The (Updated) Outsourcing Playbook, an essential aid for commercial professionals

Proxima's John Collington provides a concise overview of the new Outsourcing Playbook, a 62-page document which is essential reading for all commercial professionals
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In June of this year, when many minds in the government commercial and supplier world were rightly focused on other critically important matters, an updated version of the Commercial Playbook was released, with a positive endorsement and foreword by Alex Chisholm the Chief Operating Officer for the Civil Service:

“Delivering outstanding public services is a critical function of government. The introduction of the Outsourcing Playbook last year set out a series of simple guidelines and rules to achieve this by improving our decision making and how we deliver public services. The updated Outsourcing Playbook emphasises that the delivery of public services is a collaborative endeavour involving colleagues from Commercial, Finance, Project Delivery, Policy and other professions. Embedding the Outsourcing Playbook into our ways of working is a journey the whole of government must continue to walk together”.

The first version of the Outsourcing Playbook produced by Meryl Bushell, a highly respected Crown Commercial Representative with a successful track record of outsourcing, operations and commercial/procurement delivery in the private sector, was launched in February 2019, primarily to address a number of lessons learned from high profile outsourced contract and supplier failures.  In my opinion, the first version was quite simply one of the most important documents to be produced by the government commercial function over the past decade - and arguably since the formation of the centralised commercial function - on the strategically important area of procuring and contracting outsourced services. It combined best practice thinking and experience from both the private and public sectors into a useful easy to follow guide, aimed primarily for buyers, but it has been equally as important for suppliers to understand.

 In my opinion, the first version was quite simply one of the most important documents to be produced by the government commercial function over the past decade

The updated version of the Playbook builds on the importance and relevance with a number of additional sections - including 6 pages on a new ‘Delivery Model Assessment’ - recognising the need for a detailed analysis of the costs and benefits to decide the best option.

Whilst it can be expected that all government commercial, financial and project management resources will familiarise themselves with the updated content, I would also urge all large, medium and small suppliers who are either currently delivering outsourced services or have an aspiration to do so, to read and become familiar with the Playbook and associated links. Including to the important ‘supplier code of conduct’, ‘service manual’ specific to IT specific projects and the ‘procurement review service’, a really useful guide when there is a need for a supplier to voice a concern anonymously.  

Who can argue with the simple but ambitious aims as laid out within the Playbook, specifically:

“When we do decide to work with the market, including small businesses, voluntary and community sector organisations, we will build successful relationships to drive innovation and maximise social value. By following the guidance, rules and principles set out in this Playbook we can expect to:

  • get more projects right from the start
  • develop robust procurement strategies
  • engage with healthy markets
  • contract with suppliers that want to work with us; and
  • be ready for the rare occasions when things go wrong”.

Whilst the 62-page Playbook can be initially intimidating to read with it’s typical use of government jargon and abbreviations, the link to relevant phases of procurement and contract planning and the subsequent 13 structured sections are easy to follow and digest, covering:

  1. Pipelines and Market Management
  2. Approval process
  3. Delivery Model Assessments
  4. Piloting First Generation Outsourcing
  5. Preparing to go to market
  6. Routes to market
  7. Model Services Contract
  8. Formal engagement with the market
  9. Due diligence during Selection
  10. Evaluating Bids and Contract Award
  11. Resolution Planning and Ongoing Financial Monitoring
  12. Building and Maintaining Successful Relationships
  13. Expiry, Extension, Transition and Termination

As someone who’s been personally involved in both the buying and selling of outsourced services into the government, as I was particularly pleased to read the updated guidance on ‘risk’ which is featured in section 8 “Formal engagement with the market” - and I respect the author in leveraging her real life experiences to apply basic commercial common sense in this critically important of area, specifically with these 5 clear key points:

When outsourcing departments are expected to:

  • Not ask suppliers to take unlimited liabilities, other than the small number of incidences where this would not be lawful or where a commercial cross‑government policy has been agreed.
  • Where not addressed through the payment mechanism, ensure that contracts include appropriate indexation (i.e. using an index or basket of indices or measure that reflect the underlying costs of delivering the service) where the supplier is managing pricing risks outside their control.
  • Share and mutually agree appropriate risk registers with bidders.
  • Share all data (that is appropriate to do so) relating to the procurement.
  • Not hold incoming suppliers responsible for errors in data (excluding forecasts) where they are unable to complete due diligence (volume forecasts are addressed under payment mechanisms). Where data turns out to be incorrect, subject to procurement law, there should be a contractual mechanism for reflecting this adjusting for errors. Any renegotiation should take place no more than a year after service commencement.”

In summary, the revised Outsourcing Playbook is an comprehensive document for all buyers and suppliers of outsourced services and credit to the government commercial function for producing, maintaining and updating this important and highly relevant document.

You can read more insights from Proxima here.

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