Vehicle lessors have welcomed a new framework for the leasing of commercial vehicles (CVs) to public sector users, with many of the largest players in the market now participating in it.
The new Fleet Management Framework Agreement for CVs has been developed by the Buying Solutions arm of the Office of Government Commerce (OGC), a division of HM Treasury.
It is modelled on the Pan-Government Car Leasing Framework which, although available to all government departments and agencies, was developed by the NHS Purchasing and Supply Agency (PASA) with the needs of NHS hospital trusts principally in mind.
These arrangements work on the same principle as price comparison websites for private sector consumers. Potential lessees obtain quotes based on their specified parameters for vehicle types, hire periods and service packages, on the basis of pre-tendering by lessors.
The new CV framework will run for two years, with an option to extend for a further two years. The car leasing framework in its present form, including car-derived vans, is running for three years from August 2007, with an option to extend for a further year. The new framework will cover requirements for all types of CVs used in the public sector. These will include emergency vehicles, vehicle conversions and trailers.
For public sector lessees, one of the advantages of using the new framework agreement concerns compliance with European competitive tendering laws for public sector purchasing. Because the suppliers have pre-tendered, there is no need for the costly and cumbersome procedure of inviting tenders for each contract through notices in the Official Journal of the European Union (OJEU).
A “restricted procedure” notice was placed in OJEU for the framework agreement as a whole before its inception. Following a pre-qualification stage, suppliers were then invited to tender with their terms for various forms of lease or fleet management facilities including contract hire.
Apart from the NHS, government departments and agencies supporting the CV framework at the outset include HM Revenue & Customs and a number of central government security agencies (Home Office, Ministry of Justice, UK Border Agency and HM Prison Service).
Rob Kerridge, head of business development for Artegy, the contract hire and fleet support services arm of BNP Paribas Lease Group, said: “We hope to see local authorities eventually making use of this framework as well as NHS trusts.”
The CV framework has been widely welcomed in the vehicle leasing sector.
Stuart Walker, brand director for LeasePlan’s Automotive Leasing arm, said: “We have public sector clients for all types of vehicle. CV renewal contracts tend to come on a more one-off and less regular basis than for cars. The framework will make ordering much easier for clients because of the streamlined OJEU compliance aspect.”
Ken Hunnisett, director of Cranmer Lawrence, commented: “As a long-standing provider of operating lease finance to the public sector, we are very pleased to have been chosen as an approved supplier under the framework. It gives the opportunity for ‘best of breed’ asset financiers and maintainers to act in partnership in direct competition with contract hire providers. In recent years the great majority of ambulances have been financed in this way, to the demonstrable benefit of the NHS trusts.”
Mark Pedley, head of public sector sales at ING Car Lease, said: “The public sector is increasingly important to us, and the opportunity to finance light CVs through the new framework is having an unexpectedly positive impact on our competitive position in car fleets. Despite the tough economic conditions and prospective cuts in public spending, we see a bright future for contract hire and leasing in the public sector.”