UK Public Procurement “Ones to Watch”

We started our new series recently, looking at UK public sector procurement issues that may not currently be headlines – but could be, for whatever reason, in the not too distant future. Here are three more today.

One that could go either way, and is much broader than a pure procurement issue, but very much bound up in commercial matters, is the Welfare to Work programme. The Department of Work and Pensions (DWP) have promised to issue a review “this Autumn” (which one would imagine means this month) of how the Welfare to Work programme is going.

The services, aimed to help unemployed folk into jobs, are being provided through a range of private and third sector providers, so it will be fascinating to see how the programme is going, and what this might mean for the stability and income of the providers. We’ve seen a few within the wider supply chain (not prime contractors) pull out, but really no major issues up to now. An improving job market would be great news for the suppliers, although the payment by results mechanisms put in place by DWP procurement protects the taxpayer even if performance is disappointing – although that wouldn’t be good politically of course.  One to watch anyway.

The Green Deal is a scheme to encourage householders to insulate their homes better. They won’t pay up front, but rather will see an increase on their utilities bills to cover the cost. The government has encouraged a group of energy and other firms to set up the Green Deal Finance Company (GDFC) , which will administer the scheme. It sounds like a decent enough idea, but when you get into the detail, it all starts looking a little complicated. It’s in effect a loan scheme to householders, so needs administering just like any other financial transaction. And clearly it involves potentially millions of individuals, various energy firms, the companies who install the insulation, and the providers of the finance. You start to see the complexity now...

Anyway, according to their website, the GDFC  is currently procuring back-office finance administration services to manage the scheme. “Our competitive outsourcing of the Green Deal Plans administration function is underway with full operational capability and back office functionality ready by April 2013. However, TGDFC is also developing an interim operational solution from January 2013 so that GDPs will be able to book loans with the Company at the start of the Green Deal”.

That all looks pretty tight to us...  we’ll see.

Finally, our friends at MOD are progressing with their plans to bring in a “strategic partner” for the Defence Infrastructure Organisation. It’s going to be a hard fought battle as the three short-listed bidders who came though the recent PQQ process are consortia, stacked full with big-hitting and credible firms:

  • Telereal Trillium / KPMG  / Mace
  • Serco / Bechtel / DTZ
  • Capita /  URS / PA Consulting

I wouldn’t like to pick a winner between those three!

This is seen as a bit of a dry run for the Defence Equipment and Support private sector partner / GoCo programme, which is at an earlier stage of development. But this DIO procurement really needs to run smoothly to set the scene for DE&S, so this is another high profile procurement, with potential consequences beyond its own immediate goals.

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