Matt James
Director of Commercial Advice, Crown Commercial Service

2 Commercial Reform
Circa £187bn spend p.a. on goods and services across the public sector
Circa £40bn spend p.a. on goods and services in Central
Government
Better commercial practices saved the Government £3.8bn in
2012/13

3 Commercial Reform
Retained departmental commercial activities
Common but complex transactions – joint working with depts
Transfer of additional commercial activities
CG & WPS
Spend &
Procurements currently transacted
Strengthening functional leadership and improving commercial capability
Extending our involvement in complex commercial activities e.g IT/BPO
Transferring operations - 4 trailblazer depts circa £5bn of spend
Developing managed services and building world class commercial capability

4 Commercial Reform
Indirect
Advisory
Direct
Buying
Building the
Commercial
Profession

£
Managed Commercial Services delivered centrally - once on behalf of Government
Procurement
Process
Contract and supplier management
High
Time spent on value added activity
Before going to market
Developing requirements that shape markets and the supply base to
Government
Low
Simplifying process and reducing turnaround times & supplier bid costs
Improving contract and supplier management capability through application of new standards
Before
Goal

• Excellent fully managed commercial services in central government and increasingly becoming the service provider of choice in the wider public sector
• Clear and compelling savings for all our customers leveraged through demand aggregation and innovative deals with suppliers both large and small
• Managing and influencing significantly higher levels of spend on common goods and services across the public sector
• Expert commercial advice provided by highly capable people informed by deep market knowledge and experience
– on an increasing number of key government projects
6 Commercial Reform

Vision
Responsive
We have a ‘customer centric’ culture
Enthusiasm Governance
We understand our customers
Reliable
Relationships
We exceed expectations
We deliver an exceptional experience
ENGAGEMENT, MANAGEMENT AND LEADERSHIP
We must create a culture which drives and encourages excellent customer service
7 Commercial Reform

• Greater opportunities will arise through better pipelines to aggregate customer demand and requirements when going to market.
• Aggregating demand does not mean aggregating supply
• Price benchmarking is currently being rolled out across category teams to test and challenge the deals we have in place.
• Key to driving continuous improvement and increased savings as well as growing the business - particularly in the wider public sector.
8 Commercial Reform

Technology
Category Management Pillars
People
Corporate
Services
Buildings
Functional delivery
Commercial Contract
Management
Supplier Performance
Management
Contract delivery, optimisation and management
Performance analysis, tracking spend and savings
Supplier Innovation Cross-category innovation in supply chain management
Sourcing & Operations Best in class e-platforms, clear and efficient processes
Corporate structures aligned towards delivering an outstanding customer service
9 Commercial reform

Digital Services
Framework
• Managed service provides access to a pool of 175 agile digital services suppliers (84% are SMEs and 38% are new suppliers to government).
G- Cloud
Energy
Facilities
Management
• £2bn worth of energy procured and delivered across the public sector in 2012/13 with savings to the public purse in excess of
£109m. investing in innovative contracting models for long term energy requirements.
• New contracting model being procured. Estimated savings over current model in the region of 10% to 15% (up to £350M) over the life of the vehicle (4 years).
• 4 th Generation contracting vehicle in place providing access to 1000 suppliers (84% are SMES). £64m of spend transacted through G-Cloud since inception in April
2012 via circa 4000 procurements.
• 63% of business by value has been won by
SMEs.
10 Commercial Reform

• Online system collating vehicle technical data including for Cars & LCVs
• Allows customer access for vehicle purchase and leave quotations to determine best value solution and support Direct Award
• Direct link to Vehicle Lease suppliers for live financing quotes

• RM859 : Vehicle Purchase – extended until October 2014
(new procurement underway)
• RM858 : Vehicle Lease – expires May 2015 (new procurement underway)
• RM955: Supply and Fit of Tyres – live from August 2012 for up to 4 years
•
• RM956 : Vehicle Conversion & Reconditioning Services – live from September 2013 for up to 4 years
12 4 Crown Commercial Service – Fleet Team

1. Cost Reduction - Targeting saving of £1bn through supplier engagement in 2013/14
2. Performance Management - Create a more rigorous and effective process for performance management of all strategic suppliers
3. Deep Dive Commercial Capabilities -
Disaggregation of contracts & Long run innovation ideas
Circa 50% of the £40bn of central government spend is with circa 50 suppliers
13 Commercial Reform

To embrace competition
To be innovative through proposals for how we can improve services
To deliver savings for taxpayers
To provide opportunities to
SMEs in the supply chain
To deliver what we are asking for as an intelligent client
To deal effectively with CCS as one customer - the
Crown
To make a reasonable but not excessive profit
To demonstrate high levels of corporate responsibility
To be transparent through open book accounting
14 Commercial Reform

Implementing a wide range of measures to level the playing field for small companies, charities and voluntary organisations to be in the best possible position to compete for government contracts.
SME CROWN REP - Stephen Allott
–
‘voice of SMEs’
OPPORTUNITY Developing ways to make it easier to find opportunities to do business with Government – Contracts
Finder is being refreshed to make this process even better
REFORM Negotiating simpler, more flexible EU public procurement rules
Supporting the commercial community to implement and comply with the legal and policy framework
COMMITMENT All departments have developed action plans and targets to increase their spend with SMEs and deliver their contribution to the 25% aspiration
COMMUNICATION - SMEs given new channels of communication including Mystery
Shopper, SME Panel, Crown Rep
15 Commercial Reform

Greater
Freedoms
Allowing negotiation with suppliers relaxation of the rules on the competitive negotiated procedure
Simplification & reduced red tape
Assessing suppliers credentials greater use of self-declarations
New, improved or clearer rules
Electronic
Marketplaces &
Dynamic
Purchasing
System
Poor performing suppliers – ability to exclude
Greater
Flexibilities
Public Service
Mutuals &
Social
Enterprises – contracts reserved before exposure to competition
New EU
Commitment
Review the effects of the EU thresholds
Reduced times for suppliers to respond to adverts/tenders
Skills & experience of individuals
(consultants, lawyers & architects etc) to be taken into account
Social and environmental aspects
• Together - significantly changing the face of public procurement
• Implementation by the end of 2014
16 Commercial Reform

Report
Growing
Your
Business’
- May
2013
Impact
Whole of public sector
Abolishing PQQs for low value contracts and a standardised PQQ for high value contracts
Mandating that 30 day payment terms are passed down the supply chain
Mandating that all public sector contracts are readily accessible online
Reporting on all new spend with SMEs/VCSEs
These were accepted by government and new legislation is being introduced this year .
17 Commercial Reform

Civil Service Capabilities Plan - Priority Skills Area
Attracting Expertise
Commercial recruitment hub
Developing commercial
Fast Stream scheme
Fast Track apprenticeship programme
18 Commercial Reform
Developing Expertise
Developing a culture of confidence and judgment
Interchange with industry
Skills assessment tool and further L&D opportunities
Retaining Expertise
Active career path management
Designing a commercial talent programme
Non-monetary rewards

“A must attend ’ programme for all commissioning leaders.”
Francis Maude Minister for the Cabinet Office
• Development programme for people responsible for delivering transformation of public services
• Combination of input from experts and practical, peer-led learning
• Focus on commissioning for outcomes and across organisational boundaries
• Gives knowledge, networks and confidence to do things differently emphasis on ‘hearts and minds’ rather than process and rules training
• Terrific feedback from participants – supporting them in delivering real change
Next wave begins in September 2014; get in touch if you are interested servicedesk@cabinet-office.gsi.gov.uk
19 Commercial Reform

20 Commercial Reform