Frequently Asked Questions
This page contains answers to questions about our Postal Services framework agreements.
If you are unable to find an answer to your question, please do not hesitate to telephone our Customer Service Desk on 0345 410 2222.
Why a Postal Service Framework Agreement?
All public sector organisations rely to varying degrees on the collection, transport and delivery of letters in their communications with citizens, internally, and with other public sector bodies. The public sector spends nearly £650 million (representing 10 per cent of the total UK mail market) per annum on post.
Historically Royal Mail has been the monopoly provider of letters as well as being the Universal Service Provider in the UK. However, since the Postal Services Act 2000, the mail market has been increasingly opened to other Service Providers. In January 2006, the final restrictions were removed and in effect no part of the postal market is now reserved for the Royal Mail alone, subject to an alternative operator having an operating licence from Postcomm.
In 2006 the NAO published a report, ‘Improving the Efficiency of Postal Services Procurement in the Public Sector’, which estimated that annual savings in excess of £31 million could be achieved across the whole public sector from improved efficiencies.
- Following key stakeholder endorsement from the Postal Services Forum (representation from CCG Departments and also from organisations from the wider public sector), Buying Solutions established a suite of EU compliant Postal Service Framework Agreements, for use by all public sector organisations. Organisations that utilised these framework agreements achieved savings of between 9 and 30%, with some organisations achieving 50%.
- The new generation of framework agreements, which went live on 10/08/2010, incorporate new developments in the market; such as Hybrid Mail and will continue to enable public sector organisations to achieve savings of between 9 and 30%.
Where can efficiencies be made in the procurement of Postal Services?
(a) Increase the use of price discounted “work share” products.
(b) Increase use of lower cost second class and products with longer delivery timescales.
(c) Undertake Further Competitions from the Buying Solutions Postal Services Framework Agreements which will result in lower cost products being provided for either the same or improved levels of performance.
(d) Reductions in the volume of “undeliverable” mail.
What are the recommended actions that Public Sector Organisations need to take to further improve their postal services performance?
Below is a summary of the recommended actions for Public Sector Organisations,
(a) Develop an integrated communication and commercial strategy.
(b) Develop capable and effective management structures for postal services.
(c) Use the appropriate procurement and supplier engagement practices.
(d) Aggregate demand and increase joint working wherever possible.
(e) Improve the accuracy and management of customer address data by use of external data files (such as the Postcode Address File)
(f) Select the appropriate mail products, balancing business requirements with cost and quality of customer service.
(g) Increase the availability and use of management information to improve postal efficiency and service delivery
2 - What’s on Offer
Buying Solutions Framework Agreements - What’s on offer?
The Framework Agreements offer the provision of postal services in order to ensure that EU compliant arrangements are available to the public sector. The Framework Agreements exist as a multi-source option, thereby providing choice and competition.
What services are available via the Framework Agreements?
The Framework Agreements offer an extensive range of postal services. The Agreements have been let in LOTS to provide clarity to customers selecting services. The LOTS are defined below;
| Lot | Description |
| Lot 1 Collection and Delivery | Collection from Contracting Body, delivery to addressee |
| Lot 2 Consolidation of Mail | Collection from Contracting Body of unsorted mail for sortation and delivery to addressee |
| Lot 3 Secure Mail | Collection from Contracting Body and delivery to addressee of mail items requiring secure delivery |
| Lot 4 Customer Direct Access | Contracting Body delivers Mail to Supplier for delivery to addressee. |
| Lot 5 Pre – sortation for Inbound Delivery |
Collection of unsorted inbound mail, sortation and delivery to Contracting Body |
| Lot 6 PO Boxes | Provision of numbered boxes for delivery of Contracting Body mail |
| Lot 7 Response Services | e.g. Business Response |
| Lot 8 Re-direction Services | |
| Lot 9 Undeliverables / Gone Aways | |
| Lot 10 Hybrid Mail | Provision of Hybrid Mail to include but not limited to the provision of software to facilitate the routing of data; the sortation of data to select the most economically advantageous delivery route; the accurate printing of items in the format agreed with the Contracting Body and the enveloping of those items for delivery to addressee. |
| Lot 11 Mail Consultancy | |
| Lot 12 Mail Audits | |
| Lot 13 Document Exchange | |
| Lot 14 Data Cleansing and Address Management |
Within each Framework Agreement there is the flexibility for an individual customer to agree a price to reflect its own operational mail volumes and circumstances, using the “further competition” approach.
