Proposed government procurement legislation will tackle “key barriers” faced by charities bidding for contracts, the Cabinet Office has said.
The All-Party Parliamentary Group on Charities and Volunteering met yesterday to discuss the barriers charities and social enterprises face when accessing procurement opportunities and how the procurement bill could address these.
Lindsay Maguire, head of engagement on procurement reform at the Cabinet Office, said that charities and small businesses do not always know what opportunities are coming up and that larger organisations can better divert their resources to bid for contracts.
Under the procurement bill, which is currently in the House of Lords and could become law by May next year, larger authorities will be legally required to publish a “forward look” of all of their procurements for the next 18 months.
It would also see the creation of a centralised platform that will have tender opportunities as well as the introduction of mandatory feedback.
At the event, NCVO welcomed some aspects of the bill but said it still left concerns over procurement processes.
‘A level playing field’
Maguire said that the government will set up a centralised platform where tenders will be published. She explained that if an authority went to market without publishing that information, they would be in breach of their statutory duty.
“That’s really important because at the moment it’s not actually legislative, it’s guidance. This is a really important step in terms of the transparency of information,” she said.
According to her, some organisations currently have to sign on to up to 60 different systems and upload their details every time their bid for a contract.
She said: “Reform gives us an opportunity to look at a ‘tell only once’ system whereby smaller organisations will be able to put all of their evidence in one system and then public sector users and customers will be able to pull that through into their bid. This is a really effective way of cutting down our resources.
“We’ve done some analysis on it and this is genuinely something which is going to be of benefit for the industry because it’s saving so much time. Once all of that infrastructure is in place, it’s going to make it a lot easier to do business with a whole range of different public sector bodies.”
She added that the platform will take some time to build but will give “all organisations a level playing field” when bidding.
Addressing a ‘key barrier’
Maguire said procurement teams often fail to talk to the market and make assumptions, which can result in “bias around incumbency”. The practice means that charities and social enterprises are not necessarily involved in the early stages of procurement.
“Preliminary engagement is really deep. At the moment, you can do it but the challenge is that a lot of procurement teams see it as being quite risky because of the way EU legislation is written. We’re making it a lot more flexible and we’re putting parameters in the legislation which says ‘pre marketing judgement is a really good thing, go out there, do it and make sure that you’re engaging with companies that actually know how to deliver’.”
The government will also mandate the provision of feedback at the end of the procurement process. Once the contracting authority lets a tender, it will be required to share information on the winning bidder and how the contract was won so that bidders can use it to improve and grow.
A more flexible procurement process
Procurement teams will be given more flexibility to design their own procurements.
Maguire commented: “A real barrier at the moment, is that the rules are quite rigid. It creates a culture of being quite risk averse. We’re worried about legal challenges. We’ve designed a process where procurement teams will be able to effectively look at what they need and design a procurement process which meets their needs.”
She said that it will not be suitable for every tender but could work where an organisation is, for instance, “buying a very complex social care element”.
“You would want the ability to negotiate with your potential suppliers, you’d want them to have the ability to do checks to look at what the offer is. We genuinely think that that flexibility is going to open up the market and reduce some of the stagnated processes that we see at the moment.”
The government will also strengthen prompt payments, which Maguire described as a “huge issue” for a lot of small organisations. She said transparency metrics will be put into place to see how contracts are performing.
NCVO: ‘Poor procurement practice is a big challenge’
Also speaking at the event was Sam Mercadante, policy and insights manager at the National Council for Voluntary Organisations (NCVO).
She argued that “poor procurement practice is one of the biggest and most persistent challenges that we hear about from our members and that’s why this bill has been so important to us”.
“Charities are important here because they’re often trusted voices in their local communities and they have strong local connection. They have particular insight and expertise that can allow them to meet needs that might otherwise be missed out. We know that effective commissioning of public services requires a varied, sustainable market where those varied players are viable for the long term. We also know that around two in three charities frequently subsidise the public services that they’re commissioned to provide with their own charitable funds,” she said.
She said NCVO would like to see procurement professionals who are empowered and can confidently engage with the sector as partners, both in designing and delivering services so that they meet people’s needs.
She welcomed some aspects of the bill such as the flexibility to design procurement practices but pointed out that there is still “a lot of concerns”.
“For example, with the preliminary market engagement there’s still quite a lot of vagueness around [the fact] that it would introduce unfair advantage in that process. With our charity perspective, we can see an organisation reading that and saying, ‘I don’t know what’s going to be an unfair advantage on me so even if I were approached to engage in a preliminary market exercise that makes me nervous I’m not going to participate’.
“There are things like that where we think the culture change that we want to see and that the government wants to see is not quite in the right place yet for charities.”
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