1 June 2010 | Lindsay Clark
The UK coalition government has created an “aggregation layer” in central government procurement that will gather buying data, negotiate better deals on higher volumes and mandate buying through these agreements.
According to procurement professionals close to Whitehall, the new approach is likely to be applied first to “office solutions”. If successful, this method – mandating procurement through joint deals – could be rolled out across the whole public sector.
Once the buying data is collected, deals will be negotiated either by the Office of Government Commerce (OGC) or by a private sector third party, a source said. Unlike Buying Solutions - the OGC's commercial arm - which currently negotiates framework agreements for joint buying across government departments, those involved in running the aggregation layer – who are expected to include commercial directors from some central government departments – will have the power to force others to buy from the deals they make with suppliers. Lack of mandatory powers has been said to be one of the shortcomings of the OGC’s deals because they cannot guarantee volume to suppliers.
A spokesman for the Cabinet Office confirmed the existence of the aggregation layer.
“It’s early days, but the group is needed to drive forward [joint procurement] across Whitehall. The OGC will continue and will have an important role in this,” he said.
The Cabinet Office is joint chair of the government's new Efficiency and Reform Group (ERG), set up to help the government cut spending to reduce the £156 billion public deficit. It said in a statement that the group would have “the power to make sure departments work together to tackle waste and improve accountability across a range of areas, including ICT spend, procurement, advertising and marketing spend, and Civil Service expenses and recruitment”.
The aggregation layer is understood to be the manifestation of the ERG’s activity with procurement.
Meanwhile, another purchasing and supply expert with extensive public sector experience questioned whether new high-volume deals could be struck within existing framework agreements without legal challenges from competing bidders. The alternative is the government would be forced to kick off a new procurement round, delaying savings, he said.