What are the prices/rates?
The prices of the Postal Service offerings cannot be found in the online catalogue. The reason for this is that some of the suppliers could be potential customers of Buying Solutions and as such could view this information if it were published online, potentially giving them an unfair advantage over other suppliers. The pricing matrix can be requested from one of the Postal Services Team Members by emailing postalservices@buyingsolutions.gsi.gov.uk.
How long are the postal services Framework Agreements running?
Public sector customers are able to enter into a contract under the terms of the Framework Agreements at any time during the four year duration of the Framework Agreements. Public sector customers determine the duration of any call off contract and such duration may extend beyond the expiry of the Frameworks, if required.
3 - What you need to do
- STEP 1 – Can you change all, some or none of your current postal practices?
- STEP 2 – Do Royal Mail offer other products which you can use?
- STEP 3 – Is there an alternative supplier which you can use?
- STEP 4 – Establish your mail profile
- STEP 5 – Run a “further competition”
How do I establish my mail profile?
Buying Solutions has devised a Mail Profile Gathering template. This template is intended to assist you to gather information regarding your mail profile, in order to uplift into your Invitation to Quote (ITQ) document. Once completed, it can be used to advise Framework Agreement Suppliers of your postal requirements and will provide enough information to enable a “further competition” between all capable Buying Solutions Postal Services – Suppliers.
The information you will need to populate the Mail Profile Gathering template should be available within your organisation, perhaps speak to your accounts department, your post room or you can speak to your Royal Mail account manager who should be able to give you your spend information, including volumes.
It is worth noting that you will only need to compete a Mail Profile Gathering template for Lots 1, 2, 3, 4, 5, 6, 7, 10 and 13. It is not required for Lots 8, 9, 11, 12 and 14
You will find a downloadable Mail Profile Gathering template on the Postal Services publications web page.
What do I need to do to run a “further competition”?
In order to run a “further competition”, you will need to: (i) establish your Mail Profile; and (ii) identify all capable Framework Agreement Suppliers who can provide your service and send them an Invitation to Quote (ITQ).
Buying Solutions has devised an ITQ template which is intended to act as a guide to assist you to access the Buying Solutions Postal Suppliers. This template is not intended to replace your organisation’s own procedures, but may assist you during the “further competition” process, ensuring that Suppliers receive an ITQ that covers your requirements allowing them to provide you with a suitable response.
You will find a downloadable ITQ template on the Postal Services publications web page which will provide Suppliers with the information they need to provide you with a quote.
If you require further assistance with “further competitions” please telephone the Buying Solutions Customer Services Desk on 0345 410 2222 and ask to speak to a member of the Postal Services Team or alternatively email one of the team using the following address: postalservices@buyingsolutions.gsi.gov.uk
4 - General Questions
What are the benefits of using these framework agreements?
| Feature of framework agreements | Benefit to customers |
| Approaching the market in a joined up way | Approaching the market in a joined-up way enables suppliers to respond to Public Sector needs in a more holistic way
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| Pre-tendered agreements | Saving the customer time and process costs associated with a full procurement exercise
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| EU Compliance | Compliance with EU Procurement Directives |
| Pre-determined terms and conditions | Offers sound contractual safe guards |
| Competitive rates and discounts | Value for money assured |
| Choice of Reputable Suppliers | The customer has a number of reputable alternative sources of supply to choose from.
