contracts – airdesk

The rules of the game

Posted on September 4, 2026 | by Airdesk | 1 Comment

This article is part of a series about large-scale, collective, public-sector procurement. It is written mainly for the people responsible for these procurements. The overall aim of the series is to describe the obstacles in the way, and show how to overcome them. It uses laptops as an example, but the same ideas could apply to other categories.

A previous article set out the scaffolding of the topic, in six parts. This part is the third: about the legal constraints that apply to a public sector procurement. This is after we consider the technical requirements and the broader user needs; and before we take on the problems of collective action, the economic case, and the organisational arrangements to make it all come together successfully.

A procurement is a competition between sellers to win a contract to supply something. Competitions usually take place under a set of rules. In our case, unlike a private-sector procurement, the rules are set by legislation. This has a powerful effect. When you are preparing the requirements, you need to think, not “will I be able to explain this to my team?”, but “will I be able to justify this in court?”, and what are the consequences if I get it wrong.

The rules of the game are in three places:

Primary legislation in the Procurement Act 2023
Secondary legislation contained in the Procurement Regulations 2024
Guidance from the Cabinet Office.

This article is not going to cover the ins and outs of the legislation. Instead, it will focus on the main elements that affect the way we develop the requirements for this type of large-scale procurement.

You might assume the rules are set up to protect the interests of the organiser of the competition (the public-sector body as buyer or “contracting authority”). But that is not the case. In many ways, the rules are set up to protect suppliers. The legal framework places additional obligations on the buyer, not the supplier.

We already determined that, to achieve the best value, we should express our requirements in as open, or product-neutral, a way as possible. We want to try to get behind the marketing terms, or the different technologies a manufacturer may use to achieve a performance or functional characteristic. But the obligation goes considerably further than this:

Firstly, we must allow all suppliers to compete fairly
Secondly, we must express requirements in a certain way, and may not express them in others.

These two factors lead us to a way of working that I will come on to at the end.

Fairness

Section 12.1(c) ” In carrying out a covered procurement, a contracting authority must have regard to the importance of….sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions”.

This creates a duty towards suppliers. But I wonder how far we are expected to go in allowing a supplier to understand something. That seems quite open-ended. Suppose they don’t want to understand it because it is to their advantage not to.

Section 12.2 “In carrying out a covered procurement, a contracting authority must treat suppliers the same unless a difference between the suppliers justifies different treatment.”, and 12.3 “If a contracting authority considers that different treatment is justified in a particular case, the authority must take all reasonable steps to ensure it does not put a supplier at an unfair advantage or disadvantage.”

So we need to treat all suppliers the same; but we may not yet know who they all are. How can we then treat them all the same? We would need either to engage with all of them, or with none of them. I can see the sense of this once a formal procurement has opened, but it seems very difficult to do before that.

The Act says that we may carry out a “preliminary market engagement” with suppliers.

Section 16.1 “Before publishing a tender notice in respect of a public contract, a contracting authority may engage with suppliers and other persons for the purpose of—
(a) developing the authority’s requirements and approach to the procurement;
(b) designing a procedure, conditions of participation or award criteria;
(c) preparing the tender notice and associated tender documents;
(d) identifying suppliers that may be able to supply the goods, services or works required;
(e) identifying likely contractual terms;
(f) building capacity among suppliers in relation to the contract being awarded.”

This makes obvious sense if we decide to buy something out of the blue. We investigate the market, identify suppliers, and open a competition. But an organisation buys laptops year in and year out. It has established relationships with existing and potential suppliers. The relationship may include, for example:

Attending new product launch events
Evaluating new products
Asking questions about new product features
Discussing different procurement models.

How are we to do this with all potential suppliers equally? If we cannot, how are we to balance it up to make sure that there is no unfair advantage to the suppliers we engage the most with? And why should they engage with us, if the advantage they gain by doing so must be removed in the procurement?

This all sounds as though it should be a code of practice, “as far as is practical and proportionate”. But it is not. It is a legal obligation.

And what does “unfair advantage or disadvantage” even mean? Suppose I learn that one manufacturer can embed a certificate in a device to verify that the components of the laptop have not been altered since manufacture. Suppose I think that is a very good idea, to combat the heightened risk of tampering, and I add it to my requirements. Suppose then that another manufacturer tells me they don’t do that, and for a good reason. Are they unfairly disadvantaged? They might say: you have been listening to Supplier X but you have no evidence this is an effective solution. Instead we use another mechanism to ensure there is no tampering. What then?

Technical specifications

Section 56 Technical Specifications covers the terms we may use to define our requirements.

Section 56.2 says: “The procurement documents may not refer to design, a particular licensing model or a description of characteristics in circumstances where they could appropriately refer to performance or functional requirements.”

