Latest Public Sector News

01.06.12

A new approach to public procurement

Source: Public Sector Executive May/June 12

Kate Ashley reports on the launch of a national strategy to improve public sector procurement.

The Government has published data on £70bn of potential future contracts over the next five years, across 13 different sectors. This aims to allow Government and industry to work together to spot skills gaps early and safeguard UK competitiveness and growth.

The announcement came from Business Secretary Vince Cable and Cabinet Office minister Francis Maude.

So far, 17 industry bodies and suppliers have signed up to the ministers’ ‘Procurement Pledge’, including BT Global Services, HP Enterprise Services Ltd and Network Rail.

The move aims to provide more streamlined procurement processes, identify and assess strategic capabilities in supply chains and to back UK businesses when bidding for contracts overseas.

Publishing the data will offer companies a greater certainty of future demand and is a ‘more strategic’ way of doing business, focusing on longer-term need to develop and manage the supply market. It seeks to achieve better growth by ensuring the right capabilities are in place and engage in effective pre-procurement dialogue with the supply market, supported by the use of outcome-based specifications.

The Government has published an initial analysis on strategic capability, using construction and tunnelling as the first plan. Plans for the other sectors will follow shortly.

Maude said: “We have published details of £70bn of potential Government business. Never before has a government been so open about its long-term business needs. Industry leaders recognise the value of publishing these pipelines and that is why they support our reforms which will boost growth. “Publishing data on what we plan to buy – whether it’s tunnels or computers – means we can identify skills gaps sooner and give industry a heads-up so UK businesses are in a better position to compete.”

Cable said: “In the coming years the Government will purchase billions of pounds worth of equipment and services, which means billions of pounds worth of potential opportunities for UK business.

“By publishing details of our expected future requirements ahead of time and adopting a strategic approach, we can help give UK suppliers the confidence to invest in people, plants and technologies here at home so they can compete for and win these government contracts, as well as seek new opportunities abroad.

“Frankly, we’ve been too short-term in how we’ve done procurement in the past. Our key competitors in Europe already see procurement as an integral part of a proper industrial strategy and it’s time we did the same. This is a win-win scenario, making our businesses stronger and providing best value for the taxpayer.”

The pledge requires companies to engage in the development of procurement ‘pipelines’ for the future, to work with government and other public sector bodies to identify capabilities needed to deliver future demand; to pinpoint any capability gaps and plan strategically to meet these needs where there is an intention to do business with government and the wider public sector.

Additionally, those who have signed up will actively engage with government and the wider public sector in pre-procurement dialogue, work with their supply chains to provide more sub-contracting opportunities to smaller providers where possible; highlight good practice and report non-compliance or deviation of the commitments by government and public body signatories using the ‘Mystery Shopper’ service. However, NAVCA, which represents voluntary and community groups, has rejected the pledge, saying it focuses too much on big business, and will sign up instead to an alternative LGA declaration which it says is focused more on SMEs and the voluntary sector. The Cabinet Office has said it doesn’t mind which pledge organisations sign, as long as public sector procurement improves.

The sectors which will be covered by the contracts are:

Construction; aid/international development; clinical and medical life sciences; police services and equipment; probation and offender services; welfare to work; energy and utilities; ICT; office solutions; print and print management; property and FM; and travel.

The full list of signatories to the pledge is:
Central Government Departments and their Agencies and Non-Departmental Public Bodies

Association of Chief Executives of Voluntary Organisations (ACEVO)

BAE Systems (UK operations)

British Chambers of Commerce (BCC)

BT Global Services

Business Services Association (BSA)

Capgemini Confederation of British Industry (CBI)

Engineering Employers Federation (EEF)

Forum of Private Business (FPB)

HP Enterprise Services Ltd Institute of Directors (IoD)

Intellect

National Grid

Network Rail

Serco UK & Europe

Telereal Trillium

UK Contractors Group

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Comments

Chris Williams-Lilley (Rail Champions)   11/10/2013 at 11:39

This commitment to The Procurement Pledge is something which should be applauded! So not sure why there are no comments recorded below. In our experience, business leaders are failing to understand the evolution and impact of the Sustainability movement across the globe. They either 'get it' or choose it ignore it completely! To put it into some context, the UK construction industry (of which the rail industry contributes) is vast. Its output is worth £100bn a year. It accounts for 8% of GDP and employs 2.1 million people. Hence the compelling need to review good sustainability and work ever more closely to build sustainability into each and every supply-chain linked to infrastructure supply and maintenance. We're awaiting with great excitement for the re-launch of BS8903 as an ISO standard next year, outlining the principles and framework for procuring sustainability. As both the Public Services (Social Value) Act 2012 and BS 11000 collaborative business relationships implies, sustainability is very much on the agenda and has now gained teeth! Hurrah!

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