| 5.1.1 | The central concern in taking procurement decisions is to achieve value for money (VFM). VFM is defined in Managing Public Money Northern Ireland (DFP, June 2008) as "the optimum combination of whole life cost and quality (or fitness for purpose) to meet the customer's requirements." Another definition given by HM Treasury in the context of infrastructure procurement is: "securing the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought. It is not about minimising upfront prices. Whether in conventional procurement, market-testing, private finance or some other form of public private partnership, value for money will involve an appropriate allocation of risk." (Section 4.1 of Infrastructure procurement: delivering long-term value, HM Treasury, March 2008). |
| 5.1.2 | There is no policy preference in favour of any particular form of procurement. The majority of public sector investment has been, and will continue to be, procured through conventional means. PFI or any other PPP should only be pursued where it delivers best whole life VFM, and then not at the expense of staff terms and conditions. |
| 5.1.3 | A Green Book-style strategic option appraisal is required prior to any assessment of alternative procurement routes, in order that the strategic policy choice and the procurement choice are both explicitly and separately justified at the earliest stages. |
| 5.1.4 | All proposals, including those where the private sector is involved, should be fully developed before tenders are invited. Where implementation will be by procurement, there are extensive requirements that need to be met under European Commission Directives and also under regulations within the United Kingdom. These must be complied with at all stages. |
| 5.1.5 | Where there are alternative procurement options, they should be examined carefully before proceeding. An introduction to the main alternative forms of procurement currently available is provided in HM Treasury's key policy document Infrastructure procurement: delivering long-term value (HM Treasury, March 2008). |
| 5.1.6 | DFP's Central Procurement Directorate (CPD) provides detailed guidance on the procurement options that are available, and how to conduct the relevant procurement process. The assistance of CPD, or if appropriate, another designated centre of procurement excellence (CoPE), must be sought before undertaking any procurement. The CPD website is at http://www.dfpni.gov.uk/cpd. It contains a variety of useful resources on procurement issues including, for example, several Procurement Guidance Notes and various other items of Guidance for Purchasers. |
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