Government opens its procurement heart to IT suppliers

The government has promised more openness with suppliers and has published its first ever forward-looking pipeline of business, which includes £25.9bn of IT projects.

It has also promised to reduce the time it takes to complete procurement processes and revealed the UK’s poor record on this matter compared with other European countries.

The government told suppliers at a conference titled The Crown and suppliers: A new way of working how different but mutually beneficial its new way of dealing with suppliers will be.

Opening the conference, David Smith, crown representative and Department for Work and Pensions (DWP) commercial director, said there has never been more determination from the government to cut costs and improve services for procurement practices than there is today. “Never in my many years in government have I had a minister personally interested in procurement.”

That minister is Francis Maude, minister for the Cabinet Office. “I really mean it about being passionate about procurement,” said Maude. “We have not got it right for quite some time.”

Part of the problem, according to Maude, is the tendency for governments not to engage with supplier communities. “The way the UK public sector has procured has kept suppliers at arm's length.”

Government IT contracts up for grabs

IT suppliers have a keen interest. Deputy government CIO Bill McCluggage tweeted that there are £25.9bn worth of government IT contracts in the pipeline up to 2017.

Maude said the public sector should engage more with suppliers and not rely on lengthy procurement practices, which make it “exceedingly and prohibitively [difficult] doing business with government”.

Maude said the UK is particularly bad at procuring public sector services – the public sector procurement process costs twice as much to run in the UK than in France, while it costs UK suppliers four times more to bid for public sector work than private sector contracts. “These costs get passed on in the end.”

He said a procurement should take an average of 120 working days – 40% less than it does now. Part of the problem is related to a belief in the public sector, as a result of EU law, that it is wrong to talk to suppliers, Maude said. “We need to bust a myth. It is not illegal for public sector procurement to talk to suppliers.”

In fact, he said it makes sense to talk to suppliers. 

Maude said the government must talk directly with suppliers to remove its reliance on consultants. “Too often in the past we have fallen into out comfort zone and hired consultants for procurement. But consultants that are paid on day rates have no desire to do procurement quickly.” He said he has “forbidden” the use of consultants for central government procurement without his permission.

Furthermore, the government will be training its own in-house staff so they can they can work with suppliers. “We must ensure that the skills needed to work with suppliers are in government.”

The government will embark on different business models to achieve its objectives of value-for-money and effective services. These models will include mutuals, joint ventures, co-operatives and social enterprises.

Maude closed his opening speech with the message that the procurement event would not be a one-off. “We will be listening to your ideas,” he told an audience off 800 supplier representatives.

He added that the government’s first ever chief procurement officer, John Collington, will enforce government strategy. Part of his role will be to increase work with small to medium enterprise (SME) suppliers. There has been an increase already, with 44% of the contracts signed in September awarded to SMEs, compared with just 5% in January.

• Read and give reaction to The Crown and Suppliers: A New Way of Working at #supplytogovernment on Twitter.