What suppliers need from Government to transform public procurement

Adam Maddison, director of client services at dxw analyses the recent government Green Paper on transforming public procurement, he explains that despite the paper making the right kind of noises, there doesn’t seem to be anything that signals a big change

The new Green Paper on transforming public procurement was an interesting read for me as someone who is immersed daily with the public sector on digital projects.

I’m also someone who believes that transparency and openness, as well as an awareness of social value, are infinitely important to the process.

The government’s aim is for this Green Paper to prompt an overhaul of public procurement, creating more opportunities for innovative, smaller companies to win business.

Aiming for openness and a process that supports SMEs is one thing, but the practicalities of implementing it, and enforcing the rules, is a wholly different story.

Support for SMEs

The Green Paper outlines a renewed commitment to working with small businesses. Anything that makes it easier for SMEs to get onto different procurement frameworks is a good thing. It provides buyers with more options, and stimulates innovation, competition, diversity and growth.

This commitment to more open processes, simplification and transparency is welcome, but how will it play out in practice? Beyond the overall statements of positive intent, the paper doesn’t set out any tangible help for smaller businesses.

Consolidating regulations is sensible but in itself doesn’t add much value to suppliers. As a result, I don’t expect our day-to-day experience to be much different.

The real issue facing SMEs is buyer behaviour. The government needs to take a bigger role in mandating individual buyers to do the right thing within the rules, otherwise not much will change. In the case of digital services, this would probably fall to the government Digital Service or Crown Commercial Service.

There’s an important role here in empowering buying organisations to be more open and transparent by promoting and talking about best practice in agile procurement. Lead by example.

The commitment to greater transparency, if it’s done well, will make things better and help to keep everyone accountable.

More transparency about what’s being bought by public sector organisations would also make it easier for suppliers to adapt to meet the needs of the market. Competition, open and fair, is what we need.

Simplifying public sector procurement

We also need to reduce the complexity of the process for both parties – right now, it tends to favour the big players. They’re more likely to have the knowledge and resources needed to work through weighty tenders, while SMEs can spare precious little time to do this. This is a huge barrier.

The government needs to go further and commit to simplifying procurement for smaller players to help them have a real impact. Doing this would also make life easier for buyers for whom procurement is, more often than not, off-putting and time consuming. The Digital Marketplace does this well enough. It’s not perfect, but it would be good to see this kind of approach applied more widely.

If buyers were able to be open about roadmaps, future plans, and budgets, so much would improve for suppliers. Currently, for the most part, it’s left to guesswork. It should be possible to use new tools to allow these conversations to happen and move to the point where suppliers can judge how best to pitch bids. We know that budgets are tight and the public sector needs to show value for money, but it’s easier and more efficient for suppliers to shape their bids to provide this value if buyers are open about these things. 

Factoring in past performance

Some evidence of a desire to enforce regulations is there, with the Green Paper’s commitment to considering past performance when selecting suppliers. This is good to see but will need to be applied consistently to have real impact.

There is little to suggest how this would work practically for SME suppliers. And there is still the ability to bypass past performance in ‘crisis’ situations, along with other procurement rules, so this won’t prevent some of the failed contracts we’ve seen as part of the response to Covid.

Looking at past experience – as opposed to performance – is a recipe for excluding innovation from the market. Marketplaces should both reward sector experiences and performance and encourage fresh talent and ideas to show a commitment to new players. 

Green credentials for digital suppliers

However, evidence of performance isn’t the only thing people want to see. In recent years, social value has become increasingly important. The pandemic has heightened both supplier and buyer awareness of the need for services to be digital, remotely accessible and designed with the citizen in mind.

And as the climate crisis deepens, having ‘green’ credentials is practically mandatory for suppliers wishing to make a positive impact. The more organisations move over to this way of thinking, the more those who don’t will stand out for the wrong reasons.

The Green Paper’s proposal to include wider economic, social and environmental benefits as part of the evaluation process isn’t a new idea, but its implementation has been patchy so far. Making things like social value and environmental impact more important has to be a positive thing. Though it’s likely to be harder for SMEs to demonstrate as much impact as larger companies, and it’s important to keep that in mind when measuring something like this.

Showing support for digital suppliers

This desire for more openness and transparency, and the bringing of social and environmental issues to the fore in public procurement, is great to see. There is huge value to be had from that. But commitments under the existing system are already being undermined. So unless there are some teeth to the new proposals, there’s a risk they will end up as window dressing…

It’s easy to become cynical when we have seen many similar efforts at grand plans to reform government procurement over the last few years. The government sends the right signals when it comes to supporting SMEs and while there has been some progress, the market is still dominated by the big players.

Obviously, the devil is in the detail, but if these reforms can build on and accelerate the progress we’ve seen in the last few years, perhaps they don’t need to be revolutionary.

Adam Maddison

Director of client services

dxw