The Challenge of Better Public Procurement

The challenge of better public procurement is felt right across Government, with many departments being asked to deliver better value for money and ultimately reviewing procurement processes in order to find efficiency savings. The focus on Defence, and in particular Defence procurement, in the first few months of 2018 gives the UK government and industry a real chance to address long-standing issues that have restricted a closer relationship in the past.

The Defence Industrial Policy Refresh (DIPR) and Modernising Defence Programme (MDP) have gained much attention from all corners and promise to set a coherent vision for UK Defence that is progressive, collaborative, and most importantly achievable. A large part of the MOD’s ability to deliver this will be judged on how contracting with industry can continue to evolve and represent a more modern way of doing business. It is clear that the current system does not adequately account for the wider economic factors of a bid, integrating these considerations is a stated aim of the MOD and wider Government. Widely described as the MOD’s ‘contribution to the prosperity agenda’ these factors include the value that may be generated in the local and regional economy, UK jobs and skills creation, any IP that may be generated in the UK, the export potential of the bid, as well as others.

Converting these factors over to open competition and bids which must be benchmarked and compared is undoubtedly a tough challenge. Cumulatively these criteria lend themselves to a qualitative judgement, rather than a decision based on the quantitative evaluation of data sets. Here the challenge for MOD is to move away from prioritising the bids which achieve the minimal technical standards at the lowest cost, and towards qualitative bids that include these prosperity criteria as key factors in the final decision.

This approach not only assists MOD in the collection of industry data, very useful for making the case to Government and Cabinet Office of the importance of the sector, but also gives SME engagement a shot in the arm. Judging bids based on a more rounded set of criteria allows SMEs to compete for contacts that are currently closed-off from all but the cheapest bids.

More rounded bids also lend themselves to greater export potential and a ‘UK offer’ that incorporates the best of UK SME innovation, as well as the pedigree and reliability of the Primes. The MOD acting as the first customer and an advocate of the UK capability remains one of the best ways for a British company to successfully export.

As the MOD enters another review of commercial and organisational processes it is imperative that new ways of thinking and working are explored; industry stands ready to provide support and to bring expertise and experience to the challenges that face Defence.