Worked example
Worked buying file: a maintained primary school
Follow a fictional primary school from a verified requirement to three comparable offers, a governor decision and a first-invoice correction. The lowest headline rate does not produce the lowest complete cost.
Read the example with its boundaries
FICTIONAL WORKED EXAMPLE. Every school description, supplier, offer, response, quotation timestamp, approval and result in this dossier is invented for teaching. No real school, supplier offer, approved deal, interview, live tariff or professional sign-off is represented.
The worked requirement is electricity for one maintained primary school with one import meter, 100,000 kWh annual use, a two-year supply term and 365 days per modelled year. No extension option is included. Figures exclude tax unless explicitly described as gross. The teaching calculation separates 5% VAT on qualifying supply from 20% on direct TPI fees.
For this normalised teaching comparison, electricity supply is assumed to qualify for 5% VAT in a period after temporary relief has ended; direct TPI service fees are separately assumed to carry 20% VAT. No actual supply dates, eligibility ruling or school tax status are represented. A real comparison must apply the documented treatment to each charge and date, including any temporary electricity relief and mixed use. Do not copy the illustrative supply assumption into a live decision.
Completed starting brief
| Brief item | Fictional completed record |
|---|---|
| Buyer and authority | The school buys under its maintaining authority’s scheme. The school business manager leads; the headteacher approves within a recorded delegation; the required governor decision is minuted. |
| Existing commitment | Current supply ends after the new procurement. The school has checked membership and exit terms, issued the required notice and retained acceptance. There is no assumed right to leave early. |
| Evidence supplied | Twelve complete months of billed kWh and meter readings; supply identifier and serial; current charges; opening hours; holidays and lettings; no known estate change during the term. |
| Buying objective | A two-year, fully specified charge schedule, complete remuneration disclosure, monthly bill validation and a named query owner. All bidders receive the same dated data pack. |
| Governance route | For this example the LA confirms a below-threshold quotation process under the actual scheme and the proposed service appointment. This illustrative confirmation cannot be used by another school. |
One adviser and an independent supplier check
The school evaluates and appoints one TPI for the defined exercise. Its quotation authority is limited to the named meter, information and offers, lasts six months and gives no contract-signing power. The engagement records what is payable if no supply agreement is accepted. The school retains its supplier correspondence and comparison file.
The TPI approaches its declared panel. A and B return complete offers and D declines the load. E is not approached because it falls outside the panel: that restriction is recorded as a limit on market coverage, not as proof that E could not supply the school. The school separately obtains C’s written supplier offer. C is a direct supplier check, not a second broker appointment. The exercise is not described as a whole-market search.
| Contact | Outcome | Evidence retained |
|---|---|---|
| A / through TPI | Complete written offer | Rates, charges, terms and fee disclosure at common comparison cut-off. |
| B / through TPI | Complete written offer | Same demand and dates; uplift shown separately. |
| C / direct supplier | Complete independent quote | Same demand and dates; no ongoing validation service included. |
| D / through TPI | Declined | Written load-size reason. |
| E / outside panel | Not approached | Panel restriction recorded; no supplier refusal or meter ineligibility claimed. |
Completed delivered-cost comparison
A’s 25p/kWh includes its 0.2p TPI uplift. B’s 24p headline excludes a 0.3p uplift, so the comparable supply rate is 24.3p. C’s 26p has no broker uplift. Direct TPI fees are shown separately. The teaching supply VAT assumption is 5%; direct TPI fees are calculated at 20%. All offers cover the same two-year period, with no extension.
