On Monday of this week the Crown Commercial Service (CCS) released a Public Policy Note (PPN) on ‘Onerous Practices in Procurement and Contracting’. Put simply they are referring to procurement practices which place far too much risk on the supplier. This in
turn leads to reduced interest in supplying to the public sector and therefore less assurance of value for money and a drain on innovation. It also directly contradicts the aims of the Public Contracts Regulations 2015.
So, what does the PPN outline?
It outlines a set of actions that all buying authorities have to immediately take into account when running a procurement exercise. These actions include:
- Conducting effective pre market engagement – to be done in advance of the tender process to encourage new suppliers to come forward and allow room for new innovations to be considered for the specifications.
- Ensuring accurate and reliable data is available – both pre-contract to allow suppliers to assess whether the opportunity is suitable for them and also during contract delivery so performance can be managed objectively.
- Awarding contracts on value for money – Most Economically Advantageous Tender (MEAT) means price alone can not be used as the basis for awarding a contract. Other factors including community benefits and sustainability must be taken into account.
- Placing appropriate risk identification and management systems within the contract – this means a detailed understanding must be in place pre-procurement so all parties are aware of what they are signing up for.
- Using exiting guidance to establish limits of liability in contract – a key area for suppliers who may not be able to carry the burden of extensive liabilities.
- Collaborating when change is required – resolving contract delivery issues quickly and proactively through objective criteria to minimise their impact.
These actions are all commonly known as good practice in the industry but it is interesting to see this PPN come out to really enforce the points and mandate their application. Recently we put out a blog on the challenges facing the Irish procurement market. One of the main issues highlighted in that blog was the market being distorted on the supplier side by cartels but is this PPN suggesting that there may also be foul play on the buyer side too. Are buyers manipulating specifications and contracts to favour particular suppliers?
I hear many a supplier shouting out ‘of course they do’ at their monitors already but with new reporting mechanisms in place such as the mystery shopper service and the firm guidance from the CCS like this PPN, is it becoming a thing of the past?
We can only hope so. In all likelihood it is probably a few bad apples rather than an endemic problem in procurement. With visible targets on reducing spending, increasing efficiency and £1 out of every £3 being spent with SMEs this is surely a time where we can see the light at the end of the tunnel, work towards our common goals and start shaking hands across the procurement table rather than butting heads.