Public procurement in the news

There is a lot going on in the public sector today - we wait to see what the announcements on the £6 billion  savings will bring.

There was more in the Sunday Times yesterday about 're-negotiating government contracts'.

"The Sunday Times has learnt that large IT suppliers such as IBM and Hewlett-Packard have been put on notice that they might be expected to reduce the value of their contracts by 20-30%."

It also talked about organisations offering contract extensions in return for lower prices. Fine, but of course in the public sector, the option of doing that will depend on how the contract was initially advertised and let.  If your OJEU advert said it was a 4 year contract, unless it mentioned an option to extend, I don't think it can just be extended without breaking EU rules.  Even changes to specification in order to drive down cost may fall foul of EU rules; another supplier can make the claim "we would have won this contract if it had been advertised with this spec in the first place".  So I remain of the opinion that demand management - basically cuts in volume usage - will have to be the main mechanism for in-year, short term savings.

On a different note, NAO published a new report on Collaborative Procurement on Friday.  I have an interest so I won't say too much but it makes some very good points.  One thing worth stressing - while collaboration needs cooperation from potential users of the collaborative contract, it also requires very competent procurement from whoever lets the contract.  There is plenty of evidence that organisations will not use poor collaborative contracts - quite rightly.  So all those involved in putting these deals in place need to work at the top of their game if we're going to get public sector collaboration to work as well as it could.

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