NAO Provides Guidance On Open-Book Approaches – Focused On Less Critical Contracts

The UK National Audit Office is gradually expanding its role in the procurement and commercial field. As it has for many years, the organisation carries out value for money reviews of major topics and projects, producing reports that are generally very good - insightful and useful.

Whether their recommendations are implemented is another matter - too often, we get a Public Accounts Committee hearing with a bunch of politicians that goes for some cheap headlines rather than really holding organisations to account for making the changes and improvements identified by NAO.

But now, NAO is starting to produce more general good practice guidance, not necessarily related to a particular review, organisation or event. Some may still be positioned as formal reports, but interesting material is starting to emerge though "blogs" and shorter articles on their website.

We commented here last week on the Public Spend Forum Europe website about one such article. Joshua Reddaway, who leads the contracting and commercial practice at NAO, along with Richard Lewis from the organisation, wrote a very good piece about open-book, and what buyers should be looking for in open-book terms. But their focus in this case is not on the most critical contracts but for relatively straightforward contracting situations.

It is not clear that many people in the public sector really understand what they mean when they talk "open book", and it has become a bit of a panacea in our opinion, but there are important concepts here that procurement (and other senior executives in the buy-side organisation) should understand. And it is clearly sensible to apply different approaches depending on the size and criticality of the contract.

Reddaway and Lewis are perhaps being a little optimistic in suggesting the breadth and range of issues that should be covered in such procurements, but in an ideal world, we would fully agree with their ideas. Certainly, this provides a useful checklist for projects - and actually one that would be just as applicable in a private sector procurement environment. Concepts such as “understanding the supplier’s cost structure” really are pretty universal. Or they should be anyway.

You can read the original NAO article on their website here, and our more detailed review and commentary on the NAO ideas is here.

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