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Office of Government Commerce

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.

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Office of Government Commerce

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  1. 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

  2. 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

  3. 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

  4. 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

  5. PROCUREMENT POLICY UNIT (OGC) DOMESTIC VFM POLICY EU AND INTERNATIONAL DEVELOPMENTS APPLICATION of EC RULES • 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 • Advice on what the rules say …. • ….and what they mean. • Handling UK infraction cases • 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 EUROPEAN PUBLIC PROCUREMENT NETWORK PPN = cross border, pre-contract problem solving network with a best practice dimension

  6. UK Domestic Policy • Requires all purchases of goods and services to be based on value for money, having due regard to propriety and regularity • 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“)

  7. 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

  8. 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

  9. Second round ofconsultation • 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

  10. 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)

  11. 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

  12. 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

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

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