Enhanced transparency requirements are a key feature of the new public sector Procurement Bill and this will have a significant impact on day-to-day procurement activities. Some examples (there are more!) include requirements for:
· A central online transparency platform that will allow suppliers to access public procurement data. This will most likely be developed and supported by a central government organisation with each contracting authority being able to grant suppliers access to the procurement data they provide via the transparency platform.
· Publications of numerous notices throughout the procurement process, including a requirement to publish contract award notices prior to entering any relevant contract.
· Publishing contractually agreed key performance indicators for each contract.
· Publishing notices for large procurements (over £5 million) a year before they are due to be tendered.
What does this mean for procurement people?
All this heightened transparency will place a heavy load on all aspects and people involved in procurement. From governance and control, to staffing, processes, procedures, and systems. Having up to date and accurate data will become essential. Procurement teams will need to develop new processes to keep track of contract spend across their organisation to ensure compliance with transparency related notices and also track when financial limits that trigger notification action are reached. For example, procurement teams will need to:
· Keep track of all third party spend on contracts, especially where their values increase over their life cycle. When a contract reaches a £2 million lifecycle cost it will need to be added to published procurement pipelines. This applies for organisations that spend more than £100 million a year.
· Have accurate and up to date procurement pipelines to give the market the requisite one year notice ahead of large procurements (£5 million).
· The contract performance of the relevant suppliers’ will also need to be assessed against published key performance indicators. If the supplier failure meets the threshold for debarment further disclosure and documentation will be required.
· There will be time consequences that arise from transparency requirements across the whole contract lifecycle. For example, procurement teams will need to publish contract change notices before contract changes are implemented and also publish contract award notices prior to entering any relevant contract. Both activities will add time to the procurement lifecycle as well as increase public scrutiny on procurement activity and contracts.
Staff across the organisation
Procurement teams will need to engage staff and contract managers in designing the processes, associated document sets and systems required to ensure that the appropriate triggers are in place to ensure compliance with the many transparency requirements.
Given the risks involved in getting things wrong, there will need to be checks and balances and appropriate governance to ensure the information published is up to date and accurate. For example, staff involved in giving a supplier feedback on performance as part of routine supplier relationship / performance management may well experience much more robust responses from suppliers, given that the new Procurement Act will mandate the publication in the public domain of details of procurement and contract performance. Supplier organisations and contracting authorities will need to carefully consider the reputational impact of published information.
There will be other knock-on effects on staff involved in procurement and contract management:
· The new Act will not just be for procurement teams. People responsible for managing contracts across public sector organisations will need to stay up to speed with the new contract management requirements mandated in the Bill and receive training to ensure that they understand any new contract management requirements and can apply them properly.
· There will be more work for people to do across most organisations. The collection and management, as well as the publication of procurement information, will require additional time and resource; potentially making procurement more expensive and time consuming overall.
Top of the office
Finance directors and business leaders who have accountability for procurement are likely to face a new area of risk as a result of having to comply with these greater transparency requirements. They will therefore have a key leadership role in ensuring processes, controls and governance are up to date prior to the new Bill. Areas to think about and plan for include:
· Publishing data and information on procurement and contract management will likely expose any weaknesses in internal procurement and contract management practices.
· Investment in training, additional resource, and equipping staff up front to ensure that they are ready for the new Act.
· Assess whether your internal governance around procurement and contract management can cope with transparency requirements.
In2 the bargain 