The head of the Office of Government Commerce (OGC), Nigel Smith, has warned of the perils of developing a Public Sector Network which is only used by a few organisations.
In a speech delivered to delegates at this week's SmartGov Live and reported on our sister site Kable, he said: "What government can do is to mandate for interoperability, but you have to have a view about local flexibility," he said.
Smith said that he believed government organisations should be mandated to use shared services. But he added that one of the problems with compulsion is that unless people can see the benefits, it will not work. "As long as they can see that they are having something good it will be welcomed," he said.
Outlining his vision for the future of public sector procurement in 20 years' time, he offered five predictions, one of which was the OGC carrying out much of departments' procurement needs.
"My prediction is that commodities will be procured on behalf of organisations by professional buying organisations, with much reduced price variation," said Smith.
Secondly, electronic procurement will become standard. Currently, electronic auctions are only used for 2% of public sector spending, even though average savings are about 20% and often more than 30%, he said. Smith added that there is "fantastic practice going on in government, but we don't have consistency".
An Amazon e-market place
In future, he said that "all tenders will be electronic and e-auctions will be a standard tool. And, yes, we will have an Amazon e-market place with a repository of pre-procured solutions, to increase the supplier base and increase best value."
Thirdly, the relationship between customers and suppliers will become more collaborative. "Visibility of government aggregated demand is core, with suppliers having a forward look at opportunities and offering innovative solutions for required outcomes."
There is too little attention to continuous improvement within contracts, in Smith's view, and there are large variations in prices paid for the same service, which must change.
He also said that "transparency" is limited to OJEU reporting, a situation which does not encourage innovation, accountability and drive increased value.
"My prediction is that we will provide full visibility of the demand on an easy access portal with access to all government opportunities. We will have embedded flexible outcome based contracting, with payment by results," he said.
Fourthly, that access to supplier opportunities will become simpler, with standardised PQQs (pre-qualification questionnaires). Currently, there are no standard PQQ processes to minimise the burden on the supplier and which can be adapted to the size of the tender, which is particularly difficult for small businesses.
"My prediction is that we will have a standardised reusable and flexible PQQ process, universally applied and based on e-tendering platforms with full interoperability," he said.
His fifth prediction was that there will be fewer public sector procurement professionals working more effectively. Whitehall procurement capability reviews have identified skills and capability as the most significant weakness, he said. Although much has been done within departments to address this problem, Smith said that more was needed: "We need to stop buying and start procuring."
"My prediction is that we will have an effective shared service for government covering all commodity procurement, with specialist professionals with best practice category knowledge. We will have fewer but highly skilled professionals focusing on the most complex procurements, whether they be infrastructure, outsourced core services or commissioned services from the private sector."
But he added that there are significant challenges given the size and complexities of government projects. "The challenge we face in the public sector is massively greater than it is in the private sector, and I include organisations like BP in this," he said. "There is no project in the private sector which matches even a medium sized project in the public sector."
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