Guest blog: Procurement Act Delay – taking advantage to get match fit
In my role as Managing Director of Triad Group Plc, I have been surprised by the extent to which I have become involved, and interested in, the legislation known as The Procurement Act. This could significantly improve the way public goods and services are procured, whilst providing opportunities for a much wider range of suppliers to engage in the procurement process.
Cabinet Office have confirmed a delay of four months, with a start date of February 2025. This delay gives public sector buyers and suppliers time to limber up for the Act’s commencement, so that we are ready for kick off in February. What pre-season drills could we consider now?
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Utilise the UK’s SME community
Given that SMEs represent well over 99% of the UK’s private sector businesses, it may come as a surprise that the Act includes an exhortation to “consider” them when procuring goods and services. This implies that more than 99% of business may not have been considered during procurements until now. That is plainly shocking, and there should be a collective sense of shame that the nation’s powerhouse, its SME community, has been cast as second fiddle for so long. Let’s utilise our SME community, and shatter a few myths:
- SMEs are not just niche specialists. They can provide a full-spectrum service on a sizeable scale. Triad for example, has delivered programmes with 70+ staff, worth millions, and operates more nimbly than many of our large competitors.
- SMEs enjoy working directly with the end clients. If the “duty to consider” SMEs consists simply of encouraging large primes to shelter a handful of SMEs within their supply chain, then that robs both the client and the SME of the opportunity to work together and shape new outcomes. It also drives poor value for money for the public purse, as invariably margins end up “stacked” to levels higher than a direct engagement would involve.
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Make “Social value” work
The Act’s principle of “social value” is excellent. If public sector buyers could theme their social value requirements across, say, a year’s worth of procurements and publish their plans, then suppliers could align their own social value contributions. This could positively impact a few important causes, rather than be less effective when spread across many.
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Embrace transparency
I welcome provisions within the Act to offer transparency around topics such as commercial pipelines, prior information notices, award information, and so on. It would be useful to see some additional planning and focus going into the systematic production of commercial pipelines and to the proper facilitation of events such as pre-tender market engagements (PTME). As chair of a procurement sub-group within TechUK’s Justice & Emergency Services Management Committee, I know that many suppliers are experiencing frustration at the perceived box-ticking nature of PTME. There is a genuine desire from suppliers to help shape and influence the way procurements, and indeed the schemes of work being procured. There is a corresponding frustration that the feedback gathered from responses to PTME’s, and Requests for Information is not being acknowledged, disseminated or digested by the buyers and their commissioners, causing sub-optimal procurements to ensue and public value for money to diminish. Limbering up could involve setting procurement timetables that allow room to respond to the PTME and RFI feedback, and to improve the final procurement as a result.
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Re-evaluate the price of quality
The Act emphasises the importance of considering quality as well as price within procurements. Invitations to tender often weight price at 40% and social value at 10%. This means that the quality of a proposed offering can at best score half of the marks available. Given the complexity of, for example, digital transformation initiatives surely quality deserves a higher premium than this? We all know that buying a cheap solution that does not work, or that stops working, is not good value for money. Limbering up with this in mind could involve refreshing the approach to evaluation criteria and their weighting. Quality at a reasonable price is surely better for everyone.
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Prioritise prompt payment
The UK public sector should be proud of its existing track record on payment. It is better than most other sectors in the UK. That said, there is still room for improvement in not just the promptness of payment, but in the facilitation of prompt invoicing too. Whether it is raising of purchase orders, signing off statements of work, receipting goods and services delivered – all these steps have the potential to frustrate and delay cash flow. Often, clients have an expectation of continuous delivery, but their processes need to reflect that desire if there is not to be a disconnect. At Triad, we have some customers who are gold-plated exemplars of good practice when it comes to the end-to-end process of payment. However, the exemplars should become the norm, and not the exception. Before the Act goes live it would be helpful to look at your processes and ask yourself the challenging question “Can we pay promptly?”.
Hopefully the four-month delay to the Act will present an opportunity for everyone to get fit and deliver better value all round for the public purse. Limbering up now could certainly make a difference.
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