Reports by the Committee of Public Accounts over the last 10 years have regularly emphasised the considerable potential to secure better value for money by departments and the wider public sector being much more commercially astute. [PAC 17th Report 05-06, para 26]. The Committee identified the following factors which should be addressed or for which greater progress is needed.
Please click one of the factors below to go to a list of
questions for organisations to use to review their progress against each
factor.
| Factors which need to be addressed or where greater progress is needed | Signs of success* |
|---|---|
| 1. Taking greater advantage of departments’ buying power to secure better deals. | Successful
exploitation of buying power shows up mainly in lower prices
paid: which manifests itself in price reductions achieved; and
in prices paid being lower than those paid by other
organisations. Price reductions may be attributable to:
re-tendering of contracts; post-tender clarifications; use of
framework or other collaborative arrangements. |
| 2. Increased use of professional procurement expertise in framing contract strategies. | An in-house procurement expert monitors the organisation’s procurement performance and reports to the Executive Board member responsible for procurement. |
| 3. More awarding of contracts on achieving longer term sustainable VFM than simply lowest price. | The criteria for
contract award targets long term sustainable VFM rather than
simply lowest price and a high level review of contracts awarded
indicate many are not awarded to the lowest tender. When Departments accept the lowest price tender, there is a risk that the contractor seeks to recoup his profit margin through variations and claims for additional work. While some variations may be inevitable – low levels of cost growth can indicate this issue has been addressed. |
| 4. Greater use of incentives and partnership working with suppliers where appropriate. | The NAO Efficiency Toolkit Overview Assessment Framework’s questions on ‘Delivery Partner Management’ ask about relationships with partners, incentivisation, etc. Departments can assess their level of performance in delivery partner management using the ‘Maturity Model’ in the Toolkit. |
* The “Signs of Success” are intended to help senior management to quickly determine whether the factor identified by the Committee has been addressed in their organisation.
