There’s a major problem in public sector procurement, which is the lack of transparency about what is being spent, by whom, on what, with whom.
You wouldn’t think that transparency would be an issue if you looked on the websites for public bodies. Public procurement is ringed with rules and regulations, mostly mandated by the European Union, that place transparency and accountability at their heart. But there is always a gap between intent and action, and here is one of those key gaps.
Framework Spend Is Hidden Spend
Spend that goes through framework contracts can be hidden from the wider market, and hidden from the normal public procurement rules.
This arises because of two linked factors:
How much spend are we talking about? Well, because it’s not transparent, it’s not possible to answer the question. But lets put it another way: recent analysis showed that at least two thirds of all public sector spend on ICT in FY 2015/16 is not visible on Contracts Finder – the portal mandated by government for the publication of UK public sector contracts.
Does that mean it’s all going through frameworks? Who knows? Probably not all of it – a simple failure to follow the rules will account for some of the missing spend. There will be fluctuation in the value of contracts awarded each year that will also make it harder to match contract awards to actual spend. Some spend may be part of wider contracts for non-ICT spend categories, for example facilities management or research and development. But a fair chunk of spend on ICT is invisible to the market because it goes through one of a number of framework agreements.
Many Professional Buying Organisations in the public sector do publish information about contracts awarded under their frameworks. The Digital Services Marketplace (covering G-Cloud and now the Digital Services and Outcomes frameworks) leads the way, publishing all spend at a granular level. Information on tenders and contract awards, but not actual spend, is published for many other frameworks managed by Crown Commercial Service (CCS).
However, the type of information that is published varies between frameworks, and uses a wide variety of formats. It is also published only to participants on the framework itself, rather than to the wider market. As a result, it is extremely difficult to aggregate data across different parts of government, to form a joined up picture of total spend.
Lack of Transparency Limits Competition
To give an example of the challenges that this raises, let us consider an example – a company specialising in closed circuit and body worn camera products that is considering bidding for contracts in the public sector. The first question they need to answer is – how much demand is there in the public sector, and who are the buyers?
Closed Circuit Television is used widely across the public sector, from prisons to council offices. CCS ran a specific Lot on the PSN Services Framework for CCTV supply and services, which was intended to provide a route for all public sector buyers to purchase them.
CCS recently published contract award summary for the PSN Services framework. Over a four year period, the total contract value under Lot 2 (CCTV) was the princely sum of £612,411.
Does this mean that public sector spend on CCTV was only £150k per year? Obviously not. In this case, it means that buyers, for a number of reasons, chose not to use this framework and instead purchased CCTV through other routes. Perhaps they went via hundreds of other frameworks operated by the other 38 buying organisations in the public sector. Perhaps they issued tenders directly on one of the 400 electronic purchasing portals that exist across the public sector.
Who knows? Certainly not the supplier who is thinking about marketing their particular CCTV products to the public sector. They haven’t a chance of working out how much is being spent, or who is spending it.
Government policy over the last decade has been to increase the use of frameworks to aggregate spend and get better value for the taxpayer. But a side effect of this strategy is to reduce the availability of information on that spend.
We Need Open Contract Standards
At the heart of this, is the need for standards for the capture and sharing of data about public contracts, which reduce the cost and complexity involved in sharing information across government and the private sector.
What is needed is a minimum set of rules that apply to ANY framework that is established in the UK public sector, to ensure that the principle of transparency is maintained. Specifically:
It’s only in this way that potential suppliers will be able to assess the potential market for their products and services. And the key to getting better value for money in the public sector is ensuring that there is a diverse and active supply chain competing for business.