Any experienced bidder will be well-versed in describing their business continuity measures to public-sector buyers. With the COVID-19 pandemic, concepts that were previously hypothetical ‘worst-case scenarios’ – something to be mindful of, and to prepare for in theory – have become very real, and the long-term repercussions for public procurement are inevitable.
Large-scale, impactful events have always had shockwaves for the tender process. One example at a national level can be found in the Winterbourne View hospital abuse inquiry, which reshaped the way that care services were designed and commissioned, as well as the questions that bidders were expected to answer. Local authorities turned more of their attention to safeguarding and adult protection in an effort to prevent similar abuses from occurring in the future. Similarly, we observed a refocusing on financial resilience as a result of the global financial crisis of 2007-2008; a similar effect was seen when Carillion ceased operations in 2018.
How will COVID-19 impact purchasers’ minds?
In each case, buyers’ perception of the greatest risks to service delivery had changed. For inherently risk-averse public-sector bodies, this meant reverberations throughout all purchasing decisions.
The COVID-19 pandemic will be no exception. It has already changed everyone’s way of life, and it is safe to assume that the questions at the forefront of public-sector purchasers’ minds will be different after the pandemic to what they were before:
- “How will this contractor continue to trade in the event of a severe impact to their operations and their cash flow?”
- “How resilient is their staffing model?”
- “How adaptable are they to completely changing their working practices?”
- “How realistic, believable and achievable are their commitments in reality?”
This change in perspective will likely manifest itself in more rigour applied to business continuity questions in tenders: more extensive questioning; higher weightings applied to relevant sections; and more intense competition amongst bidders with respect to business continuity.
What is next for public sector procurement?
At the time of writing, UK Parliament has enacted the Coronavirus Act 2020 but has not enacted powers under the Civil Contingencies Act 2004. While the Coronavirus Act 2020 grants additional authority to the government with respect to civil liberties and suspending or assuming control of services, the UK is not deemed to be in a ‘state of emergency’ until such a time that the Civil Contingencies Act 2004 is invoked.
What would it mean for public-sector procurement if that were to happen?
An insight is provided by the Ministry of Housing, Communities & Local Government (MHCLG). In November 2018, they produced a good practice guide for local authorities around preparedness for civil emergencies, which is available here. The guide reiterates the duties of local authorities under the Civil Contingencies Act 2004, and includes a checklist for commissioners. The checklist is presented on page 27 of the guide, but to briefly summarise some key points, MHCLG’s recommendations for local authorities centre on ensuring:
- Service providers’ emergency plans and procedures, including business continuity arrangements, are fit for purpose and up to date – this is first and foremost in the guide’s checklist for commissioners
- Service providers have resourcing plans in place, including recovery timescales
- That the authority’s tender processes include a requirement that potential contractors meet their resilience requirements
- Service providers understand responsibilities that may be imposed on them during an emergency
- Service providers’ ability to deal with prolonged or wide-spread emergencies, with due regard to increased demand for services if they deliver to multiple local authorities.
As outlined in a previous update from Executive Compass, the COVID-19 pandemic has severely impacted on the number of tenders being issued across the public sector, but when tendering inevitably returns to normal we expect competition to be even more intense.
How does this fit with resilience and business continuity?
Our expectation – in line with guidance to local authorities from MHCLG, and particularly if we do see the government enact powers under the Civil Contingencies Act 2004 – is that local authorities and other public-sector bodies’ expectations around resilience, business continuity and emergencies will be even more significantly heightened as a result of their experiences during a state of emergency. When public-sector tenders come back in force, be prepared to compete more and more on the strength of your business continuity planning and preparedness for emergencies.
You should therefore recognise and record the success stories in what you are doing to deal with the current crisis. Make clear records of the actions that you are taking, and how they are enabling you to support your public-sector customers throughout this challenging time. When you are changing and adapting the way you operate to deal with the crisis, make sure that your plans are updated accordingly, enhancing your demonstrable ability to manage other challenges in the future.
This will stand you in good stead to compete in the future, when the need to prove your strength and resilience will be greater than ever.