1. The role & function of the Office of Government Commerce (OGC) in developing the UK public procurement system, the role of OGC’s Procurement Policy Unit & UK approaches to implementation and to framework agreements
Peter Bennett
Valletta: 25 January 2006

2. Office of Government Commerce
Created in April 2000
OGC helped to realise £1.6 billion value for money gains in 3 years up to 2003
Target saving by 2007/08 is £3 billion in central government
OGCbs (Buying Solutions) – commercial arm of OGC

3. Sources of vfm improvements
Greater focus on quality & whole life costs
Reducing process and transaction costs
Co-ordinating departmental & Government purchasing power
Wider involvement of professional procurement staff
Gateway reviews – improvement in cost & schedule performance of major projects

4. Developing role
OGC’s core area of operations was initially central civil government
Increasingly working across the wider public sector and local authorities
Efficiency Programme

5. PROCUREMENT POLICY UNIT (OGC)
APPLICATION of EC RULES
Advice on what the rules say ….
….and what they mean.
Handling UK infraction cases
EU AND INTERNATIONAL DEVELOPMENTS
DOMESTIC VFM POLICY
EUROPEAN PUBLIC PROCUREMENT NETWORK
Representing the UK:-
- negotiating new Directives
influencing the development of Commission policy, and EU line in WTO
“margins” work influencing other WTO members
representing UK on EU learning lab
PPN = cross border,
pre-contract problem solving network with a best practice dimension
Ensuring value for money (vfm) policy is understood and applied
Working with OGDs to ensure that pursuit of other objectives through pp does not undermine vfm eg fairtrade, race relations, sustainable development
Developing policy eg on remedies

6. UK Domestic Policy
Requires all purchases of goods and services to be based on value for money, having due regard to propriety and regularity
(Value for money = "the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer's requirement“)

7. Policy and Law Directives and Treaty complement UK policy
No UK law before implementation of Single Market Programme, early 1990s
Unil end January 2006, 4 basic Regulations, each of which show how remedies can be sought
References on OGC web site ( and link to text of regulations
2 new Regulations implementing 2004/17 and 2004/18 will replace the existing regulations

8. UK implementation
- UK implementing regulations will come into effect on 31 January 2006
2 rounds of consultation in 2004 & 2005
Respondees to first consultation wanted provision for optional issues eg frameworks in the UK Regulations
- second round of consultation on draft Regulations in summer 2005

9. Second round of consultation
79 responses received from a variety of organisations
Draft Regulations welcomed, as was OGC’s approach to detailed implementation & providing clarification in guidance
Separate decision on including Alcatel provisions in the new Regulations
OGC response to consultation sets out areas for guidance

10. Second round of consultation (2)
areas for guidance include:
- reserved contracts (Article 19)
- framework agreements
` - central purchasing bodies
- electronic auctions
- dynamic purchasing systems
- competitive dialogue
- mandatory exclusions (Article 45)

11. Frameworks and implementation
Guidance published May 2004
Frameworks covered in first consultation note
Responses indicated that the guidance was good and article 32 helpful
Guidance updated
Training module covers frameworks
Issues on frameworks: use of mini-competitions & clarity that they are not approved lists or qualification systems

12. Notable OGCbs frameworks
Gcat
- IT products
- £87m saving 2003/04
S-Cat
- Consultancy & other specialist services eg management consultancy; financial services; HR services; IT consultancy and services; and business information & research
- £39m saving 2003/04
Use of OGCbs frameworks is voluntary

13. Conclusions on frameworks
Can save transaction costs
Can provide vfm savings
Will be helpful for suppliers
As long as properly and fairly operated