Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Accepted
Government often fails to adequately understand market capabilities before designing procurement requirements.
Conclusion
The GCF told us that it accepted all of the recommendations of the NAO report, and welcomed the recommendation that the Cabinet Office, GCF and CCS work with departments to understand the barriers to early market engagement and take steps to address them.28 The GCF agreed that there is a need to make sure that public authorities spend enough time understanding the market up front—what the market can deliver and 18 Q 43 19 Q 61 20 C&AG’s Report, para 15 21 Q 61 22 Q 62 23 Q 56 24 Q 50 25 Q 43 26 C&AG’s Report, para 11 27 C&AG’s Report, para 18 28 Q 13, C&AG’s Report, para 20 12 Competition in public procurement what best practice is in the market—rather than coming up with what they would ideally like, which may not be deliverable. The GCF agreed that the government has often not understood what the market can deliver.29
Government Response Summary
The government agrees with the implicit recommendation and states that it is already implemented through existing measures like the Sourcing Playbook, which sets expectations for market health assessment, and resources provided by the Cabinet Office and Crown Commercial Service.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation Recommendation implemented 2.2 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. 2.3 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.