Understanding the Public Services Industy

Public Services Industry Review
4.24 Ensuring the required outcomes are made clear in contracts will need continuing
endeavour. Spreading best practice – promoting and publicising examples of
procurement that does capture service outcomes well – will be an important element
of this. One strand of work to take this agenda forward is being financed by the HMT/
Cabinet Office Invest to Save Budget. This work is being carried out by a consortium
led by the Office for National Statistics 42 . The aim is to construct a procurement tool
based on model specifications of the multidimensional service domains sought from
particular key public services. Work to date has concentrated on Adult Social Services
and Pre-School Education Services but will be extended to cover other services.
The interim report of this work will be published in July 2008 and the final report in
December 2009.
Multiple objectives in the procurement process
4.25 A separate but related concern was that the procurement process is increasingly being
used to achieve wider government objectives such as encouraging the development of
small business 43 and contributing to environmental or social goals 44 . Having numerous
objectives makes the process more complicated and costly both for those bidding
and for those evaluating the bids. This cost should be factored into decisions on the
appropriateness of such objectives. In many cases tax or regulatory instruments
should be preferred.
4.26 Where procurement is used to achieve wider goals, setting minimum standards is
often the best approach. For example, specifying minimal environmental requirements
will clarify the objective for bidders and avoid the need for commissioners to make
difficult assessments when comparing bids on a range of different factors. However, it
will be important that the potential to increase costs and the impact on the number of
bidders is taken into account when setting the requirements.
4.27 It was generally accepted by stakeholders that multiple objectives are likely to
continue, and often for valid reasons 45 . Indeed these objectives are sometimes
fundamental, for instance where the service is responding to specific, project-related
environmental or social needs. Stakeholders’ primary concerns were that these wider
objectives are not always made clear at the outset and sometimes alter during the
bidding process. This has led to problems for bidders as they are not able to tailor their
bids to fit the final requirement and in some cases ended up bidding for work whose
redefinition meant that they had little chance of winning.
42 Including the National Council for Voluntary Organisations, the National Institute for Economic and Social Research, the
Personal Social Services Research Unit and Kent, Manchester and Sheffield Councils.
43 The Glover Review is for example looking into the feasibility of setting a target for Government contracts given to SMEs.
44 Sustainable procurement in Central Government , NAO (2005).
45 The Office of the Third Sector CO, is currently undertaking work to explore how social clauses can be used to maximise
social value in procurement.
45