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| Access to framework agreements via the internet | Easy ordering and ability to quickly source requirements
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| Fixed rates | Easier forward planning and budgeting. Mechanisms are in place to enable price changes approved by the regulator to flow through to framework agreement pricing
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| Detailed MI reports available monthly | Enables customer to keep track of spend and performance levels
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| Benchmarking results available on website | Added assurance of best deal for customer and savings calculations made easier
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| Service levels and service credits
| Ability to monitor supplier performance against pre-determined criteria including collection/delivery times, accuracy of deliveries and MI provision
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| Guidance on implementation and change control
| Making it easier for the customer to switch to a new supplier
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What is Buying Solutions role?
Buying Solutions will seek to ensure that;
i. Suppliers perform to acceptable and agreed Service Levels;
ii. Stakeholders are actively engaged in the framework agreement management process and kept up to date via timely and relevant communications.
iii. Public Sector demand for postal services is understood and can be matched to the markets ability to satisfy that demand.
iv. Continuous improvements and regular benchmarking to ensure that government achieves value for money in its postal spend; and finally
1. Lead strategic reviews that will shape and influence the commercial direction of future postal service activities.
What is the cost of changing from Royal Mail to another supplier and will I get the same quality of service?
The internal costs involved with changing of a mail provider should be insignificant against the savings available otherwise the change is not recommended. The Postal Services team can assist you with your business case and there is plenty of information on the Postal Services webpages to help you put together your proposal. The Suppliers have been subjected to a rigorous procurement process in compliance with EU procurement regulations which ensured that only the best quality Suppliers came through the sift. To contact a member of the Buying Solutions Postal Services Team, please email postalservices@buyingsolutions.gsi.gov.uk or alternatively please telephone the Buying Solutions Customer Services Desk on 0345 410 2222 and ask to speak to a member of the Postal Services Team
I’m interested in making savings but am not sure I want to move away from Royal Mail, how will I know I will be getting a good service?
The Suppliers have been subjected to a rigorous procurement process in compliance with EU procurement regulations which ensured that only the best quality Suppliers came through the sift. For added reassurance there are pre-agreed service levels and service credits which have been applied to the framework agreement.
Many of the services available, particularly where suppliers are utilising a Down Stream Access (DSA) service offer a two day definite service at a lower cost to the Royal Mail’s services and savings may also be available if you want to stay with Royal Mail by changing the way you send your mail and utilising Royal Mail’s workshare products e.g. Mailsort.
I am a large mail user can I achieve better value for money by securing my own deal?
Suppliers have verified that the rates for these framework agreements are the best deal for the Public Sector and would encourage any customers who wish to run their own procurement to utilise the Buying Solutions Postal Services framework agreements. In some cases, due to the costs involved in submitting a tender, Suppliers have rejected an invitation to tender. The framework agreements offer compliance with EU regulations therefore eliminating the time and costs involved associated with local procurement, however these framework agreements are to be used on merit only and are by no means mandatory.
I only send small volumes of mail, locally, are there any savings to be had for me?
Yes. We would recommend you use the consolidation services (LOT 2) which are available on the framework agreement. This service is for small volumes of mail. The Supplier will collect mail and consolidate it with similar items to achieve the discounted rates. For more information on LOT 2 - consolidation service visit the online eCatalogue.
I want to trial one of the services under the Postal Services framework agreement. Can I run a pilot? If so, how do I go about arranging this?
You would need to identify all capable Suppliers and run a “further competition”. Once you have selected your supplier you can request a pilot directly to them and negotiate e.g. length of pilot, where the pilot will take place, key performance measures etc to take this forward.
Can I agree my own KPI’s with the supplier to suit my needs?
The pre-agreed set of KPI’s are an indication of the levels of performance the Suppliers should adhere to, these can be refined to put emphasis on areas which your organisation may deem important.
How long does it take to start using one of the services?
The framework agreements are available for immediate use. It depends on how organised you are as a customer and aware of your mailing profile. It is important that before you undertake a further competition, you have established your mail profile, as this will provide an overall indication of volumes and service scope to the suppliers to enable them to provide you with firm and fixed prices for your particular requirement. The team also advises that you consider the complexity of your requirement when deciding how long to allow suppliers to respond to your Invitation to Quote. It may be that suppliers approach your organisation to undertake a site visit to further assess your requirement and if you have not allowed sufficient time in your ITQ for this, you may find that suppliers do not respond as they feel they have not got time to prepare a suitable reply. As a guide we would suggest a minimum of 6-8 weeks for less complex specifications. If you are unsure or would like the Postal Services Team to assist you, please do not hesitate to contact us and we will happily offer you some guidance on timescales.
