Durham College’s
Stategic Aims and Objectives; Quality Assurance; Financial Health; RTO Approval; References; staff
capacity and capability checks; site visits.
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As per the Funding Rules, any organisation that holds aggregated contracts (or is seeking contracts) worth
£100,000 or more, must have successfully completed the SFA Due Diligence Gateway and be listed on the
Register of Training Organisations prior to any contracts being issued.
For further information on the selection of subcontractors, please refer to the Approved Supplier Procedure
(9.1.7)
Contribution to improving quality of teaching and learning
To ensure that the activities of subcontractors are aligned with the principles of best practice within the
sector, all subcontractors will be expected to complete the following activities:
 Teaching and Learning Observations
 Regular and meaningful CPD sharing between organisations/ departments
 Annual Self Assessment Report and Quality Improvement Plans completed, with regular monitoring
activities completed and reported in order to make judgements on effectiveness
East Durham College will also complete activities as above in order to support organisations and quality
assure provision.
Management Fee Retention
Funding retained by East Durham College in the form of a Management Fee is relative to the duties and
services that are provided to all subcontractors. Included in the fee, are the following elements:
 Contract management
 Data management and input costs
 Finance processing costs
 Quality monitoring costs including travel
 Teaching and Learning Observation team
 CPD
 SAR and QIP support
 Monthly performance reviews including travel
 Support visits including travel
 Internal Verification/ Moderation duties where appropriate
 Registration and Certification where appropriate
 Support for newly formed training organisations wishing to become own centres with own approvals
 Sharing of good practice
 Premises fee where appropriate
 Learner consultation sampling including travel
 Paperwork support
 Funding support and advice on eligibility
This list is not exhaustive, and the costs incurred by East Durham College will vary depending on the Risk/
Need of each individual subcontractor.
East Durham College typically charge between 25% and 40% for management fees. This will be agreed
with all subcontractors prior to the issue of any contracts.
Support
As detailed above, East Durham College provide significant support services to their subcontractors in
order to ensure that subcontracted provision is delivered effectively, efficiently and with the same
commitment to quality as its’ internal provision.
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Payment Terms
All subcontractors receive a monthly reconciliation against performance. This ensures that no
overpayments or underpayments are made to any subcontractors which may cause difficulties in the future.
A final reconciliation payment is made to subcontractors on production of certificates, and achievement of
national averages for all courses within their contract.
Supporting Documents & Records
Approved Supplier Procedure (9.1.7)
Please feed back to the Quality Team any constructive suggestions on how any
aspect of the procedure may be clarified or improved
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