Section 56.7 adds: “Unless the contracting authority considers it necessary in order to make its requirements understood, the procurement documents may not refer to a particular—(a) trademark, trade name, patent, design or type, (b) place of origin, or (c) producer or supplier.”

Section 57.8 adds: “If the matters mentioned in subsection (7) are referred to, the procurement documents must also provide that tenders, proposals or applications demonstrating equivalent quality or performance will not be disadvantaged.”

This sounds reasonable enough if it were a code of practice. It corresponds to our earlier conclusion that we should express requirements in as product-neutral a way as possible. But this is a legal requirement, not guidance.

So let’s list some of the properties used by manufacturers to describe a laptop:

Laptop
Clamshell
Processor make and model (e.g. Intel Core 5)
Thunderbolt
Touchpad
TPM
WUXGA, PixelSense or Liquid Retina
LCD panel
Touch screen
Anti-glare
Low blue light
HDMI
DisplayPort
SSD
DDR5
Wi-Fi 7
HDR camera
Long life battery
Fingerprint reader
Backlit and spill-resistant keyboard
MIL-STD-810H.

We know what these are, but would you like to try to express them as performance or functional requirements, as the Statute says we should? It is quite a challenge. So, as the contracting authority, we have a problem. We may not use terms that everyone understands, if they could instead be given as performance or functional requirements. We must also accept an “equivalent” product. But, unless we can define the performance or functional characteristic, how can we know if it is equivalent or not?

Subsections 3-6, and 9, cover the use of standards. They refer to:

UK standards
Internationally-recognised standards
Equivalent standards from another state.

For standards set by national and international standards bodies, such as ANSI, ISO and IEC, or the International Bureau of Weights and Measures, the meaning is clear. But, at least for technology, many standards are set either by industry associations, independent third parties, or government agencies. There are often several organisations covering similar ground. Is a specification developed by a U.S. not-for-profit organisation like the Trusted Computing Group (TCG) an “internationally-recognised” standard, or not?

The solution is to unbundle each of these terms into what we actually require, in performance or functional terms, and what we can verify. We saw this in the previous article about requirements. This is an example for the display: first the manufacturer’s description; then the product-neutral requirement.

Specification

Item	Specification
Size	14″ diagonal
Aspect ratio	16:10
Resolution	WUXGA (1920×1200)
Touch	On-cell touch
Type	LCD
Brightness	400 nits
Contrast	800:1
Colour gamut	100% sRGB
Viewing angle	Ultra-wide
Coating	Anti-glare
Hardness	[not given]
Blue light	Low blue light
Privacy	Privacy Guard

Requirements

Item	Requirement
Size	13.50″ to 14.49″
Aspect ratio	[not necessary]
Resolution (native hardware)	Physical grid of 1920 horizontal and 1200 vertical pixels [minima]
Touch	Must respond to touch contact at three or more points simultaneously
Type	[not necessary]
Brightness	400 cd/m²
Contrast (static ratio)	800:1 in white luminance to black luminance
Colour gamut	100% sRGB
Viewing angle	Plus or minus 80% from the perpendicular with contrast ratio > 10:1 in horizontal and vertical angle
Reflection	Reflected luminance < 30 cd/m² at 500 lux ambient illumination
Hardness	3H under ISO 15184 test conditions
Blue light	[not required]
Privacy	Device has a user-selectable option in hardware to reduce the viewing angle

Rather than go into the details of each item, here are a few general pointers:

Viewing the product specifications of different manufacturers, we can see differences that we need to accommodate. For example, 14″ is a common screen size, but Microsoft makes a laptop with a 13.8″ screen, and Apple one with a 14.2″ screen. We would be excluding them unnecessarily unless we had a specific reason why only a screen of exactly 14″ would do.
Some of these requirements may seem overly pedantic. But the manufacturers themselves have to deal with these criteria when they design the device and select components. So a close working relationship with manufacturers can help us define our requirement. We don’t need to depend only on their published specifications. We can also look at the component datasheets themselves, and we may use those as a source for verification that a requirement is met.
Elsewhere in the requirements we will state that a device much achieve Windows Hardware Compatibility Programme (WHCP) certification. The WHCP specification defines in detail what a device must do to support the relevant features of Windows. For example, it has an extensive System specification for a touch digitizer, which then extends into a Component specification. We do not need to define exactly how a screen responds to touch, because the WHCP does it, provided that the screen responds to touch at all.

Conclusions

This might all seem a bit much. We know roughly what laptops are suitable. We know their specifications. We want to say: “give me a price for one like that”. But I look at it another way. First, this is a very large procurement, with a value in the £ hundreds of millions and potential benefits of £ tens of millions. We might not be used to doing it this way, but that doesn’t mean it is wrong or unnecessary. Second, we are doing a public-sector procurement, and the legal framework exists to provide wider public benefits and not only value for money.

