Negotiating better contract terms in the public sector

Published by Paul Hamilton on

This was an interesting case because our client was a public sector body with its own LGPS fund, but we were required to negotiate better contract terms for the bidders. 

It shows the benefit of the commercial focus that we can bring to the public sector environment.

The public sector body was outsourcing work for the first time and it was a very large contract - around £1bn in value. The body therefore had two roles to play:

  1. as awarding body in respect of the contract, they wanted to get the best value contract possible; and
  2. as administering authority for the pension fund, they needed to ensure that the pension scheme was not prejudiced by admitting another employer.

Initially, advice covering both aspects was taken from the fund actuary, but it became apparent that the contract bidders were not happy with the terms being offered.  We were appointed to provide advice to the awarding body on what terms to set for the incoming Admission Body (contractor).  We were able to agree substantially different terms with the fund actuary, which made the process of gaining admitted body status much more straightforward for the contractors, and therefore significantly reduced the price that our client needed to pay for the contract.