Suppliers and demand: Civil servants rate the government's strategic suppliers

Thirty three companies take the lion’s share of central government procurement spending, between them receiving roughly £10bn of Whitehall money each year. But who are they? Do they truly understand the public sector? And do civil servants trust them? Rebecca Sims-Robinson crunches the numbers.

Over the past two months, CSW’s colleagues in Dods Research have spoken to over 1,500 civil servants about their perceptions and understanding of the 33 main suppliers to government. The aim of this research was to understand which of the Cabinet Office’s strategic suppliers are viewed most favourably by the civil servants who work alongside them to deliver effective public services.

What is a strategic supplier?
In 2010, the Cabinet Office selected a list of (then 40) “strategic suppliers” who had a won a significant portfolio of contracts across government and created a plan for a successful relationship with this group. Of the £40bn that central government spent with third parties in 2012-13, £10bn of this was with the strategic suppliers identified by the Cabinet Office, who are estimated by the National Audit Office to have saved the government £840m over the same period. By renegotiating their contracts, collecting a range of performance data, and providing a crown representative to each company, the Cabinet Office would be able to meet its 2010 objective to gain control over spending in departments, save money, and share best practice between departments. 

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Why ask the civil service about strategic suppliers?

It is important that feedback mechanisms are in place to check the work of companies who are delivering an increasing slice of public services. As the Cabinet Office points out: “Underperformance by strategic suppliers is bad for the delivery of public services and the taxpayer.” Speaking to public servants who work with private contractors is an effective means to measure how well the strategic suppliers are working. 

What did the results say?
The 1,551 civil servants who took part in the survey were asked which of the 33 suppliers they were previously aware supplied services to government, and based on their responses we asked follow-up questions inviting them to rate those firms in three categories: value for money; understanding of public sector needs; and trustworthiness.

Each company received a score of between -2 and +2 for each of the three categories, where -2 would mean that all the respondents strongly disagreed with each statement about the supplier, and +2 would mean that all the respondents strongly agreed. The combined scores are therefore out of a possible +6, and are shown in the chart above.

While the scores for the top seven companies are low, it should be remembered that these are aggregate scores – statements of disagreement are weighted equally against statements of agreement, and it would be very unlikely that any company would receive a positive response from every participant. That said, even for the best-performing suppliers the scores are not far from zero – a neutral response indicating neither good nor bad. 

Of the 33 strategic suppliers to the Cabinet Office, there were seven overall winners.
1. Microsoft
2. DHL
3. BT
4. Virgin Media
5. Vodafone
6. BAE Systems
7. IBM

There is something strikingly obvious about the list of the top seven. They are all household names, and nearly all manufacture consumer products. Although the analysis was weighted so as not to give undue favourability to the companies who had the highest levels of awareness, the most well-known companies still came out on top. While the research cannot say for sure, this would suggest that perceptions of these companies as suppliers cannot be separated from their brands in consumer products and services. The exception to this trend is BAE systems, which gives hope that the results we see here are based entirely on perceptions of the companies as suppliers, and not as brands overall. 

What do the results mean?
The final scores are combined from ratings in “public sector awareness”, “trust” and “value for money”, out of a possible score of 6. As can be seen in the graph, even the highest scorer, Microsoft, only returns a score of +0.86. In the main this is caused by ambivalence among respondents – even for the best-known suppliers many civil servants chose neutral or don’t know responses when asked to rate them on the three key issues. This was even the case among those who said that they had worked directly alongside the supplier in question. 

Furthermore, scores are generally dragged down (for all companies) by respondents’ scepticism that the suppliers demonstrated good understanding of public sector needs or value for money – 18 suppliers received negative scores in the latter category, caused by a great many civil servants disagreeing or strongly disagreeing that the supplier provided good value for money.  

So although civil servants are relatively happy to place their trust in these suppliers, they are less sure about the value they provide, or their understanding of public sector needs. But if these companies are not considered good value for money, or to have a good understanding of public sector needs, why are they considered trustworthy? This may suggest that civil servants are not engaged with the procurement process, and are not fully aware of suppliers until things begin to go wrong. This assumption is also supported by the comments from civil servants collected in the survey which recommended that processes need to change on the part of the civil service, as well as the suppliers themselves.

What did procurement professionals say?
Ninety nine procurement professionals took part in the research, and were asked additional questions about the key factors influencing decisions to award contracts. Unsurprisingly, price was by far the most important: two thirds said this was a very important factor, and another 25% said it was important. Only 3% of procurement professionals said this was not an important factor in influencing their organisation’s procurement decisions. 

Trust and understanding of public sector needs also scored highly. Interestingly, flexibility, innovation, and size of the supplier were more important than whether the company has previously supplied the service. It is worth noting that no distinction can be made on whether respondents thought “size” referred to large or SME (small and medium-sized enterprise) suppliers. 

How could services to government be improved?
In addition to the quantitative questions, Dods Research wanted to use the survey to collect some case studies and comments from those who have to work alongside suppliers. The final question therefore was: “How do you think suppliers could improve their services to government?” Half of the participants gave us an answer, and many of the responses were around a similar theme (see page 27).

The results signal a genuine desire from central government to successfully share knowledge between the public and private sector. Suppliers to government cannot provide improved public services without better understanding public service itself. There was a also call for more interaction ahead of the procurement process, so that both supplier and government can understand each other. “It’s about being more collaborative, sharing knowledge and sharing good practices to identify and improve on their services to government,” one respondent from the Cabinet Office said. 

What do the results mean for government?
The most interesting finding to come from this research is an honesty from central government that there is a lack of expertise, and potentially a lack of training, around the procurement process in government. 

Civil servants have also shown themselves willing to trust the strategic suppliers, but need some convincing that these companies understand their needs, or offer value for money. 

What do the results mean for suppliers?
Price will remain the main driver for awarding contracts for the foreseeable future, but “an understanding of public sector needs” and “trust” were also listed as very important factors by procurement professionals. Therefore the scores suppliers received across those categories in this research should be taken seriously – many of the strategic suppliers returned negative scores for these two options. 

What should suppliers do to improve their services to government? Civil servants share their views

“Companies need to speak to a range of employees, not just contract managers and the commercial leads” Grade 7, HMRC

“Work with us to understand the context in which we operate, and respond to that more effectively” Grade 6, Home Office

“A number of suppliers use complicated lead in times, that are not clearly defined or explained. It would be helpful if the process could be clearly defined and the lead in times were more immediate/flexible/agile” 
Grade 7, Ministry of Justice

“Understand us more, and tailor your services. We’re not one-size-fits-all.” Grade 7, Scottish Government

“Because we award contracts purely weighted on cheap cost, we do not have any power to push [suppliers] to improve their services” Grade 6, Competition and Markets Authority

“Work with more pace and urgency and be more flexible when needed” Grade 7, Department for Education

“Work closely with government departments as a conglomerate and not as individual units. Don’t have differential pricing or resource type across departments where the requirements are the same” Grade 7, HMRC

“They should be open to work in an agile way. Changes should not be based on 100 page requirements and change requests” Grade 7, HMRC

“Following the signing of a contract, there should routinely be a clarification stage, included within the price, to reduce the need for changes within a contract.” SCS, Northern Ireland Civil Service


The research will be repeated next year to track improvements and changes. If you would like a copy of the Strategic Supplier Index 2015, or to sign up for next year’s report, please email 

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