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January 9, 2023updated 10 Jan 2023 9:03am

Will new UK government procurement bill impact the way Whitehall buys technology?

New legislation will require government buyers to consider the needs of SMEs when posting work and make allowances that meet those needs.

By Ryan Morrison

Civil servants will have to consider the wider societal and environmental impact of any new contract under a new Procurement Bill which could give a leg up to SMEs when bidding against the big IT services providers (ITSPs). However, one analyst warned that without “significant education and training” for buyers, nothing will change in the way government departments buy IT products and services.

The new procurement bill is designed to make it easier for small businesses to bid on government work (Photo: fizkes/Shutterstock)
The new procurement bill is designed to make it easier for small businesses to bid on government work. (Photo by fizkes/Shutterstock)

The bill merges four existing pieces of legislation into one to create a “simpler, more flexible and less complicated” set of rules that the Cabinet Office says will “open up more government procurement for small businesses and voluntary and community groups”.

While “value for money” is still paramount during any contract bid process, the Cabinet Office says it will now also encourage buyers to consider other aspects beyond just cost, including the wider social and environmental considerations a different supplier might bring.

There are specific provisions in the bill aimed at lifting barriers for small businesses, including greater visibility for upcoming contracts, a central platform for showing available work in each area and a single website for SMEs to register on rather than bidding across multiple platforms. The government says this will give SMEs more time to gear up for bidding, bring down the cost and time required to bid on contracts and make it easier to find work to bid on in future.

The amount of insurance required to even bid on a contract will also be reduced. A “competitive flexible” procedure will be introduced to allow contractors to design more innovation into the process, which will benefit small tech start-ups able to adapt and iterate faster than larger companies.

One of the biggest changes for SMEs is a process aimed at strengthening prompt payment, to make it so businesses bidding for work throughout the public sector supply chain get paid within 30 days.

Cabinet Office minister Alex Burghart said: “This Bill will deliver on that, making it easier for SMEs, who make up 99% of UK businesses, to compete for and win government contracts, through smarter, simpler and more flexible regulations.”

New procurement bill may exclude some suppliers completely

As well as making it easier for SMEs to bid for work, the new bill will make it easier to exclude some suppliers completely. That includes those who have previously underperformed on contracts through the use of a “debarment register” that all public sector organisations can view.

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“The bill will also strengthen the government’s ability to exclude suppliers from bidding for work if there’s evidence of modern slavery in their supply chain, both in the UK or overseas,” a Cabinet Office spokesperson said.

Speaking at the Tech Monitor Public Sector Technology Symposium in November, Philip Orumwense, commercial director and chief procurement officer at government buying agency Crown Commercial Service said the government has been working on liberalising procurement for some time, to bring more SMEs into the supply chain and reduce bureaucratic barriers for small businesses.

“We’ve invested heavily in what we’ve called the public procurement gateway, which will be a way for suppliers and customers to interact,” he said. “Suppliers will be able to deposit their data with us once, and every government department will be able to reuse it time and time again.”

He added: “That will save you enormous time and energy in having to repeatedly give the same information to government.”

Change of behaviour needed to modernise government procurement

As well as simplifying existing rules, the bill introduces new guidelines that make it easier for the government to procure products and services during an emergency. This is a change driven by experience during the early Covid-19 pandemic and will ensure “contracting authorities can act quickly and transparently to buy vital goods”.

Government IT spending is dominated by large ITSPs, consultancies and Big Tech companies. Research by Tussell looking at strategic suppliers to the UK government across all sectors since 2015 lists IT services giants Accenture and Atos, along with AWS, Amazon’s cloud platform, as three of the top five beneficiaries when it comes to number of government contracts awarded in the last seven years.

Despite the law changes, this domination is likely to continue says Rob Anderson, research director for the public sector at GlobalData. He says that the bill will make it simpler for all firms across the spectrum “from small to very large” when it comes to bidding for government business, but just making the entrance door easier to navigate doesn’t make it easier to be successful in winning business as overcoming the “cultural norms by which government folk operate” are the biggest barriers to success for small businesses.

“The larger firms employ more people to influence buyers and so will continue to occupy prime position for contracts,” Anderson says. “The civil service is inherently risk averse, and particularly so in times of economic recession, so changes in the law are unlikely to alter their established methods of awarding contracts to companies they see as offering the lowest chance of failure.

“Unless accompanied by an extensive education and training plan for the commercial profession, it will have little impact in changing the status quo. Indeed, I recently spoke to one senior government buyer, who had received no communication internally on what the potential implications of the Bill are.”

Heather Cover-Kus, head of central government for techUK, the trade organisation that represents tech vendors, said: “The Procurement Bill has the potential to be a positive move for central government tech procurement.  For SMEs in particular, the Bill could open more opportunities for SME engagement with central government.  However, the real impact will be felt through the implementation of supporting secondary legislation.”

Read more: Whitehall loves the cloud, but the rest of the public sector is playing catch-up

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