Procurement Act: Reflections from Rikesh Shah

Rikesh Shah, newly appointed Chair of IPEC’s Advisory Committee, reflects on the work underway to embed innovation in the procurement process, and how IPEC is developing a suite of tools to instil confidence in organisations as they get to grips with the new Procurement Act.

Procurement can be a key driver of innovation, and at IPEC, we are developing the tools to harness this innovation. To do this, we need to understand what procurement is. It’s not just a process. Procurement is an enabler that gives suppliers the opportunity to work together more efficiently. It gives organisations the ability to deliver outcomes needed in their organisation.

The launch of the Procurement Act earlier this year gives us an opportunity to rethink how we approach procurement and adopt a more entrepreneurial approach to our work.  One aspect of this is strategic market engagement, which is essentially an organisation selling itself as a client to the supply market.

Good procurement, particularly in an innovation space, is collaborative. But how can procurement professionals collaborate more effectively with their colleagues and suppliers to achieve those better outcomes, while also minimising organisational risk throughout the procurement journey? Fundamentally, this is achieved with transparency and openness.

There is a massive opportunity, both at a local and national level, to use procurement as a strategic lever. And that’s why we created the Procurement Dojo. This is a tool that was created as a safe and confidential space for local authorities to openly discuss and learn from procurement experiences. This will allow us to nurture and increase the volume of procurement of innovation in public sector.

The Dojo supports this approach, while helping implement change across the public sector.  It develops procurement skills and increases confidence by recognising that procuring innovation is a nuanced, bespoke process based on a buyer’s needs.

When we have conducted a successful innovation procurement, this is shared more widely within the local authority or wider local authorities and government to show the art of the possible and further instil confidence in the procurement process.

The most common barriers to procuring innovation that are not related to the procurement team’s skills and confidence in buying more innovative products and services are cultural and governance barriers.  For example, not allowing sufficient lead time to learn from pre-market engagement; not appreciating how an organisation can remain fully compliant whilst engaging in informal and ‘without prejudice’ dialogue with suppliers; legal teams that require overly prescriptive, risk avoidant, or onerous contractual terms that are not aligned with delivering innovation and a partnership approach.

This is why we developed our Preliminary Market Engagement (PME) Guide. The guide ensures that PME is not merely a tick-box exercise, but gives a chance to assess the state of the market and the alternatives available. Public bodies often go out to the procurement market asking for something that doesn't exist or use terms and conditions that don't work in the market. This means they aren’t getting value for money and aren’t fully understanding the nature of the procurement they need.

Given the increasingly uncertain world we are living in, where there are questions about the security and reliability of suppliers from not-so-friendly states, the PME also includes market research to develop an understanding of who is interested in the procurement opportunity and who the global ultimate parent of the company may be. For sensitive procurements that underpin National Security, consultation with security teams is imperative. The new Act also has a Procurement Review Unit which is intended to monitor compliance with the Act.

Open and dynamic marketplaces offer a catalogue of the most agile, innovative, and latest offerings.  Traditional frameworks offer more carefully vetted suppliers with substantial and proven capability; however, they don’t necessarily offer the most innovative or cost-effective solutions.

At IPEC, we’ve also developed the Procurement Innovation Playbook to help public bodies with market engagement while minimising risk during the procurement process and giving public bodies the tools and confidence to champion innovation in procurement.

IPEC has built a network of more than 3,000 pioneers and practitioners who share learning and experiences, upskill service managers and decision makers from 50 local and combined authorities across the UK through direct engagements and many more through webinars, podcasts, publications and events. Changing ingrained organisational practices takes time. At IPEC, we continue to invest in providing practical upskilling opportunities for everyone involved in procurement, to help encourage this change and make procurement truly innovative.