Tories and procurement transparency

Tories are proposing that all public sector contracts with a value of over £25k should be published. That’s ostensibly to improve transparency, encourage competition and improve access to the public sector Market for Small to Medium sized Enterprises (SME). Lots of claims, no evidence…

Transparency is a bit of a red-herring. All contracts are liable to be published anyway, and in the event of a Freedom of Information request are likely to be released.  The contract award and rough pricing is already in the public domain for any contract procured through the Public Sector procurement processes sponsored by the Office of Government Commerce.  A presumption of publication sends an important message to the Market, but it’s hardly commercially innovative.

What’s more interesting is that it may have exactly the opposite effect of that intended and lead to restrictions in competition and locking down the market for new entrants. SMEs don’t have the staff numbers to really exploit the availability of the contract detail, so those that can benefit are those who can resource analysing them.

For commoditised products and services low cost is already the objective.  Whilst this initiative may support that then There is a clear risk that any added value in a contract becomes diluted in a race to the bottom.

For more complex requirements there is a risk that proposals end up converging on a standard, reducing choice, innovation and opportunities for benefits to be delivered. That may be what the Tories are wanting, standardisation has some benefit although hardly the forward looking dynamism of the electoral rhetoric.  There is a clear risk that it embeds existing machinery of government and limits opportunities for change, but I’m sure that’s been accounted for.

Finally, part of the purpose is to encourage lare and complex procurement to be broken up into smaller chunks, portfolio procurement rather than project procurement.  Again a reasonable suggestion although there are many efficiencies in scale and it’s likely to drive up the cost of running the procurements, increasing the risks around integrating many small solutions and reducing the opportunities to demonstrate real Value for Money to the taxpayer.  It’s a lot more complex to demonstrate benefit from a portfolio of smaller, inter-related projects and it’s not easily digestible by the media.

All in all it’s an interesting concept, as ever it really depends on how effectively it’s implemented should the party choose to do so, and be able to do so following an election.

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