Memorandum submitted by the Department
1. The Department of Health welcomes the opportunity
to contribute to the outcome of this Inquiry by providing this
written evidence on the use this Department makes of the Office
of Government Commerce (OGC) and the services it provides.
2. The Department of Health has an annual internal
commercial spend of around £200 million and a settled estate.
This means it has very few contracts or projects that fall under
the heading of complex or in the area of construction. For this
reason there is little activity, within the Department, that invites
OGC involvement in terms of the Gateway processes they have introduced.
3. On the other hand, whilst accepting that
OGC was exclusively formed to operate within the civil government
arena (thereby excluding the activities of both the MoD and NHS),
there are a number of NHS projects falling into these categories
that invite close co-operation between OGC and the NHS, for which
the Department of Health can and has acted in a linking capacity.
There is therefore a growing association in common practice and
methodology and collaborative procurements.
4. The Department of Health internally operates
a devolved form of procurement, with individual business units
having a high degree of spending autonomy. The business units
are supported by specialist purchasing cells (e.g. IT-buying,
R&D and printing and publicity services) as well as a central
procurement unit that has responsibility for overall policy and
provision of direct support to business units on non-specialist
5. The Department has taken account of OGC advice
and will be using the OGC Gateway process on the re-tender of
the Information Management Services (OIS network and desktop support)
contract. Further Department of Health Gateway reviews of major
programmes such as for the Medicines Control Agency and National
Care Standards Commission will start to appear in OGC summaries
as they are completed. The Department's Private Finance and Investments
Branch is working closely with OGC with a view to implementing
Gateway reviews in the NHS (see paragraphs 16 and 22 below).
6. Where the Department and NHS have produced
guidance on PFI it incorporates the OGC guidance, and where the
Department has not produced tailored guidance the NHS is directed
towards OGC for advice. The Department is represented on OGC's
Interdepartmental Group on PFI.
7. The Department of Health continues to make
use of a number of collaborative contracts (e.g.: hotel booking
services, stationery) which, while set-up by other Departments,
were nevertheless orchestrated by OGC.
8. In terms of OGC framework contracts, both
this Department and NHS Purchasing and Supply Agency (PASA) are
committed to and benefit from use of the government-wide IT services
and equipment catalogues (G- and S-CAT).
9. The Department's central procurement unit
continues to use and incorporate best practice guidance, as produced
by OGC, in its own on-line Procurement Guide. The unit also took
OGC advice concerning its introduction of the Procurement Excellence
10. The central procurement unit acts as the
Department's principal liaison point with OGC for other related
11. Even though the Department of Health has
a relatively settled property estate, it continues to maintain
the good working relationship it built with PACE (prior to becoming
part of OGC) and still draws on OGC's estates' services to assist
and advise in its lease and other property-related negotiations
12. The Department of Health is a heavy user
of the GSI and calls upon OGC customer advice/customer support
services in this area. DH has concerns that customer support by
GSI is not up to the demands now being made of it, particularly
in terms of communication about technical problems affecting users.
We understand the contract is to be re-tendered shortly and will
expect to contribute to development of the user requirement.
Other Points of Contact
13. In addition to the Department of Health/OGC
business relations, outlined above, it should also be noted that
this Department is represented on a number of OGC boards and working
Chief Executive's Advisory Group
Government Procurement Service (GPS)
OGC's E-Commerce Working Groups (various);
Editorial Board of OGC publication
"Government Procurement Forum."
14. In a reversal of roles, the Department of
Health recently invited an OGC representative to sit on a Departmental
Steering Group set up to review of the Department's procurement
15. Like the core Department, NHS Estates makes
good use of OGC best practice procurement guidance and have been
involved in the working groups that developed such policies and
guidance. NHS Estates also considers OGC a useful point of reference
on issues in respect of EU procurement.
16. NHS Estates are actively utilising the OGC
Gateway Review process, calling for OGC involvement, on all high-risk
projects and will apply lessons learned from this experience to
internal reviews of medium- and low-risk NHS projects.
17. Finally, NHS Estates work with OGC through
membership of the Government Construction Clients Panel, PFI Action
Group and both the Benchmarking and IT working groups.
NHS Purchasing and Supply Agency
18. PASA equally makes use of OGC best practice
guidance, particularly in regard to PFI, and has forged close
links to a number of OGC working groups in the e-commerce arena.
19. The Agency works with OGC on a number of
common framework contracts and continues to extend the scope for
contracting for Civil Government and the NHS once rather than
20. OGC and PASA are involved in a number of
procurement initiatives that are expected to result in joint agreements,
open to pan-Government use, such as a single replacement for the
Government Procurement Card/NHS Procurement Card and an agency-staffing
21. Finally, OGC provide a representative on
the Agency's Ministerial Advisory Board.
IPU/NHS Information Authority
22. The Department's Information Policy Unit
(IPU) recognise OGC's role as a central point of advice and guidance
over procurement issues for IM&T and that OGC's work in this
area has led to a number of useful initiatives, including the
introduction of Gateway reviews for two major IM&T projects.
23. IPU/NHSIA are likely to take advantage from
any OGC action to orchestrate and lead cost-effective pan-Government
procurements to support the e-government agenda (e.g.: software,
managed services, etc.).
16 November 2001