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PDM Newsletter

Supply Chain Fees and Charges Policy


1.    Introduction

1.1    As an SFA Prime Provider PDM must publish a supply-chain fees and charges policy on our website before entering into any Sub-Contract Agreements for the 2013/2014 academic year.

2.    Scope

2.1    This policy statement details how PDM will apply fees and charges to Sub-Contract Agreements with organisations for the delivery of training on the Company’s behalf for 2013/14 and is published in line with SFA requirements stated in Funding Rules 2013/14.

3.    Reasons for Subcontracting

3.1    PDM subcontracts for one or more of the following reasons:

3.1.1    To deliver niche provision – building on a subcontractors’ extensive and focused experience in the specialist areas.

3.1.2    To capacity build - help PDM to respond flexibly to changing market demands and emerging opportunities.

3.1.3    To engage with new markets - provide access to, or engagement with, a new range of customers.

3.1.4    To ensure revenue / margin protection - working with sub-contractors to explore and learn about new frameworks or sectors prior to investment in resources.

3.1.5    To ensure greater cost efficiency - to run certain programmes where it would not be viable for PDM to build up in-house resources and expertise.

3.1.6    To provide good development opportunities for both the College and its Subcontractors, to share good practice and new ways of working.

3.1.7    To temporarily expand provision to meet a short term need.

4.    PDM’s Contribution to Improving the Quality of Teaching and Learning

4.1    PDM ensures that Subcontractors are included in the Company’s Quality processes and procedures and are guided and supported by the PDM to fully comply with the Company’s Quality Standards.

4.2    PDM provides training to Subcontractors on completing the Self-Assessment Review and the Quality Improvement Plan. Any actions arising are addressed in cooperation between the Company and the Subcontractor.

4.3    Subcontractors are required to hold course centre approvals in their own right and fully liaise with the awarding bodies. PDM will regularly review Standards Verifier reports submitted by Subcontractors and monitor any follow-up required.

4.4    PDM provides training and documentation on the Company’s Quality and Management System to the Subcontractor. PDM regularly validates the outcomes of Subcontractors’ own quality monitoring processes.

4.5    PDM expects the Subcontractor to have a plan for the Observation of Teaching and Learning for its staff. PDM’s Programme Quality Manager conducts regular sample OTLs on the Subcontractor’s staff and provides feedback.

4.6    PDM undertakes regular quality assurance monitoring visits to check learner files, schemes of work etc

5.    Range of fees retained

5.1    The typical percentage range of fees charged by PDM is between 15 to 25%, dependent upon the level of risk. This management fee is deducted from the SFA rate based on the funding income received by PDM, derived from the published data in the PFR (Provider Funding Report).

5.2    The management fee is calculated by assessing a number of risk factors derived through the due diligence process that PDM requires all potential subcontractors to undergo. PDM requires all potential subcontractors to complete a comprehensive Pre-Qualification Questionnaire (PQQ) and from this the following risk factors are assessed:

•    If the potential subcontractor is registered on the Register of Training Organisations

•    Anticipated demands of the contract on the PDM’s resources.

•    Financial standing of the Subcontractor.

•    Proven track record of the Subcontractor with regard to meeting success and funding targets.

•    Contract size with regard to both funding and learner numbers

•    Provision meets priority needs of local / community or sector priorities

6.    Support for Subcontractors

6.1    In return for the management fee charged by PDM, Subcontractors will receive:

•    Designated points of contact and support from a senior manager

•    Advice and guidance at pre-contract stage.

•    Regular review meetings with progress reports.

•    Specialised meetings and workshops as relevant

•    Regular monitoring visits with detailed feedback identifying good practice and areas for improvement.

•    Induction and audit compliance training.

•    Quality training including preparation for Ofsted inspection; writing of SARs and Quality Improvement Plans

•    Ongoing administration support including in-depth checks of evidence submitted and regular feedback on issues identified.

•    Input of induction documentation submitted.

•    Submissions of data to funding organisations.

•    Regular financial reports to inform invoicing.

•    Ongoing data checks and support to resolve data queries.

•    Ongoing support to address any areas for improvement.

7.    Reason for Differences in Fees Charged

7.1    Fees charged to individual providers may differ depending on the calculation of management fee as specified in 5.1.

8.    Payment Terms Between PDM and its Subcontractors

8.1    Payments are made on a monthly basis at the end of the following month in which the activity is successfully processed and uploaded to the SFA by PDM subject to the terms and conditions specified in the Sub-Contract Agreement.

8.2    Payments are made based on the SFA value provided in the PFR received monthly by PDM from The Data Service, less the management fee as published in the Sub-Contract Agreement with PDM.

8.3    After each month end, the College will send monthly financials to Subcontractors, confirming the invoice amount.

8.4    Invoices are payable 30 days from the date of issue.

8.5    Details of any rights by PDM to withdraw, reduce or withhold funding are published in the Sub-Contract Agreement and relate to the protection of SFA funds and not to the benefit of PDM.

8.6    Payments are made by BACS.

8.7    PDM expects Supply Chain members to fully engage in assessing the accuracy of payments and therefore have a responsibility to review their monthly financial reconciliations to identify any inaccuracies.

8.8    Supply Chain partners are responsible for all registration costs and any associated costs of maintaining Direct Claims Status with their awarding bodies.

9.    Policy dissemination

9.1    This policy will be disseminated to current subcontractors via email and a website link. All potential subcontractors will be made aware of the policy as part of the PQQ and Due Diligence process.

10.    Policy review

10.1    This policy will be reviewed at least annually and in addition in-year as needed to reflect any changes in SFA funding rules.

11.    Policy publication

11.1    This policy will be published on the PDM’s website.