My Lords, before I speak to my Amendments 84 and 88, I will just say that, while I do not think it is a registrable interest or a conflict of interests, my experience in these things is largely derived from my work, over a number of years now, advising LOW Associates SRL in Brussels, which has a number of contracts with the European Commission and other European agencies. We have participated in procurements on a number of occasions each year in the European context. That gives one quite a lot of experience of the system we are moving from and some of the ways it can be improved. I put that on the record.
My noble friend and other noble Lords may recall that at Second Reading the most important point I made—it is one I will return to on a number of occasions, including when we talk about the procurement objectives and the national procurement policy statement —is that procurement by the public sector is a very large element of economic activity. The way in which it is conducted can have a significant and beneficial impact on productivity in the economy if the issues of innovation are properly incorporated into the consideration of how procurement is undertaken and who the suppliers to public authorities are.
In a sense, the noble Baroness, Lady Worthington, is trying to do the same kinds of things in Amendments 85 and 87. We are maybe trying to approach it in slightly different ways. The same will be true in relation to the procurement objectives.
I hope that in responding to this debate my noble friend can at least give us a sense that we can work together to try to ensure that the promotion of innovation is one of the central aspects of how contracting authorities go about their process of delivering best value, and that the broader externalities of procurement, through promoting innovation in the economy, are realised. They are significant.
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Amendment 84 comes to one of the mechanisms which is really helpful from that point of view, which is that tenders themselves should be expressed in terms
of what you are trying to achieve, rather than trying to specify in detail how it should be done. I have sat there with tenders for tedious amounts of time, trying to avoid the process of merely rehearsing back to the people who wrote the tender how we are going to do the things that they have already specified we must do, when I would much rather they had said, “This is what we’re trying to achieve, these are the outcomes we’re looking for, and these are the key performance indicators we propose to put into place—tell us how you’re going to do it.” If there is a budget limitation or specific requirements, they should tell us those, but they should not tell us that they already know how everything should always be done—as, frankly, it very often felt like they were doing. Often, of course, there was an implicit motive behind this: things were specified in ways that were extremely helpful to incumbents and were difficult for new entrants to comply with, particularly if they had innovative or new solutions to the problems that the public sector was trying to deal with.
I am not fussed about the language; I will not make a stand on it at all. If we can find some way of including in this preliminary market engagement that contracting authorities can go out, engage with their suppliers and new suppliers and find out how the tender can then be expressed in terms which are geared to outcomes and performance indicators, not to specifying detailed processes, let us try to get to that. That is the purpose of Amendment 84.
The purpose of my Amendment 88, on page 11 of the Bill, is geared also to the course of the preliminary market engagement. I was slightly worried when I read this because it seemed to me that, during the preliminary market engagement, contracting authorities need to give additional attention and opportunity to small and medium-sized enterprises, and the same may well be true for new entrants into a marketplace. They need to give them access to information and understanding, because they are often competing against large incumbents.
It feels to me that the legislation is somewhat being written in a way that makes it very difficult for procurement managers not to say, “Oh, but I can’t have this conversation with you because I’m not having that conversation with them”, and an unfair advantage is then created. It would be very easy to say that an unfair advantage had emerged as a result of such a conversation. So, I thought we needed to make clear that in that context, procurement managers must take account of the relative size of the supplier. I have rewritten it; I ask that the contracting authority takes account
“of the size or experience of the enterprise concerned”.
So, if new entrants or SMEs are suppliers to whom contracting authorities can give additional information, opportunities and engagement, the authorities should not construe that to be an unfair advantage. This is all about trying to bring everybody into the tender on a much more level playing field; that is the purpose of Amendment 88, and I commend these amendments to the Committee.