Procurement

New procurement era takes shape

While some confusion remains over exemptions as the Procurement Bill makes its way through committee stage, further details on transparency and a single digital platform should help level the playing field for SMEs looking to engage with the public sector

Details of the Government’s far-reaching changes to procurement legislation are finally beginning to emerge as the foggy Green Paper of December 2020 gets shaped into law. With changes expected to come into force as early as August 2023, its main aims (according to the way it’s being sold by the Cabinet Office) are to capitalise on opportunities to simplify procurement post Brexit. This in turn will make it easier for SMEs to win contracts. It also strengthens exclusion grounds, making it easier and less litigious for public sector bodies to disqualify poor performing suppliers.

Exemptions

As the Procurement Bill makes its way through the Lords (currently at committee stage) some organisations have voiced concerns over technical changes to exemptions. Under current procurement legislation (PRC2015) there are broadly two - the first is when a public body makes ‘in-house’ awards (The Teckal exemption). The second is when a public body enters into a public-public co-operation arrangement, for example where local authorities co-operate to deliver waste services jointly (referred to as the Hamburg exemption).

Teckal and Hamburg are now referred to respectively as vertical and horizontal exemptions, but according to the current wording of the bill, deals will no longer be exempt if “the goods, services or works representing the main purpose of the contract could be supplied under a separate contract.” Potentially, this means that if a private provider could reasonably provide the services or goods in question, the public sector will no longer be able to make use of the exemptions.

Peter Collins of Sharpe Pritchard LLP, notes: “Within the Bill, local authorities which set up ‘single’ entities on their own will continue to benefit from the vertical exemption, meaning they can award contracts to an entity without going through a full procurement process. However, contracts that councils award to joint entities, controlled by multiple local authorities, appear no longer to be exempt and will potentially be subject to a full procurement process. This would undermine the purpose and benefits of councils operating joint entities.

“This is a surprising omission from the Bill and one without any real logic. Given the hundreds of shared-services vehicles throughout local government, the need to ensure that these arrangements are not prohibited will potentially require some amendment to the Bill. Given the speed at which those drafting the Bill were required to operate, it is entirely possible that these provisions simply got left out in error.”

The Local Government Association (LGA) is seeking clarification that both vertical and horizontal collaboration arrangements within the public sector will continue to be exempt and that the model of service delivery remains the choice of the contracting authority. A proposed rewording has been put forward by Lord True (reportedly, John Major’s favourite speechwriter) as the bill goes through Committee stages, with further amendments discussed on 18th July (available to view here).

Broadly, the LGA welcomes the bill. It has noted that many of its concerns arising from the Green Paper had been resolved in the legislation as it passes through the Lords. However, a number of grey areas remain in the bill, which the LGA believes may have unintended consequences for local government and could potentially create new difficulties in meeting the procurement objectives whilst delivering high-quality public services.

Single Digital Platform

The Bill aims to streamline the various requirements for publishing different types of procurement information in different ways and in different places. For those wishing to supply, there can literally be hundreds of places to check notices and post details. The Single Digital Platform will be created for suppliers to register their details that can be used for all bids, and a single central ‘transparency platform’ will allow any interested party to see how contracts are performing, how much has been spent through them and how long they have left to run. A register of commercial tools will allow contracting authorities to see which frameworks and dynamic markets they can use, a performance register will show how suppliers perform through various contracts, a self-explanatory prompt payment register and a debarment list will be available to view suppliers which may be excluded from procurements.

API access to data is published to the Open Contracting Data Standard (OCDS) and over time the plan is to explore integrating commercial data analysis tools. The principles of this can be found in the recently published Transparency Ambition policy paper, released

Local Authority insight

As part of the LexisNexis Local Authority Insight series, procurement experts Kieran McGaughey and Andrew Millross outline changes in the Procurement Bill and how they might work in practice for contracting authorities

The Procurement Bill - an expert briefing

Chaired by Nick Davies, programme director at the Institute for Government, the briefing discusses key measures contained in the bill with Ed Green and Lindsay Maguire at the Cabinet Office.

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at the beginning of July, which explains the changes to the transparency of public contracts and spending in greater detail. The LGA will be seeking ministerial assurance that when legislation relating to this comes into force, local authorities will only have to publish procurement information to the new platform in a common standard and a single format.

SME activity

With 5.5 million small businesses in the economy, employing over 16 million people, it makes sense that the Government does indeed appear to be serious about increasing SME activity. SME spend data figures for 202021 released at the end of May show central government spend with SMEs rising for the fourth consecutive year to a record £19.3bn.

Representing the sector, Enterprise Nation has produced the report Access all areas: Government which looks at how doors can be opened further for small businesses. The report argues that as well as changing legislation, public bodies will need to change their culture too. A range of recommendations include the early publication of procurement pipelines and improving pre-procurement consortium building.

