Market Implications of the Procurement Act
The Procurement Act has slipped slightly under the radar due to the election of a new Government. However, it is due to go live in less than six weeks and will have a profound impact on the way in which public services are commissioned.
There will be some seismic changes in the way in which tenders are procured, scored and awarded. Previous contract performance will now play an important role in defining which service providers are awarded a contract. As Peter Drucker stated, “if you can’t measure it, you can’t manage it”.
Criteria for Publishing Contractual Performance Information
Contracts worth more than £5 million will require commissioners to publish at least three Key Performance Indicators (KPIs)
KPIs will be used as a tool to assess a provider’s performance throughout the duration of the contract
Commissioners will be required to review KPIs at regular intervals and publish data at least once every twelve months
Publication of Big Contract Performance
The Cabinet Office has been publishing performance data on the Government’s most important strategic contracts since September 2020. All this information is in the public domain and provides a snapshot of contractual performance across flagship contracts procured through Government Departments including DWP, DfE, MoD and DoHSC.
Market Implications for Providers
Past contractual performance will become a key criterion in scoring future bids. Writing a winning proposal will no longer be enough to secure a large contract
Current contractual performance should be given the same strategic importance and focus as the wider business development and sales process in securing future business
The three KPIs published through the Cabinet Office should be rigorously monitored and reviewed to ensure they are being met. Having the right performance systems and tools in place to analyse performance is essential
If underperformance is identified, this should be addressed and rectified as soon as possible to mitigate the risk of contractual and reputational damage
Publishing performance data and making it publicly accessible will permit greater competitor analysis and enable providers to focus on securing contracts that are perceived to be underperforming
Market Implications for Commissioners
Conduct market testing and engagement to ensure that KPIs are achievable and reflect market capacity and capability
Requirement to identify KPIs that are transparent and drive contract performance
Benchmarking KPIs against similar programmes to better understand previous market performance
Having the monitoring and evaluation systems in place to effectively manage KPIs and address underperformance
How 50 Degrees can help
Performance improvement and data analysis is something that we at 50 Degrees have been undertaking for clients who are recognising the importance of this in the future sales cycle.
If you want to have a chat about optimising your contractual performance and gain a deeper understanding of existing Cabinet Office data, please reach out: david@50-degrees.com