Procurement News
November 2017
Welcome to ‘Procurement News’.
This newsletter is for all public sector colleagues within the Department of Health and its ALBs who have an interest in procurement and commercial activities.
You may forward to colleagues within the health family (with gov.uk, nhs.net or similar email) who have an interest in commercial issues. If was forwarded to you, you can sign up to receive future editions.
If you have anything to contribute, feedback or suggestions for future stories please get in touch.
Rick Webb Procurement Policy Manager Department of Health
Crown Commercial Service customer updates: November 2017
The latest issue (published 7th November) is available here. This month there is news on:
• How government is addressing the upcoming changes to data protection • Join a CCS aggregation and make great savings • Upcoming events • Exhibitions • Communications brochure • New frameworks: Management Consultancy (RM3745) • Latest procurements: Health and Social Care Network Access Services (RM3825), Behavioural Insights (RM6004) • Frameworks expiring shortly: Wider Public Sector Travel Management Services (RM1034), ConsultancyONE (RM1502), Legal Services (RM919), Printing and Specialist Paper (RM1078), Behavioural Insights Consulting and Research (RM3742) • Recently expired frameworks: Customer Based Testing Services (RM995) • Framework extensions
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Procurement Policy Notes (PPNs)
All Procurement Policy Notes (PPN’s) are published on the CCS website here.
No new PPNs have been published since the last edition.
CCS – Public Bodies Band Together on New Mobile Voice and data Procurement
CCS is currently seeking expressions of interest from Public Sector buyers to join the bulk buying activity for the purchasing of mobile voice and data services. These expressions will allow buyers to send their individual requirements to CCS to inform the wider specification to make sure that the agreement is open to as many public sector bodies as possible.
The contract will offer flexibility by:
• Establishing a zero line rental model for basic connections, avoiding customers incurring costs from unused lines • Structuring services as ‘bolt-ons’ which can be added to the basic connection, enabling packages to built to customer specifications • 30-day terms for ‘bolt-ons’ to enable customers to change their mix of services during the contract term
If you would like to be part of this process please select the Get in Touch button on the CCS Website.
Move from Richmond House to 39 Victoria Street
Moves have been taking place over the last few weeks to move DH staff from Richmond House to 39 Victoria Street and are set to be completed in December 2017.
The workspaces in 39VS will allow staff to choose how they work for the specific task they are working on, whether this be a standing desk, collaboration space or a quiet area. They will allow staff to be flexible and adapt to changing priorities resulting in greater working efficiency.
We have been working to advise our suppliers of the changes for our larger contracts. We are advising all Contract Managers to check that all the contact details in contracts are valid and correct, particularly the names and addresses to which formal notice under the contract should be served in the event of dispute or termination. Our Contract Management team will assist with any necessary updates/variations
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Changes to the OJEU Thresholds
The thresholds for European public procurement are due to change on 1st January 2018.
The Commission has not yet published exact details of the changes though this usually happens late November or early December.
Procurement regulations set out the rules that contracting authorities must follow when procuring contracts. Contracts exceeding the thresholds must follow the applicable regulations.
The threshold amounts are adjusted every two years based on the average daily value of the Euro. The thresholds are higher for local government than central government. The amounts are exclusive of VAT.
New Contract Management Best Practice Guide
On 18th October 2017 the new Cross Government Contract Management Best Practice Guide was launched at a GCF Best Practice event led by Vicky Ladizhinskaya. The new Guide and its interactive suite of tools, templates and process maps have all been added as a new tab in the GCF Knowledge Hub.
The Contract Management Best Practice Guide can be found on the grey bar at the top of the main GCF community page.
First Contractor Verified under BRE’s Ethical Labour Sourcing Standard
In response to the Modern Slavery Act 2015 the Ethical Labour Sourcing Standard was created to provide a tool for organisations to be assessed. The standard is intended for organisations operating in the UK whilst still recognising that these companies will operate in globally connected supply chains.
