Major outsourcers to build failure contingency plans into government contracts

Other measures designed to ‘revolutionise government procurement’ include pilot schemes for newly outsourced services before committing to external provision

Leading government outsourcers are to incorporate contingency plans for how, in the event of their business failing, another party could step in to provide contracted services.

Technology and business services giants Capita, Serco, and Sopra Steria will be the first firms to create a so-called “living will” for their government engagements, with “other key suppliers to follow” over the coming weeks, according to the government. 

“Carillion was a complex business and when it failed it was left to government to step in – and it did,” said Cabinet Office minister David Lidington. “But we did not have the benefit of key organisational information that could have smoothed the management of the liquidation. By ensuring contingency plans can be quickly put in place in the very rare event of supplier failure, we will be better prepared to maintain continuity of critical public services.”

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The contingency plans form part of a range of measures that the government hopes will “revolutionise” procurement. Another initiative will see services that are being outsourced for the first time subject to a pilot phase before the government commits to using a private-sector supplier. 

Lidington said: “By engaging earlier with the market on the design of outsourcing projects and by requiring pilots for new services, we will learn from experience and deliver better public services for taxpayers.”

By the summer of 2019, departments conducting procurement exercises will also be mandated to consider the social values of potential suppliers. This will include examination of factors such as environmental credentials and “representation of disabled people in the workforce”. Also under consideration will be the extent to which suppliers facilitate access to government contracts for SMEs or “businesses owned by under-represented groups”.

Other measures will see the government’s Supplier Code of Conduct “reviewed and enhanced” in the coming months, while an increased amount of data about the performance of “critical contracts” – including information on response rates and delivery timescales – will be published. 

Sam Trendall

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