Sub-contracting and Management Fees Policy

Our commitment

Swift will ensure that all provision funded through its direct ESFA and/or DfE contracts, whether delivered by Swift or a sub-contracting organisation will provide an excellent learner experience and represent good use of public monies.

Objectives

This policy provides transparency for all subcontractors, funding bodies and other associated parties or individuals regarding the procurement, due diligence process, support and charging rationale related to sub-contracted provision using Swift’s own direct contract.

1) Scope

This policy covers:

1. Rationale for sub-contracting
2. Procurement
3. Due Diligence Process
4. Contract Agreement
5. Management Fee Policy
6. Typical Management Rates/Calculations
7. Support Provided to sub-contractors
8. Contingency
9. Payment Terms
10. Communicating This Policy
11. Policy Review
12. Policy Amendments

2) Key Contacts

• Greg Morrall- Managing Director
• Mark Darby – Quality and Compliance Director
• Jack Edwards – Operations Director
• Tracy Laight – Finance Manager

3) Responsibilities

• Mark Darby - Overall responsibility for the quality assurance of sub-contracted provision, performance, and relationship management
• Mark Darby - Overall responsibility for contract negotiations/due diligence
• Mark Darby - Compliance of learner records and data

A) Rationale for Sub-Contracting

Swift utilises subcontractors to compliment delivery by providing expert training within the industry to support learning activities. Swift’s subcontracting will:

1. Enhance the opportunities available for learners
2. Fill gaps in niche or expert provision
3. Provide access to high quality training facilities

Delivery partners will only be contracted under a subcontract arrangement where Swift’s due diligence determines that the subcontractor has the capacity to deliver quality training which compliments Swift’s high-quality standards in line with all regulatory requirements including Ofsted and the ESFA.

B) Procurement

Procurement of subcontractor services will usually be in response to requests/approaches made by the potential contracting organisation to Swift. If additional procurement of sub-contracting services is required, this will be by invitation only and contracts shall be awarded based on an approached organisation’s suitability, track record and capacity to deliver the service.

C) Due Diligence

Swift has a formal due diligence process as follows:

1. An initial discussion between a senior manager of the potential sub-contracting organisation and the Quality & Compliance Director to ascertain provision type.
2. Agreement to progress onto the due diligence stage confirmed by an Senior Leadership Team member.
3. Issue of the due diligence document for completion by the potential sub-contractor.
4. Receipt of the completed due diligence document and supporting evidence.
5. Request for references made by Swift.
6. Review of due diligence information (financial accounts) by Senior Leaders and members of the Finance Manager.
7. A risk analysis conducted and documented collectively by the personnel above.
8. Review of references obtained
9. A recommendation made to the Senior Leadership team by the Quality & Compliance Director
10. A decision is agreed and confirmed by the Senior Leadership Team
11. Potential sub-contractor to be informed of decision

E) Management Fee Policy

Swift is committed to ensuring that the maximum amount of funding possible is passed on to our subcontractors to enable the best possible learning experience to the learner. The percentage of funding retained by Swift is founded upon the basic requirement to cover the costs associated with the management of subcontracted provision along with an appropriate level of mark-up on such costs. The costs will vary according to the type of provision, the deemed risk of the provision and data processing/maintenance costs. These costs include but are not limited to the following considerations:

• Direct costs of relevant personnel and their teams as detailed in section 3 ‘responsibilities’.
• Pro-rata costs of any software licence costs resulting directly from the additional data-management required for sub-contracting activities.

F) Typical Management Rates and Calculations

Due to the variety of permutations as to how the subcontract agreement is constructed, it is the intention that management fee rates will be a maximum of 20% of the contract value.

Eligible and ineligible costs are determined by current ESFA guidance.

Our published subcontracting activity and payments will detail the costs breakdown, showing the amount paid against the eligible costs. The cost breakdown will be in line with the funding rules against eligible and ineligible costs. Further detailed breakdown can be made available upon request.

G) Support provided to Sub-Contractors

The following support and facilities will be made available to Sub-contracting organisations at no additional charge to them:

1. Inclusion in CPD and other internal Swift programmes, as relevant and appropriate
2. Sharing of relevant information and publications/updates from the ESFA and OFSTED made available to Swift
3. Advice and assistance as necessary in order for Sub-contractors to maintain a self-sufficient and effective ‘continuous improvement Strategy and associated working practices, including the Self-Assessment Process

H) Contingency

Should a contract cease with any of Swift’s subcontracts a contingency must be in place to ensure learners on programme are not disadvantaged in any way.

In this event, any learners on programme remain the responsibility of Swift as the lead provider and therefore, are responsible for finding alternative arrangements for the completion of their programme.

A subcontract contingency plan defines the options available in the occurrence of a termination of the contract in such situations as outlined in the plan.

The plan is intended to enable a quick and smooth transition for all learners involved to cause minimum disruption to their programme.

In both scenarios, Swift will appoint a senior manager to oversee the transition. This role will include liaising with all external stakeholders, learners, employers, ESFA, awarding bodies and EPAO (where applicable). They would also be responsible for ensuring Swift’s internal departments support the process, which includes compliance, quality, and finance.

The main scenarios to consider are:

• Lead provider/subcontractor needs to withdraw from a subcontract agreement.
• Subcontractor goes into liquidation or administration.
• Full details of Swift’s contingency plan can be made available upon request.

I) Payment Terms

Swift recognise the impact that cash flow has on smaller organisations and will always endeavour to ensure that payment for provision is made as soon as is practical after delivery has taken place.

Swift payment schedule is as follows:

Event	Date/Deadline	Responsibility
Funding report released by ESFA/DfE	Approx. 10th day of each month	ESFA/DfE
Calculation of funds to be passed to subcontractor	Within 3 days of above	Swift
Invoice supplied to Swift	Within 7 days of above	Sub-contractor
BACS payment to Subcontractor	Within 5 days of payment being received from ESFA/DfE	Swift

J) Communicating this Policy

This policy is published on the Swift website. Potential subcontracting organisations will be signposted to this policy prior to any contract agreement.

K) Policy Review

This policy will be reviewed annually in June. Additional reviews and updates are completed as required.

L) Policy Amendments

We reserve the right to change the policy in particular instances where the policy is deemed to be unsuitable and without prior warning.

This version of the policy is effective from June 2024.

Gregory Morrall, Managing Director

Swift API Limited 26/06/2024

Date for next Policy review 26/06/2025