Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Publish guidance and mechanisms for public authorities to conduct appropriate early supplier engagement.
Recommendation
Public authorities have often not been effective in engaging with markets and potential suppliers, and government has not provided clear guidance on how to meet requirements to treat suppliers equally while best supporting value for money. Departments and other public bodies often take an overly cautious approach to engagement and are not always clear on how to understand the markets and suppliers they buy from. Engaging with potential suppliers throughout the commercial lifecycle can help departments and other public bodies understand what the markets can provide, while providing suppliers with an opportunity to 6 Competition in public procurement highlight potential innovations and efficiencies they can bring to the contract. Without this engagement, it is harder for departments and other public bodies to craft sufficiently clearly defined requirements that the market is able to provide. Overambitious requirements can reduce competition and distort the market by limiting the potential supplier pool. Particularly deterring smaller businesses that may think they cannot meet the requirements from engaging with public bids. Recommendation 2: The Government Commercial Function and Cabinet Office should set out, as part of its Treasury Minute response, further details explaining the guidance and mechanisms that it has put in place to promote best practice for public authorities to appropriately conduct early engagement, without distorting the market, such as: • carrying out discussion of problems facing the contracting authority, to help identify solutions, or give the market an opportunity to develop solutions to solve the problems. • asking important questions to potential suppliers to allow contracting authorities to refine their requirements and create clearer specifications. • gaining a better understanding of what the market can supply, any contractual constraints and whether the budget, resourcing and timescales are achievable. • raising awareness of the potentia
Government Response Summary
The government agreed with the recommendation, stating it is already implemented through the annually revised Sourcing Playbook, which sets best practices for market assessment and early engagement, supplemented by a 'Market Management' guidance note, with the Crown Commercial Service undertaking extensive market analysis.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation Recommendation implemented The Sourcing Playbook, published in 2019 and revised annually, sets out best practice on service delivery, insourcing, outsourcing, mixed economy sourcing and contracting. This includes setting out a clear expectation that contracting authorities should undertake an assessment of the health and capability of the market when deciding how to deliver a service. This enables a contracting authority to understand our markets, recognise our influence on them and design commercial strategies and contracts that promote market health, and in turn maximises value for money and service quality. Effectiveness of early market engagement is assessed as part of the commercial continuous improvement assessment framework with a masterclass programme to share best practice. These principles are supplemented by a supporting guidance note on ‘Market Management’ that outlines more detail and practical guidance on the factors to consider when making these assessments. In addition, the Cabinet Office also provides resource and guidance to contracting authorities when they undertake market health assessments. The Crown Commercial Service undertakes extensive analysis of supply markets and engages with suppliers to inform its strategies for each of the categories of goods and services in which it establishes commercial agreements. As part of its commercial agreement development process, it then undertakes further supplier engagement to inform the design of specific commercial agreements.