Government issues procurement policy note in bid to boost supply chain visibility

The Crown Commercial Service (CCS) has issued a procurement policy note setting out new measures intended to increase the visibility of subcontracting opportunities in Government supply chains.

The CCS said the measures, which include a reporting template, would also provide greater visibility of supply chain spend.

The PPN, which can be viewed here, applies to all central government departments, their executive agencies and non departmental public bodies.

For all new procurements valued above £5m per annum commencing from 1 May 2018 which are subject to the Public Contracts Regulations 2015, all in-scope organisations must update their terms and conditions to include clauses requiring the successful prime supplier(s) to:

a. advertise on Contracts Finder, subcontract opportunities arising from that contract above a minimum subcontract threshold of £25,000; and

b. separately, report on how much they spend on subcontracting, and separately how much they spend directly with SME or VCSE organisations in the delivery of the original contract.

In relation to the first requirement, “the clause does not apply to subcontracts that were arranged or existed prior to the award of the contract, i.e. when a prime contractor has established its supply-chain as part of the tender process,” the PPN said.

The relevance and proportionality of the contractual conditions addressed in the PPN should be considered at all appropriate stages, the CCS added.

However, the note said contract conditions must be relevant and proportionate to the contract subject-matter. “The Government expects that in the majority of contracts valued above £5m p.a., this condition is likely to be relevant and proportionate,” it said, although it added that there may be exceptions.

In-scope organisations will be able to set a higher threshold if they consider the £25,000 threshold to be overly burdensome to suppliers on a particular procurement.

The relevance and proportionality of the contractual conditions addressed in the PPN should be considered at all appropriate stages, the CCS said.

Suppliers will be expected to have a reasonable and proportionate amount of time in which to respond.

The Contracts Finder platform has been developed with new functionality that enables suppliers to Government to advertise subcontracting opportunities.

The PPN also outlines expectations in relation to the collection of data on direct spend with SMEs/VCSEs and the provision of reports to contracting authorities.