Sir Robert Alpine (a construction firm) has become the first contractor to be successfully verified under this standard having been assessed on the following areas:
• Organisation Structure • Bribery & Corruption • Management Structure • Forums • HR • Management Policies, • Procurement • Immigration Page 3 of 8
• Supply Chain management • Reporting and Assurance & • Learning & Development Compliance
More information is available here
Launch of GCF Northern Hub
The Government Commercial Function’s leaders in the North are joining forces to leverage their collective networks and create a GCF Northern Hub. It will be open to all who work in commercial roles in a central government department and Arms’ Length Bodies
Examples of opportunities to engage include the GCO Northern Council and GCF City Facilitators.
Join this group through the Knowledge Hub here: https://khub.net/group/gcf- north/group-forum
Contract and Spend Insight Engine (CaSIE)
CaSIE is a government commercial function communication tool that provides information about government’s contractual landscape to facilitate collaboration between Departments. The system takes data from existing systems such as Contracts Finder and Bravo to create a complete picture of spend and commitment.
All commercial professionals within the Commercial Function are expected to use this tool. Release 1 was launched in September 2017 and a beta version went live on 27th October to CO, BEIS, DWP, HO, MoJ, DfT and DH. This release includes information about contracts, suppliers, procurement activity and bespoke requirements.
User testing in this controlled environment will allow the multi-disciplinary team to improve the functionality, advance data availability and improve support material and services. It is anticipated that the wider commercial community will have access to align all data across Government such as CCS and the Complex Transactions Team in January 2018.
If you have questions you can direct them through the following channels:
• Your Department Single Point of Contact for CaSIE (SPOC) and /or CaSIE Power User (s). • Refer to the Customer service desk: o Email [email protected] o Contact form http://ccs-forms.cabin... o Telephone 0345 410 2222 (9.00am to 5.00pm Monday to Friday)
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To support your understanding of CaSIE the following documents have been produced, all of which can be found in the GCF knowledge hub. https://khub.net/group/gcf-community/group-library
• CaSIE brochure (attached to this email and for cascade to your team) • A Quick Start User Guide • An FAQ document • Training video (to be available next week)
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Government Commercial Operating Standards (GCOS) Best Practice Sessions
Below is a list of upcoming GCOS Best Practice Sessions which are talks led by commercial experts from various government organisations.
They aim to provide staff with knowledge and solutions about issues that they face in their respective roles, and will consist of presentations, discussions and networking opportunities.
Dynamic Purchasing Systems: Presented by Lindsay Maguire (DWP) & Ron Gorham (NDA) Monday 20 November, 13:00 to 15:00, Sheffield For tickets: www.gcos-dps.eventbrite.co.uk
Understanding Commercial Risk: Floods & Coastal Risk Management Programme: Presented by Ian Wilson (DEFRA) Thursday 23 November, 14:00 to 16:00, Liverpool For tickets: www.gcos-risk.eventbrite.co.uk
Supply Chain Management (SCM): Presented by Vanessa Bold (HS2) Monday 27 November, 15:00 to 17:00, London For tickets: www.gcos-scm.eventbrite.co.uk
Competing Grants: Presented by David Morley (DEFRA) Thursday 30 November, 14:00 to 16:00, Manchester For tickets: www.gcos-grants.eventbrite.co.uk
Organisational Transformation & Commercial Role Profiling: Presented by Ann Harms (DWP) Wednesday 6 December, 10:30 to 13:00, Leeds For tickets: www.gcos-transformation.eventbrite.co.uk
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Changes to Accounting Rules affecting Financial Reporting
Two changes to international accounting standards will affect how companies report their financial position, and may also affect the operating practices and contracting decisions of some big companies. At the moment they only apply to the big suppliers who operate internationally.
The first rule change relates to how companies recognise and report revenue from customer contracts that run over multiple years (this rule is known as IFRS 15). Under new guidance, companies will have less flexibility in how they spread the profits from multi-year customer contracts over those years. This does not directly affect the cash flow of a company. It affects their profits and the tax they pay on it, thus, many companies may look to change the nature of the multi-year contracts that they offer. More than a third of the government's strategic suppliers anticipate a significant change in revenue as a result of this rule change. The second rule concerns how companies report their operating leases (IFRS 16). Here, companies will be required to bring all significant leases onto their balance sheets, reporting them both as an asset (a ‘right to use asset’) and as a debt in terms of the future payment obligations. As a result, some companies may need to report significantly higher levels of debt after this rule change is introduced by 2019. This change affects all the government’s strategic suppliers, with most still working out the scale of the impact and those who have (around a third) estimating the impact to be significant. Companies must introduce these reporting changes by January 2018.
