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Commissioning and procurement

From outsourcing social welfare services to third sector organisations to purchasing missiles from private defence contractors, a large amount of public sector activity involves the commissioning and purchasing of goods and services. Doing so effectively requires a clear understanding of what will most appropriately address the needs or wishes of the service user, making use of market research, good planning, financial and performance management, sharing best practice and learning lessons.

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Guidance on this topic

A selection of our publications providing help and advice on this topic:

A review of collaborative procurement across the public sector

May 2010

Given the size of public sector procurement spend and the potential to significantly improve value for money, public bodies should work together much more effectively than they currently do and there should be a clear framework to coordinate public sector procurement activity. This review has been jointly produced by the National Audit Office and the Audit Commission.

A review of collaborative procurement across the public sector

Successful Commissioning: How to secure value for money through better financial relationships with third sector organisations

March 2010

The Successful Commissioning guide is useful for all commissioners, procurement officers and managers, and grants officers who work in local authorities and local health organisations, including in primary care trusts. Third sector organisations will find the tool useful in thinking about their involvement in delivering public services.

The guide clearly sets out the main issues for effective financial relationships with third sector organisations; makes use of existing guidance in an accessible and practical way, and; dispels some of the ‘myths’ that exist around commissioning with the third sector.

Successful Commissioning guide

Financial relationships with third sector organisations: A Decision Support Tool

2009

The Decision Support Tool for public bodies in England provides practical support to officials who are involved in making, or advising on, 'real-life' decisions about the design of appropriate funding relationships with third sector organisations.  It takes into account such issues as programme objectives, funding channels, duration of award, full cost recovery, EU state aid considerations and much more. 

Better Funding: Financial relationships with third sector organisations (A decision support tool for public bodies in England) 

Intelligent Monitoring: New guidance to help cut red tape for charitable, voluntary and community organisations

2009

The Government gives £12 billion to charities and other voluntary and community organisations every year. Our Intelligent Monitoring guidance will help focus time and money on key services.

Intelligent Monitoring

Contract management framework

December 2008

The framework is a good practice guide for managing a broad range of contracts. It is particularly relevant for contracts where services are delivered over a long period of time (five years plus) where customers need to ensure that service levels and value for money are maintained over the duration of the contract.

The framework comprises:

  • Section 1 which outlines the activities that organisations should consider when planning and delivering contract management;
  • Section 2 which discusses how to evaluate the risk and value opportunities inherent in contracts; and
  • Section 3 which illustrates how the activities from Section 1 and the evaluation from Section 2 can be brought together to develop contract management plans and priorities.

The Guide (PDF - 204KB) was published in December 2008 alongside our value for money report on Central government’s management of service contracts. It was used to evaluate the management of eight major central government service contracts. It was jointly published by the NAO and the OGC and forms a key part of the OGC’s contract management guidance.

NAO Report (HC 65 2008-2009): Central government's management of service contracts: Good practice contract management framework (PDF - 210KB)

Consultancy Assessment Toolkit

2007

The Consultancy Toolkit provides a framework for reviewing the extent to which an organisation is achieving value for money from its use of consultants. It is aimed at procurement or commercial teams, customers/buyers of consultants, or audit staff. It can be applied to the use of consultants department-wide, or at a project-level. It is designed to diagnose areas of weakness and raise awareness of where improvements can be made.

Accessibility note:

The Consultancy Assessment Toolkit uses the Javascript scripting language to provide its interactive features and cookies to keep track of your answers. If you are using a browser that doesn't support Javascript and cookies or has them turned off it will not operate correctly.

We have produced an alternative to the interactive pages in the form of a PDF format printable document.

Getting value for money from procurement - how auditors can help

April 2001

A set of six questions for departments to consider to promote value for money in their expenditure on professional services, taken from from pages 15-16 of the NAO Value for Money report, "Purchasing Professional Services" (HC 400 2000-2001) published in April 2001:

Getting value for money from procurement - how auditors can help (PDF - 1MB)