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Procurement and Outsourcing Journal: September/October 2012

Katherine Souterconsiders the efficacy of pre-procurement market testing

Can a contracting authority carry out pre-procurement market testing? Yes it can – as long as the market testing is carried out in a way that treats all participants equally, does not discriminate and makes sure that the same information is given to all potential suppliers. The Cabinet Office positively encourages it. If this is so, why have contracting authorities in the past been reluctant to do it? In fact, things are getting better as more contracting authorities embrace pre-procurement market testing. Perhaps the government can be credited with this change, maybe alongside the publication at the end of last year of the proposed new public procurement Directive?

Eversheds

Paul Pughlooks at the future of Social Impact Bonds

There remains a buzz about Social Impact Bonds (SIB), especially in political circles, but almost two years on from the pilot project (Peterborough prison) they remain outside the mainstream. Despite this, public sector transformation continues apace and SIBs could yet have an important role to play. Before considering the possibilities, it is helpful to understand why an initiative born during the previous Labour administration has found such favour within the current coalition government.

Quigg Golden

Jonathan Parker discusses the use of shared services

Shared services are similar to a collaboration that might take place between different organisations such as a Hospital Trust or a Police Force, for example adjacent public bodies might decide to collaborate by merging their HR or IT functions and facilities.

Jo Ludlam and Yindi Gesinde highlight the merits of framework agreements

In the recent Department of Health (DoH) publication, NHS Procurement: Raising our Game, the DoH noted, ‘there is a dependence on framework agreements, which tend not to address variation and commitment for suppliers’, furthermore, that suppliers in the industry want, ‘committed volume contracts rather than framework agreements’. Nevertheless, it suggested that in order to improve NHS procurement, one of its action points would be ‘to create an expectation that national framework agreements are the best and trusts are obliged to use them or explain to their Boards, commissioners and local populations why they intend to use alternative arrangements’. Clearly, despite the dissatisfaction with framework agreements expressed by those suppliers who are involved in procurements with the NHS, it appears that they will have difficulty convincing trusts (and perhaps a wider audience) that frameworks are not the way to go.

Bristows

Hazel Grant reviews the impact of the Unison case

Challenges under the Public Contract Regulations 2006 (the Regulations) are reserved to economic operators, ie potential bidders for the opportunity that is the subject of the procurement. In Unison, R (on the application of) v NHS Shared Business Services Ltd [2012], the court looked at the standing of a third party, in this case a trade union, to challenge a public procurement process.

Clare Arthurs and Sebastian Kokelaar assess the implications of a recent decision in the Supreme Court

In Rainy Sky SA v Kookmin Bank [2011] the Supreme Court revisited the principles governing the construction of contracts. It held that, when being asked to interpret ambiguous provisions, the courts can consider their commercial purpose. Is this liberal rather than literal construction a triumph for commerciality, or a charter for greater uncertainty?

Jack Hayward

Jack Hayward continues his round up of the high (and low) lights in the procurement arena

I was having a drink one evening a couple of weeks ago with a friend of mine who is a quality engineer for an automotive parts supplier. The company he works for is part of a large multinational and supplies sophisticated components to prestige car manufacturers. One of these components had been identified as the cause of a number of car breakdowns and the manufacturers were looking to my friend’s employer for recompense and an explanation. After exhaustive testing, the fault was identified in wire supplied by a German company which comprised a part of the component.

Paul Young examines the implications of the Green Deal

As 2013 approaches we will begin to see an increased focus on a low-carbon economy, with the introduction of the government’s Green Deal potentially changing fit-out requirements within private and commercially let property, and increased focus on low-carbon cities seeing a public sector led, city-wide, carbon reduction programme and a potential move towards decentralised energy across the UK.