CCS customer updates: June 2018

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The latest issue (published 9th July 2018) is available here.

This month there is news on:

  • New public sector travel and venue solutions agreements open for business
  • Speakers announced and speakers confirmed for digitech18 on 31st October, Leeds First Direct Arena
  • User testing opportunities – CCS are looking for assistance
  • Use behavioural insights to help improve your services
  • G-Cloud 10 is open for business
  • Aggregation opportunities: water and wastewater services, fuels, mobile voice and data
  • Technology webinars: Network Services, Mobile Voice & Data Aggregation, Technology Services 2, Crown Hosting Services
  • Estates Professional Services and PMFDTS Webinars
  • Learning and Development webinar
  • Spend Analysis and Recovery Services webinar
  • Intro to Energy Trading & Risk webinar
  • Upcoming events: Civil Service Live (17th and 18th July), Digitech18
  • New framework: G-Cloud 10 (RM1557.10)
  • Recently expired frameworks: Fuel Cards and Associated services (RM6000), Contingent LabourONE (RM960)
  • Framework extensions: Workforce Management (RM1072)

Procurement Policy Notes (PPNs)

All Procurement Policy Notes (PPN’s) are published on the CCS website here.

  • No PPNs have been published since the last edition

Small Business Policy Team Changes

The CCS Board has agreed changes to the CCS Policy and Public Sector Directorate.

The Small Business Policy Team, EU/International Policy and Domestic Policy will move from CCS to the Cabinet Office. They will join the central commercial teams under Gareth Rhys Williams, the Government Chief Commercial Officer on 1st August 2018.

This move is a result of a desire to put the policy agenda at the heart of the Commercial Function, as government develops its commercial expertise.

The team will continue to work with CCS on the policy agenda to ensure continuity of effective commercial policy delivery, particularly with regards to SMEs.

Procurement reforms: social value, outsourcing and supplier failure Following the collapse of Carillion, the Chancellor of the Duchy of Lancaster has set out new ways in which public services will be contracted and delivered. The aim is to strengthen, diversify, challenge and protect the outsourcing market.

Central government will be required to ensure that social value is evaluated in all major projects. This is a move away from the requirement to just consider social value.

Central government departments will also be mandated to report on the social impacts of new procurements. To support these changes, all government commercial buyers will be trained in how to take account of social value.

Following the recent focus on outsourcing contracts, there is going to be an increased focus on getting outsourcing right during the initial planning stages. Suppliers will be required to develop “living wills” enabling contingency planning to be rapidly put in place whilst maintaining service delivery.

Key Performance Indicators such as response rates, on-time delivery and customer feedback will be published to increase transparency.

A playbook of guidelines, rules and principles should lead to new entrants to the market and build mixed markets of suppliers. This will apply to Gold contractors.

All 30,000 contract managers across the Civil Service will receive training based on the Contract Management Professional Standards. This will lead to accreditation at Foundation Practitioner and Expert level.

See the Chancellor of the Duchy of Lancaster’s speech to reform here.

Grant Standards

The Cabinet office has released updated documents relating to the Grant Standards. A HTML version is also available. The information incorporates guidance to support grant makers in Departments and Arm’s Length Bodies comply with the Government Functional Standard for General Grants.

The guidance published in December 2016 will undergo a further review in 2019.

There are 10 minimum requirements for the Functional Standard:

DHSC annual report and accounts 2017 to 2018

On the 12th July, DHSC published its annual report and accounts

Procurement is a discussed in the document as a driver of efficiency across the department and the NHS. The Procurement Transformation Programme is discussed on pages 30 and 31.

Sustainable procurement activities are included in the report on page 41. The Department continues to promote sustainable procurement activities through consideration of the Social Value Act and the SME Agenda.

The Department has identified how policies in the Single Departmental Plan support the Sustainable Development Goals (SDGs). Procurement activities will help contribute to achieving compliance with the SDGs.

National Procurement Strategy for Local Government in England 2018

The Local Government Association released the National Procurement Strategy for Local Government in England in 2018 on 4th July.

This strategy comes after a review in Spring 2017 of progress against the 2014 national procurement strategy. The results of this review are available in “National Procurement Strategy 2014: The story so far”.

