The Cabinet Office recently released a National Procurement Policy Statement to support the implementation of the Procurement Act 2023. This statement sets out the strategic priorities for public procurement in the wake of the Act and provides guidance on how contracting authorities can support these priorities.

The document has been created to help embed common benchmarks and standards and encourage continuous improvement in procurement, especially important given that around a third of public expenditure each year is now spent through procurement teams.

The statement will come into effect on the 28th October 2024, in line with the go-live date for the Procurement Act 2023 itself and sets out five key national priorities: value for money, social value, supporting SMEs, commercial and procurement delivery, and developing the skills and capability for procurement.

Oxygen’s James Himsworth, formerly the Procurement Lead at Middlesbrough Council, looks at what each national priority means, and the implications for both buyers and suppliers.

1. Value for Money

The policy statement instructs contracting authorities to place value for money at the forefront of their activities through the judicious balancing of efficiency, effectiveness, and economy.

The policy statement sets out an expectation that procurement teams should ensure that they have a good understanding of the policy / programme their procurement activity forms part of, and this is reflected in their market engagement and approach to the tender process.

 What this means for buyers:

• This reinforces the need for buyers to get up to speed on the wider context of their procurement activities.
• Buyers should ensure that what they buy adds value, supporting the move from MEAT to MAT, and that their work contributes towards the achievement of the project’s goals.

 What this means for suppliers:

• It is a reminder that successful delivery of services is one where suppliers help the buyer achieve their objectives.
• It is vital that suppliers understand the overall aims of the projects that their work will form part of, as reflecting this understanding in bids and subsequent delivery can only be a good thing and help establish a history of delivery.

 2. Social Value

The policy statement addresses social value, specifically supporting local suppliers and job opportunities, innovation, supply chain resilience, and environmental concerns.

Delivery against these goals should be done both through the specification of the goods, services, or works that will be procured, but also in the criteria and scoring matrices used to select a winning bid.

However, it stresses that these are seen as additional benefits and should not be used to burden suppliers through onerous requirements.

 What this means for buyers:

• Although at face value this hints at a dilution of the weighting given to social value, there has been a positive move around maximising public benefit – for example, the move from MEAT to MAT, and the publishing and monitoring high value KPI’s.
• Although not fully articulated here, these steps are part of a drive to embed elements of social value in public procurement processes.

 What this means for suppliers:

• Many suppliers, especially smaller organisations, are still getting to grips with how to adequately fulfil the social value commitments in tenders.
• This statement indicates that the government acknowledges their struggle and is prepared to clarify, and through clarification temper the impact of social value on bid evaluation.

3. Supporting SMEs

The guidance states that SMEs are the backbone of our economy and expresses a desire to open up more procurement opportunities to SMEs, voluntary, community, and social enterprises (VCSEs) to encourage competition, provide local employment, and drive innovation.

The guidance suggests that contracting authorities should aim to level the playing field by reducing or removing barriers to the process, although does not give any specific examples.

 What this means for buyers:

• The statement provides an indication of the direction of travel. The Procurement Act 2023 provides more detail, with the central supplier registration, along with enhanced transparency and market engagement, creating the mechanisms that will increase equitability for SMEs.

What this means for suppliers:

• Again, although not made clear in this statement, the changes that the Procurement Act will bring (see above) will provide early visibility to SME’s, giving them a seat at the table.

4. Commercial and Procurement Delivery

Buyers are urged to ensure that they have the right operational policies and processes ready to manage each stage of the delivery of what they procure. The guidance urges buyers to refer to the government’s Playbook series, specifically the Sourcing Playbook for best practice on sourcing and for sector-specific advice, pointing to the Construction, Digital Data and Technology, and Consultancy Playbooks.

What this means for buyers:

• By pointing to more detailed advice elsewhere, specifically the Playbook series, the statement provides useful and clear signposting.

What this means for suppliers:

• By familiarising themselves with the guidance set out in the Playbook series, suppliers can ensure that their delivery plans are fit for purpose.
• This will also improve the chances that suppliers are ready to meet the likely questions and reporting requirements from buyers throughout the key stages of commercial delivery.

 5. Skills and Capability for Procurement

The final aim encourages contracting authorities to make sure that they have enough people trained in both procurement and contract management to deliver against all the other aims.

It also points to the use of benchmarks to assess their performance, citing the Commercial Continuous Improvement Assessment Framework (CCIAF) from the government’s commercial function with NHS England and the local government as a useful professional standard to use in benchmarking for contracting authorities who spend over a hundred million per year with third parties.

What this means for buyers:

• This statement gives contracting authorities a starting point for how best to measure the procurement team’s performance.
• By being clear about the need to adequately resource the procurement function, this statement gives procurement teams additional leverage to request further resources.

What this means for suppliers:

• Understanding how procurement teams will measure their own performance will give suppliers a window on what will matter to these important stakeholders.
• By pointing specifically to the CCIAF, this gives suppliers further clues on how and what may be part of the scoring matrix for future procurements.

In summary, the statement indicates the direction of travel; reinforcing the importance of value for money, increased expenditure with SMEs and voluntary organisations, and bolstering skills around procurement and contract management, while giving buying authorities more leeway and discretion in how they deploy and measure social value aims.

However, the statement raises questions alongside the answers it provides, and so both buyers and suppliers will be seeking further clarification, especially around the assessment of social value, before the Act comes into force in the autumn.