Right of WayTraining capability for transport authorities
All courses

COURSE 08 - DELIVERY AND IMPROVEMENT

Contractual and Procurement Strategy

Decide what you will buy, and how you will buy it

Procurement can feel like the steepest climb in bus reform. The sums are large and the rules are strict. The contracts you sign will run for years after the people who wrote them have moved on. If that feels daunting, you are in good company. Here is the reassuring part: you do not have to work it all out at once. Bus use outside London is still well below its 2009 peak, and it was falling before the pandemic. A contract that pays only for miles run gives an Operator no reason to carry more passengers. The choices your Authority makes now will shape its network for a long time. This course takes your team through those choices one at a time. What will you buy? How will you divide the network into contracts? What will you pay Operators to do? In what order will you go to market? Each answer builds on the one before. We work with your own network, Operators and contracts, which you share with us in a short form beforehand. By the end of the day, your team will have the start of a draft procurement strategy to build on.

Enquire about Course 8

How the day works.

How the day works

01

Decide what service your passengers will get

Every procurement starts with a passenger. Your team will compare franchising and Enhanced Partnership side by side. It will then follow one passenger through a week of journeys with two Operators. She has two apps and pays two different fares on the same road. When her bus does not turn up, she is not sure whom to call. Is that acceptable for your passengers? Your team decides, and that decision shapes everything that follows. An Enhanced Partnership scheme can set standards for vehicles, tickets, information and branding. It cannot set fares, bring fare revenue to your Authority or stop a route being withdrawn on notice.

02

Map everything you will buy

Bus operations are only one part of what you buy. Your Authority may also need: buses and depots a managed ticketing service a marketing agency to grow passenger numbers a customer contact platform performance reporting Each contract has its own timeline, and some affect staff who may transfer under TUPE. If you get the order wrong, Operators cannot price their bids. Your team will map what must be in place first.

03

Draw your lots

This is the most hands-on part of the day. Large Authorities running franchises have divided their networks in different ways. Some built contracts around depots. Some capped how many areas one Operator can win. Many kept smaller contracts back for smaller Operators. Your team will draw lots for its own network and count the contracts it would have to manage. It will also work out what that client team would cost. You will look at how to keep small and medium Operators in the market, which the franchising guidance asks every Authority to explain.

04

Decide what you pay Operators to do

Start with the behaviour you want, such as punctual services or more passengers. Then look at how the payment rewards it. Gross cost contract: your Authority keeps the fares and carries the risk if they fall. Net cost contract: the Operator keeps the fares and carries that risk. Costs move too, so your team will decide how payments rise with wages, fuel and energy. Some large Authorities own their buses and depots. That control has real value, but on its own it does not bring more passengers on board. The group weighs the two and asks a simple question: if fare revenue falls, can your Authority still pay?

05

Choose your route to market

Your team will compare the procedures available under the Procurement Act 2023. These include the competitive flexible procedure and a dynamic market that Operators can join over time. The law allows a contract to be awarded without competition in a few tightly limited cases: the first franchise contracts some small contracts contracts with a company the council controls You will see what each route is for and when it might apply, without getting lost in the detail. Councils in England can again set up their own bus companies, and the group looks at how such a company can win work. Finally, your team sets the order in which it goes to market. It also agrees the checks to pass before each launch, from depots through to finance sign-off.

What you leave with

What your team will leave with

A customer position. Whether your Authority accepts a different service from each Operator, and what follows from that choice.
A procurement map. Every contract your Authority will let, from bus operations to ticketing, marketing and customer contact. It shows who buys each one and when.
A lot plan. How your network divides into areas and contracts, and the mix of large and small contracts. It also shows how many Operators your team can manage, and what that team will cost.
The behaviour you will reward. What your contracts pay Operators to do, and who carries the risk if fares or costs change. It also tests whether the plan fits your budget.
A route to award. The procurement procedure for each contract, including the few cases where a contract can be awarded without competition.
A procurement sequence. The order in which you go to market, and the checks to pass before each launch.

Together these form a draft Procurement Strategy Record, with separate chapters for franchising and Enhanced Partnership. Nothing in it binds your Authority. It is a first draft for you to test, refine and own.

Who should attend

Who this course is for

This course is for transport authorities preparing to franchise, and for those building a stronger Enhanced Partnership. It works best with six to ten people. They should come from the franchising or bus reform team, procurement, legal, finance, network and service planning, commercial, customer and contract management.

Franchising or bus reformProcurementLegalFinanceNetwork and service planningCommercialCustomerContract management

If you can, bring the officer who manages your tendered bus contracts. They know your local Operators, what each contract costs and where past tenders have struggled. Their knowledge makes the day far more useful. Not yet sure whether franchising or an Enhanced Partnership is right for you? That is fine. The day works for both, and your team can sketch each route side by side.

BUILD THE COURSES AROUND YOUR PLAN

How Course 8 fits with the wider programme.

Course 1 sets the delivery route. Course 4 decides who provides the buses and depots. Course 5 decides who holds the fare revenue, and Course 7 decides who fits and owns the systems on each bus. Course 8 brings those decisions together into contracts and a plan for going to market. Course 10 then takes over. It turns the behaviour you chose to reward into a performance regime for the live contracts.

The course is core for Authorities preparing to franchise. For Enhanced Partnership Authorities, the day concentrates on three things: the customer decision, the services your Authority buys centrally and the tendered services it supports. If your Authority is improving services through its BSIP alone, the day gives a lighter introduction to what a BSIP covers.

FranchisingEnhanced PartnershipBSIP-led
01 Strategy, Shaping Public Transport
02 Programme Design and Governance
03 Target Operating Model
04 Network Design and Specification
05 Ticketing Strategy and Specification
06 Customer Strategy and Engagement
07 Intelligent Transport Systems Specification and Integration
08 Contractual and Procurement Strategy
09 Artificial Intelligence Enablement across Transport Change
010 Contract Management and Improvement
LegendCore to your transport decisionRelevant; adapt to your scopeLight touch

Choose courses for your delivery route

Courses 1, 3, 6 and 9 can support your Authority whichever delivery route you choose. If you have not decided on a route yet, contact us and we can discuss how these courses fit your plans.