In later parts of this series we will take a look at the economic case, and how to organise ourselves to carry out the procurement effectively.

Next: collective action.

Government Commercial Problems with IT Procurement

Posted on March 1, 2023 | by Airdesk | Leave a Comment

Working in IT, I come across procurement problems frequently. The root cause, it seems to me, is that government procurement rules are implicitly designed for a steady state, whereas IT projects implement change, which is inherently imprecise. These rules need a radical overhaul. The new Procurement Bill, currently (Feb 2023) going through the House of Commons, aims to do this.

Problems

What sort of problems? 1) Long delays. A procurement that might be a simple executive decision in the private sector can be a three or six month exercise in the public sector. On a project, delay has a cost. This cost often outweighs the potential benefit of the procurement process. 2) Inflexibility as requirements evolve. Sometimes you don’t know exactly what you need until you talk to suppliers. But you can’t talk to suppliers without a formal procurement process.

I cannot give specific cases, for reasons of client confidentiality. But I can highlight the areas of the procurement rules that create these problems. The intention of the public procurement policy is clear and legitimate: to achieve “the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought”. The question is whether the rules do this in practice.

I must say at the outset, these thoughts are from a “user” perspective. I have no great knowledge of the procurement rules, only my experience in performing procurements as part of an IT project. The amount of regulation and guidance applying to procurement is vast, and I don’t know how anyone could master it. The scope is vast too: £ hundreds of billions of contracts, of every conceivable type, and ranging in value from £ billions to £10,000. I don’t believe it is realistic to try to codify the rules for this vast enterprise, but that is what the policy does.

Long delays

I led a piece of work to implement a small piece of software that integrated two different systems. There are four products that do this. It is quite a niche area, with not much published information. The value of the purchase would be small, in relation to the two systems being integrated. The products are priced by volume of usage, with annual subscriptions. There were various technical complications about integrating with the two specific systems in our case.

The obvious thing to do was to buy a few licences and learn on the job. We were not allowed to do this. The rules said that no purchase of any kind could be made without a selection process, in this case to decide which ones to trial. The public information was not sufficient to justify the selection of a single product to trial. The next obvious thing was to talk to vendors. We were strictly not allowed to do this. Talking informally to any vendor would prejudice a fair selection.

So we developed our selection criteria as best we could (based on what we could glean from the published information), and then carried out a systematic trial of all four products sequentially. The trial involved actually implementing all four products, and asking staff to evaluate their experience when using them. The experience was almost identical, as we expected.

Some of our important selection criteria were technical, for example compliance with security requirements, and licensing terms. For these, we had to ask the vendors to respond to an RFP. As you can imagine, the responses were inadequate to provide any assurance, without speaking further to the vendors.

After going through the selection process, amazingly, we had not actually completed the procurement. All the vendors sold licences through resellers, as you would expect. So, after the selection, we needed to pick a reseller. You’ve guessed it! We needed a procurement to pick a reseller to sell us the licences for the product we had selected. Fortunately, we were able to use the Crown Commercial Services framework to ask for quotes.

The end result was that we purchased a few licences for the product we expected to pick at the beginning, but many months later and at considerably greater cost than the cost of the licences.

The basic problem here is that we do not live in a world of perfect information. At the outset, we cannot know all the ins and outs of different products. Vendors design their product information to highlight advantages and hide weaknesses. Vendors do not publish real prices. Vendors do not respond to RFPs with full and honest answers to questions.

Think of it from the vendor’s point of view. Some government department wants to make a small purchase. The department invents a long and complicated process and invites them to participate. What should they do? Obviously, just send them the data sheet and the price list. Why would they go to the effort and expense of responding when the total profit if they won would be less than the cost of responding?

Inflexibility

I led a project to upgrade the technology of an existing system, the purpose of which was to enable integration with another system. Sorry if that is a bit obscure: the reason is confidentiality.

The original system was contracted for before the integration even existed. We were not allowed to select our new network supplier with the integration built in to their product. This service was not in the scope of their new contract, because no-one at the time knew we would need to do this. It would have required a completely fresh procurement of the primary product, which would have taken at least a year.

In this case we were allowed to vary the existing contract. The rules on variation are highly complex. They require a good understanding of Annex A – Regulations 72 and 73 of the Guidance on Amendments to Contracts 2016. We were allowed to vary the contract but only provided the contract used different technology to do the same thing.

This gave us a few big challenges to negotiate. One, we needed a new type of support for the new technology not provided in the original contract. Two, we needed a third party (at additional cost) to provide a service to assist in the integration.

