Transforming Public Procurement – What the Green Paper means for SME Businesses

Feb 19, 2021Research, SME Champions, Social Value, Tender Process

In December 2020, a green paper titled, ‘Transforming Public Procurement’ was presented to the UK Government by Lord Agnew, the Minister of State for Efficiency and Transformation. This document lays out the government’s proposals for changes to public sector procurement in a post-Brexit world. In this blog, we will take a look at the green paper and break down what it means for SME business in the UK who are interesting in tendering. If you want to read the whole thing, you can find it by following this link.

Goals

In the Ministerial Foreword, Lord Agnew states that ‘The end of the Transition Period provides a historic opportunity to overhaul our outdated public procurement regime.’ He explains that the £290 billion pounds spent on public procurement each year ‘must be leveraged to play its part in the UK’s economic recovery, opening up public contracts to more small businesses and social enterprises to innovate in public service delivery, and meeting our net-zero carbon target by 2050.’

In other words, the Government is maintaining its commitment to work with smaller businesses and will expect more in terms of social value, particularly environmental. The Governments goals are defined as, ‘to speed up and simplify our procurement processes, place value for money at their heart, and unleash opportunities for small businesses, charities and social enterprises to innovate in public service delivery.’

If your heart sinks at the idea of placing value for money at the heart of procurement, thinking it will mean contracts being solely awarded on price, think again. The executive summary states, ‘…we want to send a clear message that public sector commercial teams do not have to select the lowest price bid and that in setting the procurement strategy, drafting the contract terms and evaluating tenders they can and should take a broad view of value for money that includes social value.’

Take away: Social Value is going to become increasingly important in public sector bidding. If you don’t already have a strategy, it’s time to start creating one.

Simplification

Transforming Public Procurement

As we’ve mentioned before, while the government has stated that it wants to encourage more SME businesses into bidding, the process isn’t always SME friendly. The requirements of bids need to be proportionate to allow smaller businesses to compete. Transforming Public Procurement indicates that the government acknowledges it too, with a drive to simplify the procurement process through ‘overhauling the complex and inflexible procurement procedures and replacing them with three simple, modern procedures.’

  • a new flexible procedure that gives buyers freedom to negotiate and innovate to get the best from the private, charity and social enterprise sectors.
  • an open procedure that buyers can use for simpler, ‘off the shelf’ competitions.
  • a limited tendering procedure that buyers can use in certain circumstances, such as in crisis or extreme urgency

The Green Paper goes on to say, ‘The Government wants to open up public procurement to a more diverse supply base, making it easier for new entrants such as small businesses and voluntary, charitable and social enterprises to compete and win public contracts. We want bidding for public sector contracts to be simpler, with procedures that are quicker and cheaper to participate in and information on contracts easier to find.’

Of particular note is the Governments intention to ‘…propose establishing a single digital platform for supplier registration that ensures they only have to submit their data once to qualify for any public sector procurement.’ This seems to imply that the days of repetitive SQs and PQQs are coming to an end, with that data saved on a single procurement portal to be re-used each time.

Transforming Public Procurement also states, ‘We propose legislating for a new Dynamic Purchasing System (DPS+) that may be used for all types of procurement (not just commonly used goods and services).’ DPSs get mixed reviews in the world of bids and tendering because they offer no guarantees of work to the company applying to join them.

Take away: We can expect simpler procurement processes, with less ‘red tape’ but increasing use of DPSs.

Combatting Fraud

The Government are also trying to close some of the loopholes that have caused issues with public procurement, noting that, ‘The current procurement regulations allow contracting authorities to take into account the past performance of a supplier on only very limited grounds and commercial teams often have to rely on bidders’ self-declarations rather than objective, evidence-based information.’ At first glance this seems to imply that more evidence will be required in the SQ/PQQ stage, however, if this information is saved then supplying it would be a one-time cost.

Transforming Public Procurement also looks at the challenge process, proposing ‘reforming the process for challenging procurement decisions to speed up the review system and make it more accessible.’ They also want to discourage procurers from making unethical decisions by ‘refocusing redress onto pre-contractual measures while capping the level of damages available to bidders, reducing the attractiveness of speculative claims.’

Take away: The government is tightening up the procurement process to ensure fairness for both procurers and bidders.

Responding to Transforming Public Procurement

At this stage, Transforming Public Procurement is just an advisory document. Lord Agnew and his team have put together proposals, which they are seeking feedback on. If you want to be part of that process, you will need to submit your feedback to

procurement.reform@cabinetoffice.gov.uk by the 10th of March, 2021.

Need Help?

If any of the issues raised in this green paper give you cause for concern for your company, then we can help! We can help you develop a social value strategy or plan your procurement pipeline for the next 3-5 years – and we can help you write winning tender responses. To find out more, get in touch today.

Adrian Corcoran

Adrian Corcoran is Managing Director and Founder of Bid for Success. Passionate about working with great businesses to win them new work, she and the Bid for Success team are here to help you with your bidding and work winning needs.

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