Editor's comment: A revolution in the public sector

Public sector procurement is changing rapidly and dramatically. Just ask any contractor used to working directly for a local authority that has missed out on a framework agreement.

There are growing levels of angst in the industry about the changes. Since frameworks by their nature reduce the number of companies councils deal with, there will be more companies that feel aggrieved by the changes than view them positively. And it can be hard to see how local companies can compete with some of the national contractors that seem to be vacuuming up this sort of work because they have the experience and the financial wherewithall to cope.

But there does seem to be a growing realisation that local firms and SMEs must not be driven out of business. So while some of the frameworks may exclude many of a local authority’s previous contractors, the promise seems to be that next time round, things may be different. The snag? Four years is a long time to wait for a framework to come round again.

Winning public work in the meantime could mean changing your approach – perhaps even reverting to being a subcontractor. Things that can seem rather like a tick-box exercise need to be addressed – policies on diversity, employment, sourcing, sustainability, and so on.

But there are opportunities – and with local authorities and central government facing a financial squeeze, being able to identify cost savings is key. As delegates found out at last week’s Contract Journal conference on public sector procurement, contractors taking the lead and telling public sector clients where savings can be made will be a key issue. It’s one area where the industry has the knowledge and capability – and needs to use it. While policies and procedures might be key to winning public work, delivering savings will become a key driver, and will increasingly be the path to success.

[Contract Journal, 25 October 2006, p 56]