Champions

The report suggests building places to provide clarity about what ‘SME champions’ are doing and establishing one method of measuring the proportion of SME spend - ideas that already appear to have at least gained traction with the Single Digital Platform. The report states:“There are benefits to calculating what proportion of contracts larger businesses are giving to SMEs, but it is not clear, to those outside of government, precisely how these calculations are done, so there is some question about how valid they are. Government should agree one way of measuring SME spend, publish what methods are being used, and stick with it for the long term.”

Rebalancing budgets

The report agrees that if these reforms work, it will rebalance procurement budgets in favour of small and young businesses and references the failure of Carillion to make the point that over-reliance on a small handful of companies may mean fewer failures, but when failure does take place, the impact can be devastating.

Martin Traynor OBE, small business representative at the Cabinet Office, says: “Our experience with Covid shows that we struggled to engage with SMEs in a targeted way and the proportion of public sector spending which went to them fell. Similarly, innovation is so important and we don’t always get this right either. But, sometimes government departments can excel at this too. For example, the SME champion in the Department for Transport hosts Dragons’ Den style pitch events with suppliers who can explain what they’re making.

After all, you can’t buy it if you don’t know about it."

Promised grace period

After the legislative procedures have been concluded, there will be a period of at least six months’ notice (the government has promised) before the new rules will take effect. Until this point, it’s business as usual under the Public Contracts Regulations 2015. Procurements started before the change in law will continue to be bound by the current rules, and the many public sector frameworks will provide assurance in certain areas long after the changes. But change is coming, and so all in the public sector need to prepare for a potentially seismic shift in the way they are able to conduct the business of buying. L

The Single Digital Platform will be created for suppliers to register their details that can be used for all bids; a ‘transparency’ platform will show how contracts are performing FURTHER INFORMATION

Procurement Bill bills.parliament.uk/bills/3159 Transforming Public Procurement updates tinyurl.com/2fpdp3wa

Advertisement Feature ESPO - helping your business achieve its sustainability goals

Seven tips to help achieve your organisation’s green goals and support the UK’s Net Zero targets. As the aftermath of the Covid-19 pandemic starts to subside and many of us return to the ‘new normal’, it’s hard to ignore some of the changes that were implemented in a rush that have actually turned out to be beneficial

Now we’re seeing an opportunity in some instances to resist reverting back to how things were and this is exactly what the Government have alluded to in their ‘build back better’ approach to achieving net zero targets by 2050.

Increasing flexibility for staff has inadvertently seen a knock-on effect for sustainability targets with benefits including reduced vehicle usage, lower carbon emissions, less energy requirements needed within our offices, to name a few. These are all positive outcomes however, to really achieve the ambitious targets required to reach Net Zero, thorough consideration alongside an implemented business strategy will be required for most organisations.

At ESPO we’re committed to helping our customers find achievable and sustainable ways to meet their goals. Within our 120 freeto-access, fully compliant framework solutions lie a number of key services that can help build sustainability and green initiatives into the foundations of your business. Read our seven top tips to help you achieve your green goals and help support the UK’s net zero targets:

Ask for help

In the world of procurement, you’re already expected to be specialists in multiple fields and now, you can add Net Zero to the list. Get up to speed quickly by seeking advice, especially on such a specialist subject. Remember, in the grand scheme of things, sustainability is new to most of us and it’s likely to feel overwhelming, especially when considering the needs across your whole business. There are plenty of Consultancy services available to help. Many, like those available on ESPO’s Consultancy Services Framework (664), includes specific sublots that cover requirements for environmental and sustainability options. Experts can help analyse your data and create policies and processes around achieving sustainability and net zero targets based on your organisation’s individual requirements to ensure you have a clear, concise plan to achieve your goals.

Where can you make the biggest changes?

For most organisations one of the biggest factors effecting your green status is energy consumption. In today’s turbulent market, making changes in this area can provide huge benefits to future proof your costs as well as saving the planet, so it should be a key focus. However, there’s no denying that this area is a minefield to navigate at the best of times and so there’s no shame in seeking expert advice!

ESPO’s 12 strong, in-house Energy team can support all aspects of energy requirements, from onboarding through to site additions and transfers. Our Electricity Framework (191) offers a ‘Pure Green’ product which is electricity that comes from 100% renewable sources such as solar, wind and hydro. Being supplied with ‘Pure Green’ allows you to report zero emissions for electricity as the electricity can be matched to relevant Renewable Energy Guarantee of Origin (REGO) certificates. A huge win for your green targets!

Another option is our framework for Renewable Energy (2838), providing consultancy services specific to this area, with the ability to complete an unbiased assessment of your needs and identify suitable options going forward.

Think big when future proofing your business

Try not to be intimidated about implementing big changes. There’s plenty of support available and this is where you’re likely achieve most benefits in the long run.