For more information, contact Des Oliver in the Markets & Suppliers team at [email protected] or read his report on the Knowledge Hub which describes the impact of these changes.
Leeds Cross Government SME Roadshow
This is an opportunity for SMEs in Yorkshire to hear directly from Central Government and Local Government including; DWP, MoJ, CCS, DH, NHS England and NHS Digital and Leeds City Council.
It is an opportunity for SMEs to meet the teams who make purchasing decisions. In addition, it will allow for greater understanding about how to find opportunities, how to bid for contracts and what happens following contract award.
Key speakers include: Emma Jones – SME Crown Representative Liz Freeman – Category Specialist, CCS Elizabeth Vega – SME Panel member and supplier to government Page 6 of 8
Stephen Tokely – Small Business Policy Team, CCS and representatives from DWP, Ministry of Justice and Leeds City Council
Further information can be found here
Exiting Major IT Contracts
In November the Cabinet Office has produced guidance on exiting major IT contracts. The document includes information about the principles for disaggregation as well as highlighting critical tasks and key success factors and advising policy documentation and resources.
To compliment this guidance, 5 case studies from DVLA, HMRC, DEFRA and the Land Registry DITI have been published.
The guidance and case studies are found here
GCF all staff calls
The transcript for the Government Commercial Function All Staff Call held on the 6th September is available here: https://www.khub.net/group/gcf-community/group- library/
The next call is scheduled for 12th December. You can register now on Khub.
If you're on Twitter, follow @GCF_Comms for news and information about the Government Commercial Function.
Case Law Updates
The effect of two cases are worth noting in this procurement update on some significant legal developments.
In the first case (LitSpecMet UAB v Vilniaus Iokomotyvu) the European Court of Justice gives useful guidance on the status of a public sector owned company. The question arose whether such company would itself be ‘a public body’ and therefore subject to the public contract regulations in its own procurement activities. The court found that a company which was wholly owned by a contracting authority and which carried out activities both for its owner as well as in a competitive market is a public body where the activities of that company are necessary for the contracting authority to fulfil its own functions in the public interest. Where this test is satisfied the Court found that it does not matter what percentage of its turnover is represented by the provision of services to its public authority owner.
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While this decision is significant, the test of necessity is not always an easy test to meet, the question of what it means to be ‘necessary’ to fulfil functions will no doubt be further explored by the courts. There is also the issue of whether the rule is an exclusive definition for public sector companies, i.e. whether there are other arrangements or circumstances other than under this test in which public authority owned companies will be treated as public bodies or whether this is the sole basis. If it is a restrictive definition, it would potentially take out many companies owned by public sector where the subsidiary was a supportive or indirect rather than an essential element in the delivery of the parent public service function.
In the second case (Cemex UK Operations Ltd v Network Rail Infrastructure Ltd (2017), the High Court found that once a claimant issued proceedings against an authority it could not then delay providing further and better particulars of its claim until after the Authority had disclosed certain documents as part of the trial process.
This is significant as it makes clear that, except in very limited circumstances, a claimant when it starts proceedings should have a clear view of the basis for its claim and not use the court procedures to bolster what would otherwise be an unsubstantiated or speculative case (more commonly known as a ‘fishing expedition’).
The claim related to an allegation from Cemex that the winning bidder had made an abnormally low tender. In an interesting view the court considered the issue of abnormally low tenders to be essentially a form of ‘manifest error’. This means the courts would be very reluctant to interfere in an authority’s evaluation of price, unless it is apparent on the face of it that the decision is not correct. In both of these areas, relating to disclosure in course of court proceedings and on the nature of manifest error, this decision is very unlikely to be the last word in what are complex areas where the outcomes depends on the specific facts but the case can be considered to be useful outcome from a contracting authority’s perspective.
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