News

OGC publishes third round of Procurement Capability Reviews

Released on 25/11/2008

The Office of Government Commerce (OGC) has today published a third round of Procurement Capability Reviews for the Department of Health (DH), the Home Office (HO), HM Revenue and Customs (HMRC) and the Ministry of Justice (MoJ).

Procurement Capability Reviews (PCRs) were announced in 2007 as a key driver in the Government's Transforming Government Procurement work led by the OGC. So far 10 out of 16 reviews have been completed, and the programme is on course to review all departments by December 2008. PCRs are a key enabler in improving value for money from the £175bn public sector spend on goods and services.

Nigel Smith, Chief Executive at the OGC said:

"In the current economic climate, it is as important as ever that effort is maximised to ensure the taxpayer is getting value for money from public sector spend on third party goods and services. We very much welcome the continued involvement of departments in our review process and thank them for their participation. Through working closely with the departments we have identified areas for improvement and they have developed plans in response to ensure more of a focus on enhancing capability and achieving improved value for money from their spend.

"A lot of great work has been identified, and we do recognise that there is a significant level of professionalism that already exists. Those departments that have gone through the process have already seen the benefits of the reviews. In order for the Government to ensure that it meets its efficiency targets, it is imperative that departments work on the issues identified by the reviews, and work with the OGC on realising the real benefits of change."

Sir David Normington, Permanent Secretary at the Home Office said: 
 
"The Procurement Capability Review has provided a robust means of assessing our commercial capability. It has provided me with assurance that we have come a very long way in the last 2 years, and I am very pleased with the results.
 
"Clearly, we need to maintain our focus and progress and will do this through the follow-up action plan which will become embedded in the 2009/10 Commercial Business Plan."
 
Suma Chakrabarti, Permanent Secretary of the Ministry of Justice said:

"The review recognised that the MoJ is a very new Ministry at just 18 months old, bringing together responsibilities from the Department of Constitutional Affairs, the National Offender Management Service (NOMS) from the Home Office, and the Office of Criminal Justice reform. Perhaps not surprisingly, the procurement landscape is evolving with some examples of best practice and other areas where improvement is needed.  

"We are committed to addressing this; a new MOJ-wide procurement strategy has already been approved and implementation is underway.  This is a far reaching improvement programme designed to produce significant savings while addressing the issues raised in the review and beyond."

Hugh Taylor, Permanent Secretary at the Department of Health said:

"I welcome this review by the OGC, which recognises the significant progress made by the Department and identifies areas for further development on which we are taking firm action to develop our commercial capability.

"The commercial strategy and operating model we are developing will decide how commercial skills and expertise are most effectively organised and deployed within the Department, the NHS and more widely, to meet evolving needs and to support the Department's objectives of better care and health outcomes."

Lesley Strathie, Chief Executive of HM Revenue and Customs said:

"I welcome what is a very positive review about the procurement capability and performance in HMRC. This reflects well on everyone concerned, since it places us at the forefront of procurement in Whitehall. I acknowledge the areas for further improvement identified by the OGC panel, and HMRC will actively take these forward."

See OGC website for Tranche three reports.

Notes to Editors

About Procurement Capability Reviews

Purpose
Procurement Capability Reviews were announced for all Government departments in January 2007 as a key enabler of the Transforming Government Procurement report. Focussing on how and where a department's money is spent, and how it achieves value from that spend, a PCR provides an independent, strategic view of the overall procurement capability of the organisation and its wider network of agencies, identifying exemplars as well as areas for improvement. OGC is committed to delivering 17 reviews by December 2008. The PCR tranche 1 and 2 departmental reports, improvement plans and overview report can be found on the OGC website.

Procurement Capability Reviews (PCRs) are a central element of Transforming Government Procurement. They assess how far government procurement meets the demanding standards required to deliver value for money services now and in the future. Working with departments in concert with other OGC workstreams and HM Treasury, the reviews will drive improvements in procurement capability where the greatest impact can be achieved.

Departments reviewed so far include the Department for Environment, Food and Rural Affairs (Defra), Department for Transport (DfT) and the Department for International Development (Dfid), Department for Education and Skills (DfES - as was) the Department for Communities and Local Government (CLG), and the Department for Work and Pensions (DWP).

Scope
The reviews perform a challenge function at strategic and structural level, covering the widest definition of procurement from commodities through to complex PFI projects. The department's procurement activities across the whole lifecycle, from policy and strategy decisions to delivery and disposal are considered. Programme and project management (PPM) capability is therefore included in the review. The full length of the Department's delivery chains are explored, from central departmental functions, through to Agencies, Non-Departmental Public Bodies, partners (commercial and non-commercial) and end users.

OGC's Procurement Capability Reviews complement the Cabinet Office's programme of capability reviews, by focussing on the contribution of procurement capability to successful delivery. PCRs draw upon these and other sources of information including NAO reports and Gateway Review summaries.

The nine areas examined as part of the reviews are: Visibility and Impact of Leadership; Business and Policy Alignment; Stakeholder and Supplier Confidence; Resourcing; Intelligent Client Capability; Governance and Organisation; Sourcing and Collaboration; Use of Tools and Techniques; and Knowledge and Performance Management.

Programme
The review model and associated processes were piloted during the spring, and then refined taking account of lessons learned and further stakeholder consultation.

The review teams include high calibre commercial, procurement and PPM experts drawn from the public and private sectors. Reviews take place over an intensive period of three to four weeks, following extensive preparation. The programme includes a moderation phase between each tranche of three to five reviews. Following moderation, scores and departmental improvement plans are published. OGC will monitor progress via stocktakes and will follow up with a second round of reviews after 24 months.

Benefits
PCRs provide an independent, strategic review of government procurement, identifying exemplars as well as areas for improvement. Departments will be able to see how others are performing and pan-government lessons will be identified. Suppliers and non-commercial partners will have the opportunity to inform the reviews and will benefit from the resulting improved capability in the delivery chain. Expert input will support procurement directors in raising the impact and influence of the procurement function, resulting where needed in earlier consultation on strategy and policy decisions; investment in targeted development of professional expertise; more control over spend and access to the best government deals, all ultimately leading to greater value for money and improved public services.

About the Office of Government Commerce

The Office of Government Commerce (OGC) is an independent office of HM Treasury, established to help Government deliver best value from its spending.  The OGC works with central Government departments and other public sector organisations to ensure the achievement of six key goals:

• Delivery of value for money from third party spend; 
• Delivery of projects to time, quality and cost, realising benefits; 
• Getting the best from the Government's £30bn estate; 
• Improving the sustainability of the Government estate and operations, including reducing carbon emissions by 12.5% by 2010-11, through stronger performance management and guidance; 
• Helping achieve delivery of further Government policy goals, including innovation, equality, and support for small and medium enterprises (SMEs); 
• And driving forward the improvement of central Government capability in procurement, project and programme management, and estates management through the development of people skills, processes and tools.

OGC provides policy standards and guidance on best practice in procurement, projects and estate management, and monitors and challenges departments' performance against these standards, grounded in an evidence base of information and assurance.  It promotes and fosters collaborative procurement across the public sector to deliver better value for money and better public services; and it provides innovative ways to develop Government's commercial and procurement capability, including leadership of the Government Procurement Service.

Media Contact:
Michael Dunning, Media Relations Manager
T: 020 7271 1318
F: 020 7271 1345
M: 07771 815245
E: michael.dunning@ogc.gsi.gov.uk

Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk