Nurseries, and private nurseries in particular, have recently been in the spotlight. One book above all lit the fuse: Le prix du berceau : Ce que la privatisation des crèches fait aux enfants (Editions du Seuil, 2023). This “privatisation” covers several different realities, but tenders, both public and private, sit at the centre of all of them.
1. Historical background
The nursery operators that pioneered the sector have now come of age. In 2003, the Raffarin government announced a “nursery plan” worth €200m of investment, 20% of which was ring-fenced for projects put forward by nursery operators, together with a range of financial and tax incentives.
In practice, this “nursery plan” ended the monopoly of public and not-for-profit nurseries (funded by local authorities through balancing subsidies), and led to the emergence of the first nursery operators.
In accounting terms, the reform delivered what was expected: in 20 years, the number of nursery places (cots, in the trade’s jargon) rose from 200,000 to 485,000, and more than a hundred nursery operators are now members of the Fédération française des entreprises de crèches (FFEC).
Broadly speaking, there are now three types of nursery:
- Public nurseries run in-house (mainly by municipalities and inter-municipal bodies (EPCI) holding early-years powers)
- Nurseries run under a public service concession
- Purely private nurseries
2. Nurseries under public service concessions
In brief, a nursery run in-house is the simplest model to picture: a municipality owns the building, runs the nursery directly and staffs it with its own civil servants.
Under a concession, the municipality (or the inter-municipal body) owns the building but delegates operation to a concessionaire, either a company or a not-for-profit organisation. The concessionaire runs the nursery day to day, from staffing to the educational project, including maintenance and the purchase of supplies. For a parent living in the municipality, there is no difference from an in-house nursery, since the allocation rules and the cost are identical.
This really is a service concession and not a public procurement contract, because the operating risk sits with the concessionaire: at the tender stage, the bidder submits a forecast budget including the local authority’s contribution. If attendance falls below forecast, the operating loss falls on the operator.
Concessions generally run for five years, which means competitive tendering has to be repeated regularly. They do not include works, as the concessionaire takes over premises that are already built and fitted out.
Less frequently, there are public service concessions with works, which involve building and/or fitting out the nursery. In that case the concession runs longer, to cover the amortisation period.
Public service concessions have grown for two main reasons:
- local authorities used this contractual structure to avoid placing too heavy a burden on already stretched public finances (nursery professionals are then employees rather than civil servants);
- with the opening up to competition, the subsidy agreements granted to not-for-profit organisations by municipalities came under scrutiny from public procurement rules.
3. Private nurseries
Here, a nursery operator (a company or a not-for-profit organisation) has developed its own nursery, either by building it or by renting premises. The operator has to fill the nursery by finding families and reserving organisations. Without going into the complexity of nursery funding, reserving organisations are essential if a nursery is to break even at the very least.
Reserving organisations are companies or public bodies. Cots can be reserved case by case, but such an organisation may want to buy a substantial number of cots to meet the needs of its staff. As families do not all live in the same place, the point is to buy places from a network with sufficient geographical coverage.
Given this volume purchasing approach, a tender is mandatory for public buyers. That means complying with public procurement rules, but the light-touch procedure (procédure adaptée) is the norm, which allows a degree of flexibility, such as the use of negotiation.
For private buyers, a tender is optional but strongly recommended, so that the offers of the various operators can be compared.
In both cases, invoicing against purchase orders is preferred: the buyer reserves the places that answer parents’ requests, at the agreed price.
4. Why work with Prime Conseil?
The latest government announcements only confirm the underlying trend of the past 20 years:
- municipalities and groupings of municipalities are responsible for creating places in their areas;
- private players (companies or not-for-profit organisations) are being called on to run more and more nurseries;
- large companies and public bodies are being asked by their employees or staff to secure a nursery place through a framework agreement.
So if you are a buyer, public or private, you may naturally feel lost among the different operating models, the funding arrangements and, above all, a crowded and varied competitive field: alongside the large nursery groups that dominate the market, small independent players survive and some not-for-profit organisations still enjoy a strong local footprint.
At Prime Conseil, our experience in the nursery sector and in contract management is a way to build a coherent specification, analyse the offers, run the negotiations and include clauses that secure the relationship (obligations of result, quality control, clawback clauses)
If you are bidding for tenders, public or private, your challenge is precisely to have a strategy that makes you competitive, sets you apart from your rivals and answers the buyer’s needs. Here too, Prime Conseil is a useful ally in keeping or winning share of this ever-growing market.