13 February 2009 | Paul Snell
The Department for Work and Pensions is to work more closely with its suppliers as it adapts its commercial strategy to tackle the economic downturn.
"There's a necessary increase on value for money across the public sector and we want to deal with that. Part of our strategy is to work with our own supply base," commercial director David Smith told SM.
"We see that as a key area for delivery, particularly in an economic climate that has changed over that past year and may continue to change."
As central government's biggest spending department, the DWP has recently revised its commercial strategy, now in its fifth version, to tackle the new economic conditions and implement changes recommended in the OGC's capability review.
Board representatives from each of the DWP's top 10 suppliers meet with the commercial team each month to discuss procurement strategy and other issues.
"It would seem remiss if we weren't addressing the economic climate because suppliers are having difficulties in some areas and advantages in others and we want to be up to date with that," said Smith.
He added it is not a case of looking over vendors' shoulders, but working together to mitigate risk because the DWP does not want a "stressed" supply chain.
The commercial team is also moving to 10-day payment terms with all vendors and hopes this will encourage larger contractors to follow suite. Currently it pays 64 per cent in 10 days.Smith said the revision has benefited from input from permanent secretary Sir Leigh Lewis and the executive team.