What are Procurement Policy Notes and How to Use Them

Procurement has become an increasingly complex function that tests an organisation’s understanding of the rules and how to work within governmental guidelines to better manage this essential service. Procurement Policy Notes (PPN) are a vital component to these guidelines that inform organisations on how to contract with authorities in regard to priorities for public procurement.

For over a decade, eXceeding has been helping organisations with their strategic approach to procurement. Founded on the premise of providing impartial advice, we work with organisation’s to help them understand the best practices and routes to market for procurement and see how costs can be easily optimised.

Procurement Policy Notes are a complex thing to understand at first. Within this article we will help you understand PPNs in greater detail, by clearly defining what they are, and applying them to real life examples.

What are Procurement Policy Notes

A procurement policy defines how an organisation should conduct its procurement. The policy looks to maintain a consistent and efficient process that will provide an organisation with its own approach and best practices to follow. Within the public sector, procurement policies will look at the following areas:

• Value for money
• Routes to market i.e. Open, Restricted, Competitive dialogue procedures vs frameworks etc.
• Sourcing
• Support of growth
• Transparency
• Payment
• Conducting the procurement
• Privacy and security
• Supplier management.

All organisations within the public sector need to be able to understand what a PPN is, and have access to any regulation and policies that relate to the type of procurement they are looking for. A PPN will be issued by the UK government as well as the devolved governments of Scotland, Wales and Northern Ireland. These PPNs will provide the necessary information and guidance for organisations.

Public procurement notes can be written at any time by the authorities to provide updated guidance and information to organisations should certain situations arise or conditions in the market change. During the start of the COVID 19 pandemic a new PPN was written, providing guidance to organisations on payments to their suppliers.

Take a look at the most recent PPNs released by the UK government.

How are Procurement Policy Notes Used?

PPNs are not limited to what they cover. You will be able to find a PPN that covers every area of the procurement process. As the arena progresses and changes, so will the notes and guidance that cover it. This is due to the nature of the public sector and how government bodies must be fair and honest in the way they choose their suppliers. Here are just a few examples of procurement policy notes and how they are used by the government:

Carbon Reduction Plans

In this PPN, the UK government illustrates how organisations in the public sector that are looking to become governmental suppliers need to work on a carbon reduction plan.

This PPN was written back in 2019 after the UK pledged to achieve ‘net zero’ carbon emissions by 2050. This was done through a legal commitment and to support this plan, the government developed a new commercial policy measure that impacts all departments and ‘arms length’ bodies.

Procurement in an Emergency

A PPN that is very relevant in the midst of a pandemic such as COVID 19. This PPN provides contracting authorities with the options available to them when responding to an emergency situation.

The note stipulates the power contracting authorities have within an emergency, such as foregoing some standard practices whilst maintaining the major areas they cover (value for money, ethical sourcing, privacy and security etc.). This can include extending existing contracts at their current rate, directly awarding contracts if an absence of competition exists, moving to a dynamic purchasing system. These options are in place for an urgent requirement of goods.

Welsh Government Sourcing Building Supplies

This document is known as a WPPN as it comes from the devolved Welsh Government. The PPN provides advice to the different bodies within the public sector on how to manage public pressures such as availability and affordability of building materials within the country.

How are Procurement Policy Notes Used?

Procurement Policy Notes are used by bodies in the public sector as a guide on what to do and what regulations to follow as a contracting authority. A prime example of how they are used comes from a PPN published on the 10th December 2020 that informed contracting authorities on the changes to regulations once the UK ends its transition period with the EU.

The PPN clearly states when it comes into effect and who it applies to – in this case it is on the 30th December 2020, all procurement of goods, services or works for all contracting authorities (central government bodies, non departmental public bodies, local authorities, executive agencies, NHS and the wider public sector).

It also states what actions must be taken. In this instance, the PPN discusses how all new procurements must be advertised through their platform ‘Find a Tender Service’. It also stipulates that it does not impact other platforms such as MOD Defence Contracts Online and that this service will continue to operate as usual.

A PPN will also cover how it might impact ongoing procurement contracts. In this example, it states that any contract taking place before the 1st January 2021 or any contract ending after that date will follow the pre-existing regime. In this instance it is only procurement taking place after the aforementioned date that will be in line with the regulations stated in the new policy.

The PPN may go on to state any further possible changes or updates that may be coming and expected time frames. The PPN that was published on the 10th December informs contracting authorities that, in the short term, there will not be any major changes in place but that the procurement reform process is open until the 10th March so it is not a full gone conclusion.

In Summary

Procurement Policy Notes are documents that inform and guide public bodies on how to procure goods, services and work in a fair and unbiased wayThe documents also ensure that this process is carried out in the most cost effective, ethically sourced, secure manner whilst maintaining good supplier management. A PPN can be used to provide updates on changes to regulations and give greater clarification during times of emergency.

For any organisation that wishes to work in the public sector, adhering to PPNs and giving the best proposal possible can be a hard task. Find out more about our unique approach and how we can help solve your procurement problems.