Headlines: December 3rd, 2002

Moves to increase competition in the public sector market place and introduce common standards for public sector bodies to purchase goods electronically are all part of a wider strategy to propel procurement higher up the modernizing agenda. The new measures will help in delivering the vision of all public services procuring goods and services electronically at highly competitive prices, but turning the vision into a reality will demand radical change in culture and processes. Currently the focus is on the price at which things are bought and this will need to change to the processes by which procurement is undertaken. The Audit Commission found the main barriers to competitive procurement include risk aversion and organizational culture. The Byatt Review revealed that only a quarter of English councils have a written procurement strategy in place.The Office of Government Commerce is concerned that procurement rules and traditional practices are keeping smaller companies and particularly newly established companies, out of the public sector market place. Demanding three years audited accounts from potential suppliers, for example, excludes companies trading for less than four years and effectively shuts out much competition. The Office has launched an initiative to widen access to the public sector government marketplace for new entrants. This follows work with the Small Business Service Unit, an agency of the DTI, and government departments to improve the information available to suppliers on selling to government, including information about forthcoming opportunities. The Office is also investigating ways of reducing the costs associated with bidding for government business.

The Office of Government Commerce and the Office of the e-Envoy have just published a consultation document setting common standards for public sector bodies to purchase goods electronically. The introduction of a standard would promote the adoption of e-procurement methods. A standard across public services would reduce the IT investment demands on suppliers and make it easier for smaller companies to compete.

The recently launched Local Government Procurement Forum brings together the public, private and voluntary sectors in order to carry out more effective procurement of goods, works and services. The agenda for the Forum includes improving the processes of all the partners involved to increase effectivenes, improve the market function, save internal costs, get better prices and rival the best in the procurement field.

Links: http://www.ogc.gov.uk http://www.idea.gov.uk