Headlines: May 29th, 2002

A clear message has gone out to public services that there must be an end
to selecting the lowest cost bidder for IT projects. Not only can the
lowest cost bid be directly harmful because it does not necessarily equate
to value for money, but it is also deterring many IT suppliers from
bidding. The directive comes in a new best practice guide to accounting
officers and senior management from the Office of Government Commerce,
which spells out that procurement decisions are to be based on value for
money, not lowest price.

The guidance, ‘Value for money evaluation’ makes it clear that in future
all requests for proposal and invitations to tender should refer to best
practice and confirm that it is being followed. Suppliers should be told
that procurement award criteria will consist of separate financial and
non-financial strands.

The end of the lowest cost culture was signaled last week when e-Envoy
Andrew Pinder told a the House of Commons Public Accounts Committee that the Government is seeking ways of persuading more major IT companies to bid for public sector work. He said that too few of the computer giants are prepared to tender for Whitehall contracts because too many suppliers believe that contracts are awarded purely on the basis of lowest cost.

The Office of Government Commerce has also published a ‘Successful Delivery Toolkit for central government departments, local authorities and NDPBs It brings together current best practice and value for money guidance into a single body of knowledge.

‘Value for money evaluation’, Successful Delivery Toolkit and other
booklets in the guidance series can be obtained free of charge from the
Office for Government Commerce Service Desk on 0845 000 4 999.