August 7, 2022
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House of Parliament

Political impacts on Government tendering

Political decisions can often have major impacts on procurements, both for good and bad. When looking at the government it’s worth bearing the following things in mind.

Most things can be managed and usually offer pros and cons, the key is being adaptable and being prepared to handle them and watch for the signs. 

The effect of fads and fashion

Tendering and commercial fashions come and go. Depending on the current thinking of the government certain types of procurements become much more prevalent.

For example, The Private Finance Initiative (PFI) was a very popular move to get private companies to take on the finance, construction and operating of major facilities (like hospitals).

Industry would invest and then be paid an annual fee by the public sector for decades.

This was a great way of securing investment without locking down government funds – of course it has to be paid back and that leads to many years of ongoing payments, which limits what future governments can do.

PFI has largely fallen from favour now as fashions have moved on.

The need to show decisive action has been taken

Political pressure will often drive Governments to take decisive action, or to do something that looks like decisive action.

Buying large amounts of PPE in COVID is a good example.

The normal procurement rules were ignored and procurements were rushed through enabling material to be bought much quicker, of course not all of that equipment was any good.

Purdah

During an election campaign government activity is specifically restricted to ensure fairness and that no decisions affect the result unfairly

In reality this means major decisions and procurements get delayed.

This isn’t all bad as it can often mean that some smaller or existing deals might need to be placed or extended to maintain capability.

Firms in the right place can take advantage of this.

And sometimes the just plain random and unexpected

In his November 2020 speech Boris revealed increasing spend in Defence and specifically Digital and AI in Defence.

He announced the creation of the Defence Artificial Intelligence Centre and new money that would be going into it.

This appears to have been a surprise for the Defence community who didn’t know what it was and what it was supposed to be for. And then stood up a function and started tendering for it!

Boris did much the same with the Type 32 class frigate. These are recent examples, but there are many throughout history, an attention grabbing headline was needed and duly provided by scriptwriters and policy think tanks.