What is syndicated procurement?
Syndicated procurement typically involves a ‘cluster’ of agencies aggregating their respective requirements (needs) and collectively going to market for common services and pricing.
It may also involve an agency or agencies anticipating collaboration and including a Common Use Provision (CUP) clause within the resulting contract, to allow other agencies to join the contract later.
The benefits of syndicated procurement
The potential benefits to agencies of effective syndicated procurement can be significant.
This collaborative procurement often leads to a more favourable contract (price, benefits, and features) being negotiated due to the aggregation of common procurement requirements.
Productivity gains also result from reduced procurement effort that comes from agencies collaborating on new arrangements or joining existing ones, at a later stage. For example, an agency that would otherwise need to go through a full tender process, avoids this activity by joining an existing syndicated (with CUP clause) arrangement for the same goods or services.
Syndicated procurement also has wider potential benefits:
- A more strategic approach to procurement across government
- Reduced tendering costs and process efficiencies for suppliers
How to establish a syndicated contract
If you are considering putting in place a syndicated contract, this Guide to Syndicated Procurement [867 kB PDF] is essential pre-reading.