March 12, 2014
Interminable UK public sector procurement deters suppliers, claims report
Last week’s story about the jaded view UK organisations have of the way public sector organisations buy goods and services provoked a great deal of discussion on LinkedIn. Now new research from specialist purchasing data analysts Spend Network has revealed that the UK government is the third slowest in the EU when it come3s to tendering. The UK government takes 53 days longer than the EU average, with only Greece and Ireland taking longer, and they’ve had their own particular economic problems to deal with over the last few years. The data is comprehensive, covering 1.8 million EU tenders over a period of five years. It found that it takes 172 days for the UK government to award a contract after the posting of an OJEU notice, at a cost to the economy of £22bn.
The Official Journal of the European Union (OJEU) is an online gazette of record for the European Union which publishes around 2500 new notices every week, including invitations to tender, prior information notices, qualification systems and contract award notices.
Ian Makgill, managing director at Spend Network, said: ‘Delays such as this not only create an unnecessarily challenging environment for SMEs, but also dissuade SMEs from engaging with government in the first place. Having to wait nine months to know if you’ve won a contract is really only feasible for larger companies, SMEs simply can’t operate with a nine-month delay on cash flow. With so little guarantee of money coming out at the end, a lot of SMEs won’t tender.’
Responding to the report, a Cabinet Office spokesman said: ‘Part of this government’s long-term economic plan is to make it easier for a diverse mix of suppliers to win public service contracts. Our own figures show that our radical programme of reform has seen average procurement timescales halved from 208 to 102 working days and our spend with SMEs has increased from £3 billion in 2009/10 to £4.5 billion in 2012/13.’
The Spend Network report calls on all EU governments to release specific information as open data to help speed up the procurement process and engage more productively with suppliers. This should include:
- Details about the closure of all EU tenders including information on whether they have been cancelled or awarded (at the moment only about 30 percent of UK tenders get a contract award notice specifying who won the work).
- Information on contracts, including where work has been awarded through government frameworks. Frameworks are short-lists of suppliers that are can be approached about specific pieces of work. There are many thousands of these across the EU and at the moment, there is no information about where a contract might have originated.
- Details of all government spending, with no monetary threshold (currently, most departments only publish their spending data over £25k). This should then be clearly linked to specific contracts, so it is possible to trace what money is being spent on which products and services from each supplier.
- A dataset with unique identifiers for every public sector body in the UK. Currently, there is no way to clearly identify every public body and so it is impossible to accurately link each organisation to specific contracts.