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Strategic supplier relations: BIFM welcomes PAC recommendations

26-07-18 15:37 BIFM

The British Institute of Facilities Management has welcomed recommendations made by the Public Accounts Committee following its Strategic Suppliers Inquiry.

BIFM submitted evidence to the initial inquiry, along with a preferred model for outsourcing which can be used to contract strategic suppliers.

Characterising the public sector contracts market as a ‘merry-go-round’ culture, which encourages small numbers of companies to bid for contracts they cannot deliver for an agreed price in areas of weak expertise, the report concluded that the current model is not working. The current procurement model also appears to incentivise companies to focus more on process and tendering and winning bids than on ensuring the right service at the right price, it found.

Also under scrutiny was the rationale for contracting out – stated aims of saving money and encouraging innovation; are lost in a transactional process which ignores quality of service, resulting in knock-on cost and poor service to users.

The report suggests that the Government has failed to encourage competition and suggests that poor contract specification has led to uncertainty, cost increases, delay and delivery failures.

These are stark conclusions, and the resulting recommendations are to be welcomed. First to encourage government to look at lifetime cost and value of contracts and uplift skills to improve contract development. Second, that Government should enshrine winning bidders’ social value commitments into contracts and agree appropriate KPIs - something already committed to but yet to be written into law.

Further recommendations for Government include:

  • Standard contracts should be used widely and be designed to make it easier for SMEs
  • A Partnership model, as used in construction, for major, risky contracts should be considered
  • Consultation with SMEs on payments, project bank accounts and consortia building, as well as improving reciprocal due diligence with suppliers.
  • Approved procurement skills, with the Cabinet Office, toward establishing a contracting centre of excellence, ensuring that Departments adhere to its guidance.

The report, which includes is available online from the PAC here

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