A new approach to supplier relations in government

1 December 2010

A new approach to supplier relations in Government has begun as Cabinet Office Minister Francis Maude hosts the first in a series of supplier summits with CEOs and senior representatives of 31 of the Government’s key suppliers.

Mr Maude set out the terms of a new partnership between the Government and its suppliers and described the reforms Government is putting in place to make it easier to do business with the state.

He also outlined what is expected of suppliers, particularly in their relations with SMEs.

The summit built on the contract renegotiations programme which started earlier in the year with the Government’s largest 19 suppliers, followed by the Government’s wider supplier base, which is expected to deliver £800 million in savings in this financial year alone.

Addressing suppliers at the summit, Mr Maude said:

You will all have experienced procurements that seemed to go on forever, cost millions of pounds and took countless hours of your employees’ time and energy. I know how frustrating this can be and I can promise you here today that we will do things differently.

Talking about the new relationship he added:

But there will also be things we expect from you. Government will no longer offer the easy margins of the past. We will open up the market to smaller suppliers and mutuals and we will expect you to partner with them as equals, not as sub-ordinates. The days of the mega IT contracts are over, we will need you to rethink the way you approach projects, making them smaller, off the shelf and open source where possible. We will expect you to be transparent in all your dealings with us and for the terms of the contracts we sign with you to be published online.

During the summit, suppliers were asked to identify what aspects of the procurement process the Government should target to make the purchase of services much quicker, cheaper and better. They were also asked to identify what central government needs to do to ensure that it is an effective 'single customer' for services and to discuss how suppliers can be involved in supporting the Government initiatives in respect of SMEs, Mutuals and Joint Ventures.

As part of the Government's commitment to make it easier to do business with the state, a new online feedback facility is being launched today to enable SMEs to share their experiences of public procurement.  It asks suppliers, in plain and simple terms, how to rip up the red tape and bring more common sense into securing government contracts.

Read speech: Cabinet Office Minister's speech to supplier summit

Notes to editors

1. the Government has committed to make immediate savings of £6.2 billion in this financial year.
2. the Efficiency and Reform Board, is chaired jointly by the Chief Secretary to the Treasury and the Minister for the Cabinet Office. For further details please see www.cabinetoffice.gov.uk
3. suppliers attending the supplier summit are:
   • Hewlett Packard
   • British Telecom
   • Capgemini
   • Fujitsu
   • IBM
   • Atos Origin
   • Logica
   • Steria
   • Siemens IS
   • Cable & Wireless
   • Accenture
   • Vodafone
   • G4S
   • Serco
   • Capita
   • Trillium
   • Xerox
   • Vertex
   • TCS
   • Northrop Grumman
   • Detica
   • Babcock International
   • Wipro
   • Cognizant
   • Infosys
   • HCL
   • XChanging
   • Teleperformance
   • EADS
   • Mitie
   • Thales
4. key programmes include:
   a. Working in partnership with Industry (Unipart’s Expert Practices team and Intellect) to tackle the issues present in the procurement process. The outcomes from the supplier summit will feed into this programme.
   b. The 6-week ‘Lean’ Study, commissioned to identify wasteful practices and unnecessary complexity in the procurement process, which is nearing completion and the outcomes will be implemented via Pathfinder Procurement Projects in quarter one 2011. Timescales, costs, and quality will be measured throughout these Pathfinders forming the baseline for future procurements.
   c. The Government will build on the success of the lead negotiator model used during contract renegotiations and establish a network Crown Commercial Representatives (CCR) to work with a central analytical team tasked with preparing for engagement with key suppliers. CCR's will be senior people drawn from central government departments and the private sector. They will work with suppliers to reduce the cost of providing services, while reconfiguring services to make them better and co-ordinate engagement with suppliers on key commercial and pan-departmental issues and opportunities.
   d. Offering suppliers the opportunity to work with government to increase the number and scope of services undertaken outside of the traditional public sector model by embracing the new commercial models, such as mutuals and joint ventures, which will sit alongside traditional outsourcing, as viable options for moving the delivery of services out of the public sector.
   e. Identifying opportunities for partnerships and telling the Government about them, Government and suppliers together can support fledgling mutuals, providing experience and advice and forming joint ventures where possible.