News

OGC's Procurement Capability Reviews on track to deliver transformation of Government procurement

Released on 24/06/2008

The Office of Government Commerce (OGC) has today announced that its programme of reviewing the procurement capabilities of Whitehall departments is already beginning to provide real benefits. The announcement follows the publication of the second round of reviews for the Department for Environment, Food and Rural Affairs (Defra), Department for Transport (DfT) and the Department for International Development (Dfid).

Procurement Capability Reviews (PCR) were announced in 2007 as a key driver in the Government's Transforming Government Procurement work led by the OGC, which looks to improve value for money from the £160bn public sector spend on goods and services.

Nigel Smith, Chief Executive at the OGC said:

"We very much welcome the involvement of the 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."

The overview report highlights the progress made in Tranche 1 departments - Department for Children, Schools and Families (DCSF), Communities and Local Government (CLG) and Department for work and Pensions (DWP) - following the publication of the first three reports last December.

Examples of the good progress being made include:

• development and launch of commercial strategies; 
• appointment of key senior commercial staff; 
• succession planning for senior management teams; 
• participation in the OGC graduate and fast track entry schemes; 
• implementation of organisational change and process improvements.

Following his department's six-month milestone assessment Peter Housden, Permanent Secretary of CLG, said: "We have found the process valuable, providing significant challenge around the value for money agenda and some food for thought around our business model. We welcome the continued participation of OGC colleagues in helping drive and deliver change."

Six Government departments have undergone Procurement Capability Reviews so far, and all Government departments will be reviewed by the end of this year. The reviews and departmental improvement plans are published on the OGC website.

Robert Devereux, DfT's Permanent Secretary, welcomed its PCR Tranche 2 Review saying, "We found the review a highly constructive process - helping identify a number of areas were we could improve our capabilities. We're already on track for improvements in a number of areas and have ambitious plans to deliver even better value for money in the future."

Analysis of key emerging themes from the six departments reviewed so far has identified the following top improvement areas that represent the biggest challenges for departments:

• a shortfall in highly capable commercial people;
• a shortfall in contract management skills and resources;
• the paucity of Management Information;
• lack of consistent measurement of performance;
• difficulty influencing spend outside the core department.

Some of the positive themes identified by the reviews include the following strengths:

• good people in procurement, with increasing levels of professional qualification;
• strong leadership from Heads of Procurement in the centre, with some good procurement functions in departmental agencies;
• increasing numbers of people at Board level with commercial focus and experience;
• procurement transactional processes and procedures are good, well used and understood.  There is a strong understanding of the need for collaboration;
• departments are making impressive savings through procurement.

Copies of the departmental reviews, overview report and improvement plans can be accessed on the OGC website.

Notes to Editors

About Procurement Capability Reviews

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 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.

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.

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.

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) leads government departments and the wider public sector to make improvements in buying goods and services. As an office of HM Treasury, the OGC works with central Government departments, and other public sector organisations, to ensure the achievement of five 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; 
• 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; 
• Assisting departments in the delivery of Government's policy goals on sustainability, innovation, equality and support for small and medium sized enterprises.

OGC is an expert in providing guidance and standards on procurement best practice, fostering productive partnerships and realising the benefits of collaborative solutions to meet the buying needs of the public sector.

It provides innovative ways to develop further central Government's capability in procurement, and leads the Government Procurement Service, which supports those operating as procurement professionals and those working towards gaining professional status within the civil 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