The role & function of the Office of Government Commerce (OGC) in developing the UK public procurement system, the role of OGC’s Procurement Policy Unit & UK approaches to implementation and to framework agreements Peter Bennett Valletta: 25 January 2006

Office of Government Commerce Created in April 2000 OGC helped to realise £1.6 billion value for money gains in 3 years up to 2003 Target saving by 2007/08 is £3 billion in central government OGCbs (Buying Solutions) – commercial arm of OGC

Sources of vfm improvements Greater focus on quality & whole life costs Reducing process and transaction costs Co-ordinating departmental & Government purchasing power Wider involvement of professional procurement staff Gateway reviews – improvement in cost & schedule performance of major projects

Developing role OGC’s core area of operations was initially central civil government Increasingly working across the wider public sector and local authorities Efficiency Programme

PROCUREMENT POLICY UNIT (OGC) APPLICATION of EC RULES Advice on what the rules say …. ….and what they mean. Handling UK infraction cases EU AND INTERNATIONAL DEVELOPMENTS DOMESTIC VFM POLICY EUROPEAN PUBLIC PROCUREMENT NETWORK Representing the UK:- - negotiating new Directives influencing the development of Commission policy, and EU line in WTO “margins” work influencing other WTO members representing UK on EU learning lab PPN = cross border, pre-contract problem solving network with a best practice dimension Ensuring value for money (vfm) policy is understood and applied Working with OGDs to ensure that pursuit of other objectives through pp does not undermine vfm eg fairtrade, race relations, sustainable development Developing policy eg on remedies

UK Domestic Policy Requires all purchases of goods and services to be based on value for money, having due regard to propriety and regularity (Value for money = "the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer's requirement“)

Policy and Law Directives and Treaty complement UK policy No UK law before implementation of Single Market Programme, early 1990s Unil end January 2006, 4 basic Regulations, each of which show how remedies can be sought References on OGC web site (www.ogc.gov.uk) and link to text of regulations 2 new Regulations implementing 2004/17 and 2004/18 will replace the existing regulations

UK implementation - UK implementing regulations will come into effect on 31 January 2006 2 rounds of consultation in 2004 & 2005 Respondees to first consultation wanted provision for optional issues eg frameworks in the UK Regulations - second round of consultation on draft Regulations in summer 2005

Second round of consultation 79 responses received from a variety of organisations Draft Regulations welcomed, as was OGC’s approach to detailed implementation & providing clarification in guidance Separate decision on including Alcatel provisions in the new Regulations OGC response to consultation sets out areas for guidance

Second round of consultation (2) areas for guidance include: - reserved contracts (Article 19) - framework agreements ` - central purchasing bodies - electronic auctions - dynamic purchasing systems - competitive dialogue - mandatory exclusions (Article 45)

Frameworks and implementation Guidance published May 2004 Frameworks covered in first consultation note Responses indicated that the guidance was good and article 32 helpful Guidance updated Training module covers frameworks Issues on frameworks: use of mini-competitions & clarity that they are not approved lists or qualification systems

Notable OGCbs frameworks Gcat - IT products - £87m saving 2003/04 S-Cat - Consultancy & other specialist services eg management consultancy; financial services; HR services; IT consultancy and services; and business information & research - £39m saving 2003/04 Use of OGCbs frameworks is voluntary

Conclusions on frameworks Can save transaction costs Can provide vfm savings Will be helpful for suppliers As long as properly and fairly operated