Can private companies access the postal services Framework Agreement on our behalf?
Yes.
How can I measure savings?
One of the ways to measure savings if you have decided to change your current mailing through Royal Mail to an Alternative Supplier is to then benchmark your new pricing against the pricing you would have been normally paying if you had continued using the Royal Mail service. Buying Solutions also employs independent Benchmarking companies to do a price comparison on all its products and services. This is performed on a six monthly basis to ensure we provide the best possible deals for the Public Sector.
What if I have a problem with the Supplier?
There is an escalation process in place, if you are not satisfied with your supplier, under the dispute resolution clause in the framework agreement terms and conditions. The first step however would be for you to try to resolve the problem with the Supplier yourself. If this cannot be satisfied then you must raise your problem with the Postal Services Category Specialist or the Postal Services Senior Category Specialist who will then speak to the Account Manager (Supplier) and attempt to resolve the problem within 10 working days. If this is not resolved at this point the problem will be escalated to the Category Manager who will speak to the Senior Manager (Supplier) and has 10 working days again to resolve the issue.
I don’t understand what’s on the website, who can I speak to?
There is a wealth of information on the Buying Solutions Website to assist you in selecting the products and capable suppliers available under the framework agreements.
Buying Solutions also has a dedicated team of industry experts who are here to assist you with any queries/enquiry you may have in relation to the Postal Services framework agreements. The team has over 14 years experience of Postal Services, so please don’t be afraid to contact them for advice. Please telephone the Buying Solutions Customer Services Desk on 0345 410 2222 and ask to speak to a member of the Postal Services Team, who will be happy to provide guidance or alternatively email a member of the team at postalservices@buyingsolutions.gsi.gov.uk.
Can my department / organisation reclaim VAT?
Services provided by Royal Mail are exempt from VAT whereas products and services provided by other operators attract VAT at the full rate of 17.5%.
Under the terms of the Treasury Direction on the recovery of VAT on contracted out services, the government departments and national health bodies specified in list 1 of the Direction are able to recover any VAT they incur in respect of postal services. Heading 13 in list 2 of the Direction covers 'Collection, delivery and distribution services' and this includes private postal services.
Accordingly, there should be no negative VAT impact to Public Sector purchasers who are considering using providers other than Royal Mail. The way in which VAT is treated within the purchaser's organisation may need to be reviewed further advice and guidance should be sought from your local Accounting Officer.
Non departmental public bodies and other public sector bodies which are not covered by the Direction but are registered for VAT will need to confirm their VAT recovery position with their local VAT office. For those bodies not registered for VAT there can be no VAT recovery.
NOTE
Local Authorities are covered by a VAT refund mechanism covered by section 33 of the VAT Act 1994. This essentially enables them to recover the VAT on the activities funded by local taxation (to meet a promise by the government of the day that the introduction of VAT would not result in an increase of expenditure funded by rates - now local taxation.)
Schools that are run by Local Education Authorities are also covered by this section.
Non HE/FE colleges and sixth form colleges are NOT covered by section 33 or any other VAT refund mechanism (the normal VAT rules apply to them) but we understand that the LSC (the funding body) does take non-recoverable VAT into account when determining funding. That said, DfES recognise that there is a funding gap between LEA and non-LEA institutions although how much the difference in VAT treatment contributes to this (if at all) has not been quantified.
Private fee-paying schools are again subject to normal VAT rules and as suppliers of education which is exempt from VAT are limited in their VAT recovery. Accordingly we would imagine that their fees would be set at a level to take account of this.
[Note: Although this information regarding VAT is accurate to the best of our knowledge, public sector bodies should seek advice from their own advisors.]