Treasury denies rift over prime contract - Treasury denies rift over prime contract

Exclusive by Kathy Watson



The Treasury has denied that the Government has bowed to industry pressure to downgrade the controversial new prime contract from Defence Estates but admitted it is launching alternative contract documents at next Monday's (22 May) Movement for Innovation conference.

It was widely believed that the target-cost incentive-fee prime contract launched in March was to be used for all government departments' prime contracting. However, a senior spokesman said this week it will launch an amended GC Works suite which could also fit the bill.

"The principle is that an integrated supply chain should be working as the golden thread in a contract," said Mike Burt, head of procurement, practice and development at the Office of Government Commerce. "The GC Works suite will be enhanced along the lines of Achieving Excellence to include risk and value management and whole life costing and it is absolutely fine to use because it is all about supply chains and working in an integrated way."

The news comes as NHS Estates announced it is likely to adopt GC Works suite of contracts for its framework schemes which will introduce supply chain management on a regional basis.

A spokesman for NHS Estates said: "There is a view among some in this organisation that what we are doing is not prime contracting. Different government sectors have different characteristics and our 500 trusts acting as lead clients make us a bit different to the more centralised departments.

"We want the spirit of partnering but we do not want to fundamentally change the contractual relationship - we are trying to make this a collaborative effort," he said. But he admitted that a meeting is due to take place with Defence Estates shortly to discuss its prime contract. (see page 3.)

At next Monday's M4I conference, the Treasury will reiterate that government departments will be expected to use three primary procurement routes. In order of preference, these are: private finance initiative; prime contracting; and design and build. There is a fallback to use traditional contracting where the other three prove to be unworkable.