'Unworkable' contracts put pressure on purchasers

1 March 2005

01 March 2005 | David Arminas

The government's approach to supplier contracts is "unworkable" and places purchasers in an impossible position, according to a former senior Whitehall buyer.

Ian Beverley, who was head of the regional development agencies' strategic procurement group, said the contradictory advice puts the profession "between a rock and hard place".

In his view, the order to use more local suppliers is in conflict with the goverment's desire to see larger contracts.

Beverley, now director at Northern Procurement Group, which manages procurement for North Yorkshire County Council, said: "On the one hand, the government says collaborate with other authorities to buy big, aggregate contracts and drive down prices."

But on the other hand, he said, it also urges purchasers to sign up to an "SME-friendly procurement concordat" to show their contracts are open to small firms.

"Local authorities have a moral obligation, not a legal responsibility, to support their communities by using local suppliers and that may mean not always making those big savings.

"So we have a conflict, a contradiction, it is unworkable. I wish the government would explain how we are going get out of this."

A spokeswoman for the The Office of the Deputy Prime Minister (ODPM) told SM: "It is not a contradiction but is about getting the balance right between large contracts and using small firms, which is what strategic procurement is all about."

Beverley points out to advice from the ODPM's Strategic Partnering Task Force that urges buyers to use more small firms which, he said, by their nature have limited resources.

But he said Gershon's efficiency review wants more local authorities to group together and make larger contracts to help make the savings demanded by the government. Both, he added, cannot happen.

Beverley's comments come after the Federation of Small Businesses branded government procurement as "inherently anticompetitive" and called for it to be investigated by the Office of Fair Trading.

Andy Willox, managing director of Goldstar office cleaning, a firm in Aberdeen, Scotland, which employs 80 people, said: "I know we do business globally now. But best value for an authority might not be the cheapest.

"It would be great if authority contracts were made into more bite-size chunks that small firms could be able to compete for."


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