Friday 19th Jan 2018 - Logistics & Supply Chain

UK government aims to improve procurement performance

The UK government is to publish details on over £50 billion of potential business opportunities online as part of a package of measures aimed at improving its improving the way it buys from the private sector.

It also wants to provide an open door for current and future suppliers to discuss upcoming procurement opportunities, cutting the time taken in the procurement process.

In addition it says that it wants to work with industry to identify and address any key capabilities needed to meet future demand; actively helping them to remove barriers and supporting growth through spill-overs that boost exports and drive innovation.

The government has come in for heavy criticism over its procurement strategy in the wake of its decision to award a large contract for Thameslink trains to Siemens which has resulted in 1,400 job losses at Bombardier in Derby.

Cabinet office minister Francis Maude said: “UK-based suppliers are finding themselves excluded, opportunities for growth are missed due to the public sector’s timidity and carrying out a procurement in the UK costs over twice as much as in France. This is wrong from every point of view.”

The government calculates that the average public sector procurement currently costs around £46,000, compared to around £19,000 in France.

“While other countries manage to settle down and develop long-term relationships with business – this country appears to have taken a rather less successful overly formal and legalistic approach, failing to think beyond the immediate contract and failing to adequately support our businesses,” said Maude. “We look forward to working with businesses on our new approach.”

The details of over £50 billion of potential business opportunities across government will be published online tomorrow. The data will forecast potential contracts over £5 million, with over 150 potential opportunities

The government also wants departments to have published rolling medium term pipelines for its construction and infrastructure projects, other capital asset procurements such as pharmaceuticals and ICT, and FM and other Government service opportunities by April next year.

It has also set targets for speeding up the procurement process with the aim of making it 40 per cent faster to do business with government.

The plan is for all but the most complex procurement processes to be completed within 120 days from January 2012 – compared to the average of 200 days now.

The announcement was welcomed by David Noble, chief executive of the Chartered Institute of Purchasing & Supply. “Today’s announcement suggests there is now a real impetus to drive through improvements to the system. This is important as previous initiatives have failed to deliver the savings hoped for because of a lack of follow-through and a loss of focus.”

“Lack of transparency has been one of the biggest problems in public sector procurement so the move to publish details of potential projects is probably the most innovative for decades. It should encourage businesses, large and small, to invest in their own equipment and infrastructure which should bring significant economic benefits.

“Agility is a key element in best procurement practice too. Markets move incredibly quickly these days and changes in prices and creative practices must be met with equal speed and competence. SMEs are an important part of this mix, bringing innovation and agility, so the opportunity offered in breaking up larger contracts should encourage more of that.”

And Noble warned: “One area that needs continued focus is to make sure that delivering greater value, not lower cost, is the primary driver of procurement decisions. In a desire to cut spending, the Government needs to prevent poor decisions which could have disastrous, long-term implications.”

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