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Legal Updates

Procurement for growth - new Cabinet Office guidance

04 July 2014 #Public Sector

On 21st May the Cabinet Office issued new ‘Procurement for Growth’ guidance (‘Guidance’) on how the public sector can maximise economic growth via its procurement processes. The guidance followed the launch of the Government’s Procurement Pledge at the end of April 2012.

The Guidance aims to assist contracting authorities in increasing their economic growth through the way they procure their goods and services. The guidance advocates early engagement with the market in order to ascertain the position of service providers, and publication of pipeline future requirements which will allow the market to better prepare for future demand. It is intended that this approach will level the playing field for UK based suppliers. The Guidance states that communication is key to advocating genuine two way conversation between contracting authorities and a wide range of suppliers.

The Guidance refers to the use of a lean sourcing process which it says is vital to successful procurement for growth. This approach includes a simple five stage process which will stream line activity and reduce wasted time and costs. The process encourages contracting authorities to be clear about their requirements from the outset, and to define success in outcome terms.

In line with the approach taken in the new Procurement Directive, the Guidance asks contracting authorities to consider using shorter contracts and breaking their requirements down into lots. A common mistake often made by contracting authorities is the assumption that larger firms are better to do business with. The Guidance warns contracting authorities against giving marks in their evaluation criteria for size of turnover, numbers of staff or size of contracts. Such practices discriminate against small businesses and make it more difficult for them to take advantage of procurement processes. The Guidance also says that contracting authorities should not insist on onerous insurance requirements, and must set out requirements which are reasonable and proportionate to the services or goods being procured.

Contracting authorities should bear in mind the Guidance at the outset of any new procurement and in formulating their wider Procurement strategies. The Guidance is closely aligned to many of the changes that will be introduced in the new Procurement Directive to favour small businesses.

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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