Procurement Guide: Compliance and Value for Money

Public Sector Procurement Compliance

This guide provides an overview and actionable steps for public sector buyers to ensure procurement compliance and achieve value for money, aligning with key regulations and guidance:

• Managing Public Money (May 2023)
• The Green Book and its Supplementary Guidance on Value for Money
• Public Contracts Regulations (PCR) 2015
• The Procurement Act 2023
• NHS Provider Selection Regime (for NHS England).

Key Legislation in Procurement: Managing Public Money, Green Book, The Procurement Act and NHS PSR

The key with all of this legislation is that value for money is achieved and that the right decisions are made. This should be done in a way which is open, fair and transparent. Those spending public money need to be accountable. It is these guiding principles which are key.

Managing Public Money:

• Ensure regularity, propriety, value for money, and feasibility in all procurement activities
• Use legal and parliamentary authorisation for spending
• Maintain detailed records for accountability

The Green Book and Value for Money (VfM):

• Balance monetised and non-monetised factors in options appraisal
• Ensure chosen options meet SMART objectives
• Use Cost-Benefit Analysis (CBA) and Cost-Effectiveness Analysis (CEA) for economic appraisals
• Assess options against critical success factors: strategic fit, VfM, supplier capacity, affordability, and achievability
• Integrate risk costs and conduct sensitivity analyses

PCR 2015 and The Procurement Act 2023:

• The Procurement Act has many changes to manage
• Follow competitive tendering procedures for contracts above thresholds
• Publish contract notices on Find a Tender service (FTS) or Contracts Finder
• Comply with exclusion grounds and selection criteria
• Publish KPIs for contracts over £5 million and report annually (Procurement Act)

NHS Provider Selection Regime (PSR):

• Giving additional flexibility for health care services in England with PSR
• Ensure compliance with key principles: transparency, proportionality, non-discrimination
• Publish contract opportunities on the FTS and Contracts Finder
• Maintain auditable documentation of decision-making process

Procurement Tools for Compliance

Procurement Process Checklist

Planning:

• Define requirements based on stakeholder input and intended outcomes
• Align spending with approved budgets and Treasury rules
• Engage governance bodies early for strategic alignment

Developing a Procurement Strategy:

• Design open, fair, and transparent competition processes
• Develop objective evaluation criteria aligned with VfM principles
• Identify and quantify financial and reputational risks

Tendering and Evaluation:

• Advertise opportunities transparently on required platforms
• Apply pre-defined criteria consistently and document decisions
• Obtain necessary approvals for novel or high-value procurements

Contract Award and Management:

• Confirm awards meet all regulatory and VfM standards
• Monitor supplier performance against KPIs and contractual obligations
• Implement robust controls to prevent fraud and manage risks

Embedding Value for Money

• Use the Options Framework to filter and refine options
• Incorporate non-monetised benefits in decision-making
• Conduct workshops to ensure alignment with SMART objectives
• Maintain a comprehensive risk register and integrate risk costs into appraisals
• Encourage iterative appraisals to adapt to new information or strategic changes

Practical Examples

• Managing supplier performance through KPIs for IT services contracts
• Evaluating risks in long-term infrastructure projects
• Upgrading transportation links while balancing risks and benefits

How Thornton & Lowe Supports Public Sector Buyers

Ensuring Procurement Compliance & Value for Money

Thornton & Lowe ensures your procurement practices comply with the detailed provisions of "Managing Public Money". We help develop procurement policies that align with legal and parliamentary requirements and write procurement strategies that optimise cost efficiency and sustainability.

Using tools like the Green Book, we help assess and compare options to achieve maximum public benefit.

We offer outsourced procurement management tailored for smaller organisations, ensuring compliance without the need for in-house expertise. As well as ongoing contract management services to track performance and ensure objectives are met.

From drafting specifications and tender packs to evaluating bids, we ensure transparency, fairness, and compliance with public procurement rules.