Government must 'demand' supplier innovation

12 July 2009

13 July 2009 | Jake Kanter

The OGC is urging public sector buyers to use the government's £175 billion purchasing power to drive innovation.

The OGC's guide Driving innovation through public procurement, out this month, says supplier and buyer innovation could transform public services and secure better value for money.

It said government must become a "demanding customer" and challenge suppliers to produce new ideas. It urged departments to think about procurement strategically and engage with vendors at an early stage in a project's lifecycle, to secure market input.

It ties in with plans set out by the then Department for Innovation, Universities and Skills (now the Department for Business Innovation and Skills), which require every department to produce an innovation procurement plan, linked to its commercial strategy (Web news, 18 December 2008).

Output based agreements, the OGC said, enable suppliers to offer innovative proposals that respond to current and future public service needs.

After a contract has been awarded, buyers should work with suppliers outside the formal procurement process to form new ideas, it advised.

OGC chief executive, Nigel Smith (pictured) said: "Innovation is a key element in driving greater value for money from public sector procurement. By encouraging suppliers to develop novel techniques to help deliver public services we will continue to drive improvements in the performance of public services."

* The 24-page guide can be downloaded here: http://www.ogc.gov.uk/documents/OGC09-0679_InnovationBrochure.pdf

SMjul2009

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