3 themes reflect local government’s priorities for the next four years: Showing leadership, behaving commercially and achieving community benefits. These have been broken down into 13 areas:

1. Showing leadership
2. Engaging councillors
3. Engaging senior managers
4. Working with partners
5. Engaging strategic suppliers
6. Behaving commercially
7. Creating commercial opportunities
8. Managing contracts and relationships

 

1. Managing strategic risk
2. Achieving community benefits
3. Obtaining social value
4. Engaging local SMEs and micro-business.
5. Enabling VCSE engagement

Four enablers will help the successful delivery of this strategy:

* Developing talent
* Exploiting digital technology

* Enabling innovation
* Embedding change

DHSC prompt payment statistics

The prompt payment statistics for the Department have been released for April to June 2018.

The data shows the percentage of suppliers paid within 5 days and 30 days of the Department receiving an invoice

New Secretary of State for the Department of Health and Social Care

Matt Hancock MP has been promoted to the Secretary of State and Social Care, taking over from Jeremy Hunt MP. Mr Hancock is the member of parliament for West Suffolk and was previously the Secretary of State for Digital, Culture, Media and Support.

The Secretary of State for the Department of Health and Social care is responsible for:

  • overall financial control and oversight of NHS delivery and performance
  • oversight of social care policy

Mr. Hancock released the following statement on Twitter following his appointment on Monday 9th July.

“Really looking forward to joining @DHSCgovuk at such an important time for our great NHS. I can’t wait to get started”.

See his article on his ambitions for the future of the NHS and the potential of technology to improve health care here.

 

Enforceability of contract variation clauses Provided by E Lemming, GLD

Summary

The Supreme Court has determined that a clause prescribing that a contract cannot be varied except in writing signed on behalf of the parties is legally effective. This type of clause is commonly referred to as a “no oral modification” clause (“NOM”). Whilst this is not a procurement case, the principles would also apply to a procurement contract – although any time a procurement contract is being amended additional consideration would of course also need to be given to Regulation 72 Public Contract Regulations 2015 (modification of contracts during their term).

Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24

Rock Advertising entered into a contract for a licence to occupy premises managed by MWB. The contract included a NOM clause which provided that “all variations to this licence must be agreed, set out in writing and signed on behalf of both parties before they take effect”.

Rock Advertising accumulated arrears of licence fees and proposed a revised schedule of payments to an employee of MWB over the phone. Rock Advertising understood that the parties had orally agreed to vary the contract. MWB’s employee viewed the revised schedule as a proposal to be discussed with their manager. The schedule was rejected by MWB and MWB locked Rock Advertising out of the premises for failure to pay the arrears. MWB sued for the arrears, and Rock Advertising counterclaimed damages for wrongful exclusion from the premises.

The Court determined that the law does give effect to clauses which require specific formalities to allow variation of a contract. The Court held that “party autonomy operates up to the point when the contract is made, but thereafter only to the extent that the contract allows.” Therefore, parties are able to bind their future action and in this case the extent to which a contract can be varied.

The Court provided the following reasons as to why to include a NOM clause:

  • Prevents a formal contract from being undermined by informal means which could be open to abuse.
  • It can avoid disputes about whether a variation was intended and the exact terms of the variation because oral discussions can easily give rise to misunderstandings.
  • Formal measures regarding variations make it easier for companies to restrict those providing authority to agree the relevant variation.

The above are all considered legitimate commercial reasons which the Court will normally take into account when reviewing a NOM clause, unless a there is an overriding reason of public policy.

However, the Court also noted that there was a risk that a party may act on a variation and then be unable to enforce the variation. For the Court to intervene in this circumstance, there is a high threshold for the party showing reliance on the variation and it may be difficult to establish.

Lessons learnt

The above case provides certainty that Courts will likely find a NOM clause enforceable. NOM clauses are usually found towards the end of the contract as standard clause. When considering NOM clauses and variations in procurement contracts:

  • Please ensure that you understand the formalities of a NOM clause and that you wish to be bound by the clause before executing the document.
  • If the contract contains a NOM clause, ensure that contract management are aware that variations will need to be in writing and in the format prescribed in the contract to avoid dispute.
  • Ensure that you consider the nature of the variation in the context of Regulation 72 Public Contract Regulations 2015 (modification of contracts during their term).