After something like a year we had completed the integration. At this point there was less than a year to run on the existing contract. But we could not extend the contract. The rules on extension are especially severe: they are one of the “red lines” for IT procurement. So the next stage had to be a full procurement of the whole service, having just completed the transformation of the previous service.

The basic problem here is that we don’t live in a world of isolated products and services. They are all inter-related in some way. It is not possible to have perfect foreknowledge of all the ways the services might need to change in the future.

Observations

I have a few observations.

Procurement rules do not take account of the cost of complying, in relation to the value obtained.
They assume the availability of adequate market information to make perfect choices without speaking to vendors.
They also assume vendors can and will respond with accurate detailed information about what they offer.
They do not take sufficient account of the relationships with other products and services, and the way these all evolve over time.
It is simply not possible to comply with the rules intelligently, without having a large and skilled Commercial department.
Commercial department cannot have a full knowledge of the product or service being procured and, therefore, there will be extensive delay or bad choices made.
Delay is built in to the system, and the cost of delay is not accounted for.
The cost and delay of procurement means that people are incentivised to wrap up products and services into large contracts that preclude innovation and competition – the exact opposite of what is intended.

Procurement Bill

The original Public Contracts Regulation 2015 stemmed directly from the EU Public Contracts Directive. The intention was to make contracts open across Europe.

But the idea that you can regulate all procurement across all of Europe with a value of more than £138,760 (Jan 2022 threshold) seems unrealistic. Let’s say you have an organisation of 10,000 staff. Let’s say a contract might run for 5 years (printing, laptops, software etc.). The threshold means that any contract worth about £3 per member of staff per year must be subject to a full, open, procurement. Let’s say the vendor profit on the procurement is 20%, or £27,752. The procurement process will cost more than that!

The explicit aim of the current Public Procurement Policy is to obtain value for money. But people don’t need rules to enable them to obtain value for money when buying a holiday, or a car, or the weekly shopping. People will do this for themselves. What the public needs is rules to prevent corruption. Anything that knowingly does not obtain value for money is corrupt. The new Procurement Bill says it aims to do this: “Integrity must sit at the heart of the process. It means there must be good management, prevention of misconduct, and control in order to prevent fraud and corruption.”

I will leave it to others to describe the changes in the new bill. But it is interesting to consider how it might affect the two cases I mentioned.

A below-threshold contract is one worth more than £12,000 and less than (I think) £138,760
For a below-threshold contract, the contracting authority “may not restrict the submission of tenders by reference to an assessment of a supplier’s suitability to perform the contract [including technical ability]. I take that to mean that all procurements must be open to all potential suppliers and not shortlisted. That is admirable, and I see no difficulty in making all these tenders public. But for obscure and specialised requirements the result is likely to be a deluge of irrelevant tenders and/or no valid submissions at all.
This does not apply to frameworks, so the best way to procure anything below-threshold will always be through a framework. But frameworks can only sell commodities. They can’t sell niche specialised products.
Modifying an existing contract is covered in Section 74 and Schedule 8. I think a contract extension is limited to 10% of the term, i.e. 6 months of a five year contract. This is still not enough where a change of circumstances occurs during the contract.
The provision for additional goods, services or works during a contract seem less restrictive then before. “A modification is a permitted modification if (a) the modification provides for the supply of goods, services or works in addition to the goods, services or works already provided for in the contract, (b) using a different supplier would result in the supply of goods, services or works that are different from, or incompatible with, those already provided for in the contract, (c) the contracting authority considers that the difference or incompatibility would result in (i) disproportionate technical difficulties in operation or maintenance or other significant inconvenience, and (ii) the substantial duplication of costs for the authority, and (d) the modification would not increase the estimated value of the contract by more than 50 per cent.” That seems to be a lot more flexible than before.

The scope of government contracts, even just IT contracts, is vast and I don’t know how it is possible to codify the rules governing them except by introducing a great deal of bureaucracy and expense.

Curiously, the word “integrity”, despite being one of the bill’s objectives, only occurs once in the bill, other than in the statement of the objective. It occurs in the context of the supplier’s integrity. But, when a private sector organisation contracts with a vendor, the organisation is relying on the integrity of the staff, not the vendor. If the staff act with integrity, the organisation is confident the best choice will be made.

Speaking for an SME, I’m glad the bill has provisions to make it easier for small businesses to obtain contracts from government. But I have difficulty seeing how that will work in practice. Bidding is an expensive process. The way a small business manages the cost of bidding is to screen the opportunities for a competitive advantage. This might be having a good reputation with previous clients, or offering a high quality of service, or having strong skills in a particular area. These are intangibles that are screened out in a bureaucratic tendering process.