Select Committee on Treasury Minutes of Evidence

Memorandum submitted by the Department of Health


  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 purchases.

Procurement Services

  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 Model.

Related Services

  10. The central procurement unit acts as the Department's principal liaison point with OGC for other related services.

  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 and dealings.

  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 groups, namely:

    —  OGC Supervisory Board;

    —  Chief Executive's Advisory Group (CEAG);

    —  Government Procurement Service (GPS) Management Board;

    —  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 function.


NHS Estates

  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 twice.

  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 contract.

  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

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 23 May 2002