1. Rebecca Rhodes, Senior Associate, UVAC r.rhodes@bolton.ac.uk
SUBCONTRACTING and the Subcontract Template & CONTRACTING with EPA Organisations and the EPA Contract Template
Rebecca Rhodes, Senior Associate, UVAC

2. Agenda Subcontracting Purpose and Mindset Subcontracting Rules
Subcontractor Agreement Template
Subcontractor Management
EPA Contracting Purpose
EPA Rules and Principles
EPA Contract Template

3. Delivery Subcontractors and EPA contractors
We use the term ‘you’ to refer to the ‘main provider’, that is, any organisation holding a contract with us through which we directly route funds from an employer’s digital account or government-employer co-investment.
The main provider will have the overall responsibility for the training and on-programme assessment conducted by themselves, their delivery subcontractors and
have a contractual relationship on behalf of the employer for the end-point assessment conducted by apprentice assessment organisations. Where we use the term, ‘you’ we are also referring to any organisation contracted by you to deliver the apprenticeship on your behalf.
Subcontractors (p20-p24)

4. Delivery subcontractors

5. Sub Contract for Services Institution XYZ
Documentation
Contract for Services
Institution XYZ
& Employer ABC
Applies only to delivery with non levy paying employers until March 2018
Provider Agreement
Institution XYZ
&
ESFA
Sub Contract for Services Institution XYZ
& Provider 123

6. Mindset
ESFA take particular concern over subcontracted delivery provision because it potentially adds risk to likelihood of delivery success:
Takes additional resource from the main provider to manage and monitor
Later identification of delivery issues
Underspend or over contracting
Main provider takes fees for their role, reducing the amount of funding going direct to the costs of training - possible impact on quality and viability as a result
ESFA recognise the value that specialist providers offer to apprenticeship quality and capacity
Some have chosen via the ‘Supporting’ route on RoATP to specialise here – capped at £500k quantum
Some will not reach capacity to be on the RoATP k quantum
ESFA therefore want to know whether you subcontract and if so with who and for how much
You must complete a Delivery Subcontractor Declaration as required
Even if you don’t subcontract you MUST make a nil return
Late return or failure to submit = suspended payments

7. Mindset
You are always fully responsible for the actions of your subcontractor and for the quality of any outcomes
You cannot cede accountability for the employer relationship
There must always be a single provider chosen by the employer for all apprenticeship provision
You will also probably contract for EPA as a minimum - this is not a subcontractor
You can only subcontract from your own budget lines
You can only subcontract if the employer requests this and it happens at the start of the apprenticeship
The main provider must deliver ‘some’ of the apprenticeship delivery in each employers apprentice programme which must have ‘some substance and not be just a brief input at the start or a small proportion of the total apprentice numbers’
You must have an external audit report to ESFA specifications if your delivery subcontracts exceeds 100k in a financial year, to provide assurance about your arrangements to manage and control your deliver subcontractors. You must supply a certificate signed and authorised to the ESFA.

8. Subcontracting Delivery – your accountabilities
If you fail to check, ESFA will place restrictions on your future use of subcontractors
All funding is routed through 1 main provider (including English and Maths)
RoATP
Main
owns the employer relationship
Can be a subcontractor also
Must conduct all or ‘some’ of the training
Supporting
Must not exceed £500,000 delivery each year*
Must not deliver 100% of the apprenticeship
Employer-Provider
Can only train their own staff (or connected company/charity)
Must evidence actual costs of delivery as main or subcontractor
Not on RoATP
Must not exceed £100,000 delivery each year*

9. Subcontractor Rules
P 127. You must not agree to the use of delivery subcontractors with an employer if you do not have knowledge, skills and experience of contracting with, and managing, delivery subcontractors
Take advice about the impact of Public Contract Regulations and make this available to ESFA or employers if requested
You must tender for subcontractors e.g. open and competitive tendering
You must have a legally binding subcontract contract with the subcontractor (see Para 140 for detail / our template )
Your employer agreement must set out how the delivery of the apprenticeship including the subcontracted elements will work (para 133 for detail)
You must act in an open and transparent way
any links between you and any subcontractors must be set out in the employer agreement
You are responsible for dispute resolution
Employer and Subcontractor Agreements need to be ultimately enforceable through the courts
Apprentice and employers must be told, by you, how to escalate concerns

10. Subcontracting Considerations - Your Checks
Who you subcontract with is evidence of your robust management processes
ESFA specify that all of the following must be carried out and results available to them:
Seek legal advice about the Public Contracting Regulations on recruitment of contractors
You must carry out Due Diligence checks and make process and results available
Have ‘robust’ procedures (e.g. in your due diligence) to ensure you don’t fund an extremist organisation
Don’t contract if you believe the organisation is not suitable - even if this loses you the contract with the employer
You must not agree to subcontract to a second level
You must have an external audit report to ESFA specifications if your delivery subcontracts exceeds 100k in a financial year
To provide assurance about your arrangements to manage and control your delivery subcontractors.
You must supply a signed and authorised certificate to the ESFA. They may wish to see the whole report

11. Subcontracting Considerations - Your Checks
Who you subcontract with is evidence of your robust management processes
You MUST ensure that a ‘supporting’ RoATP registered subcontractor does not have contracts that exceed £500 k in total or 100k if not on RoATP)
Impact of failure to comply are significant :
your subcontracting will be restricted
the subcontractor may be excluded permanently
CHECK the list of Declared Subcontractors, for those on the supporting RoATP route
Check the RoATP published list for status
Require subcontractor to declare other contracts to you in signing your agreement

12. List of Declared Subcontractors
Use the published list to check BEFORE you subcontract

13. Subcontractor Fees and Payments
Employer-Providers
If you subcontract to an employer to deliver part of the apprenticeship , they must be on the employer-provider route of the RoATP
They can only deliver to their employees/connected company employees
Can only charge the actual costs of delivery and must provide evidence of this
Your Fees
You must set out your fees for monitoring and managing the subcontract in the employer agreement and the subcontractor contract
You must set out what support you provide for these fees
And specify how you will monitor quality
And how you will mange the subcontractor