Government must be more assertive in forming market for procurement

24 July 2018

The Public Accounts Committee report finds that the procurement process incentivised focus on tendering and winning bids, not ensuring right supplier.

The report also highlights further concerns regarding contract specification, transparency, use of SMEs and role of Cabinet Office.

Chair's comments

Comment from Committee Chair, Meg Hillier MP:

"The Public Accounts Committee has long highlighted weaknesses in Government contracting and the lessons it must learn if it is to outsource effectively for the benefit of service users and taxpayers.

The collapse of Carillion in January sharpened our focus on the relationship between Government and its Strategic Suppliers—companies that receive over £100m in annual revenue from Government contracts.

Vast sums are invested across vital public services, with far-reaching impacts on the lives of citizens. It is critical that their money is spent wisely and with their best interests at heart.

This report, which follows our publication of Government’s Carillion risk assessments and new evidence taken from Government and Strategic Suppliers, makes important recommendations in this direction.

In particular, we have identified a need for Government to be more assertive in shaping the markets in which it operates, with a renewed focus on driving value for taxpayers’ money.

It must look with fresh eyes at the motivations of companies currently bidding for central government work, and develop a strategy that requires contract-awarding bodies to look beyond bottom-line costs.

Crucial to this will be to embed procurement best practice across departments.

For example, there must be clearer specification of contracts, properly scoped, so that when any deal is signed there is an agreed understanding between Government and supplier of what is being paid for, and over what timescale.

There are many areas in which the Cabinet Office can drive compliance across departments—not least turning its proposed ‘playbook’ of guidelines, rules and principles for contracting into a set of mandatory requirements.

We encourage it to respond positively to the recommendations set out in our report and take the necessary steps to ensure its authority is better felt."

Further information

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