Depending on your business, Fleet could be considered one such area. More organisations, ESPO included, are converting to electric or hybrid vehicles which use electric charge points rather than traditional fuel or a combination of the two.

Electrifying your fleet using the versatility and flexibility of a framework allows for alternatively fuelled vehicles to be purchased

or hired/leased. As well as direct reductions in your carbon footprint, reductions in noise pollution are very evident with alternatively fuelled vehicles. If you’re wondering where to begin, why not start with ESPO’s framework for Specialist Vehicle Purchase/Hire (215/218)?

Councils or larger organisations may also find our Vehicle Charging Framework (636) helpful as it focuses on ultra-low emission vehicles (ULEV) and zero emission vehicle charging technology. Increasing the number of electric vehicle charge points (EVCPs) available for either staff or public use is a great way to support positive, long-term change. Plus, the EVCPs are fully disposable of at the end of their working life under the WEEE Directive.

Go green on White goods

As well as the big things, make small changes across your organisation too - it all adds up! An overlooked offender can be your white goods. Efficiency ratings vary widely and proper disposal of items can be a nightmare.

To ensure you’re getting the best choice and value for yourself and the planet, consider a supplier who can guarantee the safe collection and disposal of old appliances and provide a top range of energy efficient models.

ESPO have partnered with online retailer AO Business, growing their already impressive range through ESPO’s White Goods Framework. Best of all, the range is available for next day delivery, ordered through the espo. org website. For larger, more complex requirements we have a dedicated team to support you, just get in touch.

Through this partnership customers get a wide choice of energy efficient options and old appliances and other electrical waste can be safely disposed of through AO’s state of the art WEEE recycling facility.

Reduce, Reuse, Recycle

We all know this phrase by now, it’s been engrained into us from our school days however, these three words are more important than ever. When considering your organisation’s waste there may be multiple areas to focus on so it can be daunting to know where to start.

Services like those provided through ESPO’s Non-Domestic Community Waste and Recycling Framework (379), can assist customers with increasing the financial and environmental value obtained from waste collected and support you with aims such as waste minimisation. Within this framework you’ll also find a specialist Lot covering Food Waste Recycling Services. Unavoidable food waste is actually a valuable resource as it can be turned into green energy and fertilisers for agriculture.

To reduce food related waste even further, there are now more options than ever when it comes to embedding standards and regulations around biodegradable, recycled or recyclable packaging and ESPO’s Catering Consumable Framework (45) is a great place to start.

Update old technology

Depending on the type of business you’re dealing with, it’s likely that paper usage is another area worthy of radical change. The Covid-19 pandemic saw a huge drop in paper usage as many organisations turned to digital options to suite staff working from home. However, as people have returned to offices, the global paper market has seen unprecedented demand for print and paper return to well above pre-pandemic levels. That means that changes in this area can help make a big difference towards your green goals.

You can start by looking at your post requirements. Hybrid mail solutions like the ones available through ESPO’s Postal Goods and Services Framework (RM6017) are growing in popularity and can dramatically reduce the transportation of physical mail, improving efficiency and also noticeably reducing carbon footprint. This solution is particularly relevant with more people now embracing hybrid working models meaning that physical post can sit idle for weeks.

You may choose to look at the bigger picture and consider digitalisation by refreshing your IT equipment (hardware and software). If this is the case then ESPO’s Technology Products and Associated Services Framework (RM6068) has a number of options that can help. Many suppliers now offer a comprehensive range of remanufactured or refurbished products which can help organisations lower their electronic waste and reduce their carbon footprint when compared to the purchase of new products.

Buy-back is also increasing in popularity as it now considers product disposal and puts emphasis on the supplier to take the products back after a specified period of time allowing them to be reused or remanufactured further down the line. Updating old IT systems can allow for many paper processes to become digital and can therefore make a huge different across your organisation.

Make it a team effort

This is topic that ultimately affects each and every one of us so we’d encourage you to get your staff involved as much as possible. Changing processes, systems and goals at leadership level is a great start towards implementing change but this ethos needs to be embedded across your work force to be truly achievable. There are many ways staff can make a difference just by changing their own individual actions with a little help from their employer. Take our Staff Benefits Framework (319) for example, which includes the cycle to work scheme allowing bike loans for staff operated through salary sacrifice arrangements. As payments are made from employees’ gross salary, they are made free from income tax and national insurance, while employers also save the national insurance contributions.

Providing easy access to hire vehicles through ESPO’s Vehicle Hire Framework (271) can also help organisations in reducing their ‘grey fleet’ usage - being employee’s private cars over which employers have little control or knowledge. Implementing a range of eco-friendly vehicles that staff can use for work purposes helps manage this previously unknown element.

For more information about any of ESPO’s frameworks and how they can help your business achieve its sustainability goals, please visit espo.org/sustainability. L

FURTHER INFORMATION

Digital innovation and public sector aren’t two phrases you often hear together.

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