A whopping £300 billion a year is spent on public procurement in the UK – that’s roughly a third of all public money spent.
This means that the opportunity to introduce positive change to the regulations that govern how public procurement operates is both significant and exciting.
The Procurement Reform Bill is the UK legislation that will supposedly drive this change, replacing the existing Public Contracts Regulations 2015 (PCR2015) that originated within the European Union. I say ‘supposedly’ because it is still yet to be approved, so we don’t yet know exactly what the final version will say.
However, based on the numerous draft versions that have been released so far, coupled with the consistent messaging from the Cabinet Office, I think most procurement professionals operating in the public sector will agree that it sounds very promising. Value for money, public benefit, transparency and integrity are all at the core of the bill with a statement that enabling technology will be unified and modernised.
Sounds great right? The latest information states that the Reform Bill isn’t due to go live until October 2024, however. That’s a long 14 months away – a long 14 months where public sector organisations are facing very pressing and present issues such as security of supply, rising costs and meeting Carbon Net Zero initiatives. Our advice, therefore, is to not wait for the Reform Bill to make positive changes that can help with addressing today’s problems. Be proactive and act now; it makes both operational and commercial sense to do so.
So what types of changes should you be focusing on right now?
Too many public sector organisations undertake tendering exercises using the same specifications and evaluation criteria following the same routes to market (mostly open and restricted procedures). Unsurprisingly, when they do what they’ve always done, they get what they’ve always got.
We should be doing things differently, seeking innovation to drive more commercial supply chains, aiming to cultivate suppliers’ expertise and secure benefits. The existing PCR2015 allows you to innovate and address today’s problems through things such as market engagement as well as following one of the two available negotiated procedures.
Better, more proactive planning
Unsurprisingly, having your house in order and properly planning for tendering exercises will result in better outcomes. Too many public sector bodies engage procurement teams too late and simply view them as an administrative function. Change this mindset. Procurement professionals should add value right from identifying a need to buy all the way through to lifecycle contract management.
Now is also a better time than ever to undertake some good practice housekeeping – ensure your contract register is accurate and up to date so you are ready for any future requirements to publish a tendering pipeline (very likely under the Reform Bill).
Process & template changes
It can be almost guaranteed that the Procurement Reform Bill will introduce new financial thresholds, new/adapted routes to market and changes to standstill periods/notices. This will therefore require wide scale changes to procurement policies/procedures, financial/contract regulations and tendering templates.
Review these now and make incremental changes for improvements focusing on streamlining and making things as easy as possible for both internal stakeholders and external suppliers to understand. This will reap immediate benefits as well as putting you in a strong position once the Reform Bill is finalised.
Have a proactive approach to contract management
Too many public sector organisations are ‘old school’ when it comes to managing contracts, i.e. they don’t do anything until something goes wrong and then they get the supplier into a meeting to hit them over the head with the dusty contract that has just been retrieved from a cupboard!
High-performing organisations view contract management as a two-way street – a chance to encourage change and innovation, celebrate successes, track benefits and target improvements. Not only will this lead to stronger relationships with your suppliers but it will also likely lead to better outcomes for your stakeholders/customers – a win-win.
Contract Management will likely be central to the Reform Bill, whereas it wasn’t even referenced in PCR2015. Organisations should look at their existing contract management technology tools now to ensure it allows them to seamlessly achieve compliance with the new regulations. If organisations haven’t got an existing tool, they should consider procuring one.
4C is experienced and passionate about working with organisations in the public sector to not only achieve compliance with procurement legislation, but more importantly, to thrive and achieve value-add sustainable outcomes.