A step in the right direction – procurement reforms planned for 2014

Back in October many of you helped us respond to a Government consultation on how local public sector procurement can be made simpler for small and medium sized enterprises (SMEs) – a category that the majority of charities fall within.

The Government has now published its response in a new report, Small Business: GREAT Ambition. The paper sets out a whole raft of measures aimed at making it easier for small businesses to grow. For the voluntary sector the most important changes are those which focus on opening up public procurement to give SMEs easier access to the £230bn of public sector spending in England each year.

For the most part, the Government has decided to press ahead with the proposals put forward in its consultation. Planned for Spring 2014 these reforms are likely to have a significant impact on the way thousands of charities contract with the public sector each year.

The report is light on detail, but following discussions with Cabinet Office officials we’ve managed to glean the following:

• Pre-Qualification questionnaires (PQQs) for contracts below EU thresholds are to be scrapped. NCVO expressed concerns about this proposal. A PQQ tests whether an organisation is both capable and suitable to deliver a particular contract. If these questions are not asked at the beginning of the tendering process, there is a risk they will simply be incorporated into the far more time-consuming Invitation to Tender (ITT) stage.

We understand government plans to mitigate this with a ‘self-certification’ process whereby an organisation declares that they meet the minimum criteria needed to deliver a particular contract. We’ll let you know when we have more details.

• PQQs for contracts above EU thresholds are to be standardised. NCVO supported this proposal. PQQs can often be overly burdensome (we’ve heard reports of PQQs being 50 pages long) and contain unnecessary questions (sometimes PQQs for large construction projects are used for small service delivery contracts).

However, we also proposed that the standard form should include a question of social value to enable organisations that bring this added value to showcase their strengths. Although government has seemingly rejected this proposal they do intend to provide scope for local bodies to add a small number of extra questions. Guidance that ensures commissioners make the most of this flexibility will be key.

• All local government contracts above £25k are to be advertised on Contracts Finder. We supported this measure too, but highlighted the need for Contracts Finder to be made far more user friendly. Without the site being easier to navigate, there’s little use in ensuring all contracts are posted on the portal. Government are planning to improve Contracts Finder next year – we’ll let you know when we have more details.

• Local government will start publishing its spending data to SMEs and VCSEs. NCVO has long argued that all local public bodies should publish their spending data – including contracts and grants – to the voluntary sector. This information is essential for enabling improvements to procurement by helping public bodies and VCSEs identify needs, design services and campaign for change. While it appears this measure doesn’t go as far as we would have liked, it is welcome a step in the right direction.

• Government will launch a new service aimed at helping public bodies engage with the market. One of NCVO’s main priorities for improving public procurement is tackling the lack of dialogue that often exists between commissioners and service users. Therefore it’s encouraging to hear that government plans to launch a new service – Solutions Exchange – which will help public bodies engage with the market to ask for ideas and solutions to problems before a formal procurement takes place. We’re looking for more details about this, so watch this space.

While we cautiously welcome the direction of travel the Government is moving, the success of the reforms will rest largely on the small print and how the changes are actually implemented on the ground.

It should also be noted that the measures outlined above focus primarily on process; this is just one small piece of the commissioning pie. Public procurement is only as good as the people interpreting the information or making decisions. To truly transform commissioning, practitioners need to be equipped with the skills and expertise needed to make these important decisions. With this in mind we will continue to push for high quality training and guidance to accompany any new procedures put in place.

We’ll let you know when we receive more details about the reforms. In the meantime, do get in touch to let us know what you think.