THE SOURCING PLAYBOOK - GOV.UK

1 THE SOURCING . PLAYBOOK . Government guidance on service delivery, including outsourcing, insourcing, mixed economy SOURCING and contracting May 2021. Crown copyright 2021. Produced by Cabinet Office This publication is licensed under the terms of the Open Government Licence except where otherwise stated. To view this licence, visit licence/version/3. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Alternative format versions of this report are available on request from Designed by Design102. Contents Foreword by Alex Chisholm 1 4 Piloting first generation outsourcing 28.

2 Introduction Right at the start 2 6 Piloting delivery of a service 28. What is new? 3 Options for running pilots 28. Contacts 3 When to test and pilot 30. Designing effective tests and pilots 30. PLAYBOOK flow diagram 4. 5 Preparing to go to market 32. Summary of the 11 key policies 6. Publication 32. About this document 8 Quality data and asset registers 32. Key terms 8 Clear specifications 32. What is the purpose of the SOURCING 6 KPIs and baselines 33. PLAYBOOK ? 9 Designing evaluation criteria and Who is the SOURCING PLAYBOOK for? 10 avoiding a bias towards low cost bids 34. What is the scope of the SOURCING Resolution planning 34.

3 PLAYBOOK ? 12 Protecting against supply chain risk 34. 1 Preparation and Planning 14 Protecting against costs arising from supplier insolvency 34. 1 Pipelines and market management 14 Prompt payment 34. 6 Pipelines 14. 6 Routes to market 36. 6 Market management 14. Innovation and social value 15 Which procurement procedure? 36. Early engagement 16 Using dialogue and negotiation 36. Transparency 16 Use of frameworks 37. Keeping bid costs down 39. 2 Approval process 18. 7 Model Services Contract 40. 6 Project Validation Reviews 18. Using the Model Services Contract 40. 3 Delivery model assessments 20. How the decision should be made 20 2 Publication 42.

4 6 When is a delivery model assessment 8 Formal engagement with the market 42. required? 20. Setting the tone 42. 6 Using Should Cost Models to understand whole life costs 24 Procurement timelines 42. When considering insourcing a service 25 6 Risk allocation 42. When delivering a service in house 26 Fair return 44. When considering outsourcing a service 26 6 Payment mechanisms 44. Onerous contracts 44. Other barriers to entry and competition 44. 3 Selection 46. 9 Due diligence during selection 46. The selection process 46. 6 Economic and financial standing 46. 4 Evaluation and Award 48. 10 Evaluating bids and contract award 48.

5 Low cost bid referrals 48. Cost vs quality 48. Evaluating social value 50. 11 Resolution planning and ongoing financial monitoring 52. 6 Resolution planning 52. Public sector dependent suppliers 52. Ongoing financial monitoring 53. Compliance confirmation 53. Financial distress 55. Consequences of supplier insolvency 55. 5 Contract Implementation 56. 12 Building and maintaining successful relationships 56. Mobilisation 56. Effective contract management 56. Working together 57. Strategic supplier relationship management 59. 13 Expiry, extension, transition and termination 60. Early planning for contract end 60. Extensions 61.

6 Foreword by Alex Chisholm Delivering outstanding public services is a 1. Publication of commercial pipelines critical function of government. 2. Market health and capability assessments The introduction of the Outsourcing PLAYBOOK 3. Project Validation Review (PVR). in 2019 set out a series of simple guidelines and 4. Delivery model assessments (previously rules to achieve this by improving our decision known as make versus buy assessments'). making and how we deliver public services. 5. Should Cost Modelling Through the publication of version two of 6. Requirement for pilots the PLAYBOOK in June 2020, and now its rebrand as the SOURCING PLAYBOOK , we are 7.

7 Key Performance Indicators (KPIs). committed to ensuring they are successfully 8. Risk allocation embedded in everything we do. The SOURCING PLAYBOOK continues to focus on the same 9. Pricing and payment mechanisms key commercial principles and the new title 10. Assessing the economic and financial better reflects its focus on choosing the standing of suppliers best model for delivering public services. 11. Resolution planning In addition, the SOURCING PLAYBOOK now includes The Consultancy PLAYBOOK ', which The updated SOURCING PLAYBOOK emphasises provides guidance on how departments can that the delivery of public services is a maximise value for money when SOURCING collaborative endeavour involving colleagues consultancy services.

8 From commercial, finance, project delivery, policy and other professions. The Cabinet Office has acted together with colleagues across the Civil Service to Embedding the SOURCING PLAYBOOK into our strengthen capability, provide additional ways of working is a journey the whole of support and hold projects to account through government must continue to walk together. stronger governance frameworks and controls processes. More needs to be done As Chief Operating Officer of the Civil Service, but there are positive signs of progress. I am delighted to support the SOURCING PLAYBOOK and its continued implementation. We set out practical guidance to support delivery and drive improvement on the following key policies, which remain: 1.

9 Introduction Right at the start The original Outsourcing PLAYBOOK , and its improved Civil Service capability through the second iteration, were endorsed by ministers, transfer of knowledge and skills. industry and senior civil servants as crucial steps to improve both our decision making When we do decide to work with the market, and the quality of contracts we place with including small businesses, and voluntary and industry. We continue to focus on supporting community sector organisations, we will build departments to implement these principles. successful relationships to drive innovation and maximise social value. Outsourcing plays For this third iteration, we retain emphasis an integral role in delivering public services on the 11 key policies to get projects right at as part of a mixed economy approach.

10 It the start. This applies whether we decide to is vital that we continue to access the skills outsource and deliver a service in partnership and dynamism that only a healthy, diverse with the private and third sector, insource and marketplace of suppliers can provide. use in-house resources, or a mix of both. This is why we have reframed the Outsourcing By following the guidance, rules and PLAYBOOK as the SOURCING PLAYBOOK ', to principles set out in this PLAYBOOK , we can emphasise that the PLAYBOOK supports a expect to: range of delivery models that should be carefully considered as part of a mixed get more projects right from the start economy' approach to service delivery.