| Annual calculation | A | B | C / direct |
|---|---|---|---|
| Energy including stated uplift | £25,000.00 | £24,300.00 | £26,000.00 |
| Standing charge × 365 | £730.00 | £1,460.00 | £730.00 |
| Direct TPI service fee | £300.00 | £500.00 | £0.00 |
| Annual total before tax | £26,030.00 | £26,260.00 | £26,730.00 |
| Annual supply VAT / assumed 5% | £1,286.50 | £1,288.00 | £1,336.50 |
| Annual direct-fee VAT / assumed 20% | £60.00 | £100.00 | £0.00 |
| Annual total including component VAT | £27,376.50 | £27,648.00 | £28,066.50 |
| Two-year total before tax | £52,060.00 | £52,520.00 | £53,460.00 |
| Two-year total including component VAT | £54,753.00 | £55,296.00 | £56,133.00 |
Fees and the valuation record
A’s embedded remuneration is 100,000 × 0.2p ÷ 100 = £200 annually, or £400 over two years at the base demand. It is already inside A’s energy line. Its direct TPI service fee is £300 annually, £600 over the term, giving £1,000 total expected TPI remuneration before tax. B’s stated uplift is £300 annually and £600 over the term; its direct service fees total £1,000, giving £1,600 total remuneration. Commission and direct fees are both disclosed, without adding embedded commission to the energy cost twice.
The base two-year gross estimate for A is £54,753: supply of £51,460 plus £2,573 assumed supply VAT, and direct fees of £600 plus £120 fee VAT. The teaching valuation record assesses 110,000 kWh each year as the maximum expected quantity, using a documented demand allowance.
At that quantity A is £28,530 before tax annually: £28,230 supply and £300 direct fees. Applying 5% to supply and 20% to direct fees produces £30,001.50 annually, or a two-year estimate of £60,003. There are no options. This estimate is not a contractual spending cap; material scope, quantity or charge changes require reassessment.
The school records all reasonably aggregable requirements and the separate adviser appointment. Being below the general statutory threshold does not displace its LA rules. The relevant local quotation and approval requirements are checked before invitations, not inferred from the outcome.
Why the school rejects B and does not select C
B’s headline unit rate is lower, but its complete annual cost is £230 above A before tax. Over two years its gross total is £543 above A after the separate supply and direct-fee VAT assumptions. B provides no additional service or flexibility that the evaluators have evidenced as offsetting that difference. The written evaluation records this specific conclusion rather than declaring all low headline rates misleading.
C is £700 more annually before tax than A and excludes the stated monthly validation service. The school does not invent a cash value for staff time. It records the actual service difference and its limited internal capacity. A is preferred on the complete, comparable cost and defined delivery commitment. The existing LA buying option has also been reviewed on its own written terms, with the result retained in the route record.
Specimen recommendation and acceptance record
“Approve fictional Offer A for the specified meter and two-year dates, subject to final terms matching the evaluated schedule, all procedure and notice requirements being complete and the authorised signatory’s check. Base gross cost is £54,753 under the stated component-tax assumptions; the documented maximum expected valuation estimate is £60,003. A is preferred because its complete cost is lower than B and C and its validation service meets our stated need. No price forecast or guaranteed saving is claimed.”
The minute identifies the evidence version, declarations of interest, approver and conditions. The headteacher’s delegated acceptance follows the completed governor process and records the current offer timestamp. The TPI transmits documents; it does not accept supply on the school’s behalf. If rates or terms change before acceptance, the school refreshes the assessment and follows its delegation rules.
A completed first-bill control
The first illustrative 30-day supplier bill records 8,000 kWh. The accepted 25.0p/kWh already includes the 0.2p broker uplift. Expected supply cost before tax is 8,000 × 25p ÷ 100 + 30 × £2 standing = £2,060. The supplier instead bills 25.2p, adding the same uplift again: £2,076 before tax. The duplicate creates a £16 supply discrepancy, or £16.80 including the assumed 5% supply VAT. The direct TPI service invoice is outside this supplier-bill correction.
Separately, a £25 monthly direct service fee carries £5 VAT under the 20% teaching assumption, giving a £30 fee invoice. The business manager attaches the signed rate schedule and readings, requests correction of the supplier bill and records the agreed TPI response target. The exception closes only after the corrected supply amount of £2,060 before tax, £2,163 gross, is reconciled. This is an invented control demonstration, not an actual recovery. Monthly checks and the next renewal owner remain in the contract register.