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Complex procurement

The following is a short introduction to complex procurement together with a guide to OGC’s recommended policies, tools and guidance that will assist you through the process. Given that such projects often have unique and specific characteristics, this is not a step by step procurement guide, and for such projects you will normally need to take advantage  of expert and specialist advisors, either acquired in-house or externally.

Before you start: Overview

Complex procurements require a strong project structure, considerable expertise, governance and processes, advanced tools and probably several years' worth of effort. Examples include the acquisition of an aircraft carrier or outsourcing an entire ICT operation. Procurement models available to deliver such projects may include the Private Finance Initiative (PFI) (except for ICT) or other Public Private Partnerships (PPP), which in themselves present options for the funding of major capital projects, as well as options for project and operational delivery. In these procurements, you may also be faced with a situation where the market is limited or even non-existent, which then requires a very informed approach if value is to be achieved.

Common Features

The list below describes some characteristics that are often attributable to complex procurements. 

  • It is not possible to define upfront the technical means capable of satisfying the objectives or the financial make-up of the project.
  • The specification is complex and/or innovative.
  • The procurement is novel to the authority or there are high risks in delivery; whether technical,geographic spread or reputational risk.
  • The contract will be long term.
  • Competition is restricted or there are only a few dominant suppliers.
  • The capabilities and skills required to deliver the procurement are scarce or not understood.
  • The contract will be based on unusual or innovative commercial models (e.g. a PFI or PPP variant).
  • There are significant integration elements with existing business requirements.

However, please note that the presence of one or more of the above attributes does not necessarily mean that the procurement is a "particlularly complex contract" which would be necessary to justify the use of Competitive Dialogue. Please refer to OGC's Competitive Dialogue resource page for further information on the necessary justification for Competitive Dialogue.

Procurements that incorporate the above characteristics may often include the greatest risks and potential opportunities and attract the strongest public scrutiny. Furthermore, senior non specialists are likely to have a key role to play in such procurements. 

In all complex projects, senior stakeholders in Government and SROs will find considerable advantage in developing their policy and strategic thinking through business-to-business engagement of their potential suppliers; developing a stronger understanding of the art of the possible and preparing better to manage uncertainty. This does not have to compromise the procurement process. For more information, consult "A Formula for Success (PDF, 1,690KB)   . Please also refer to HMT's document Infrastructure Procurement: Delivering Long Term Value which sets out the steps Government is taking to secure value for money in its procurement of significant assets, infrastructure and long-term service provision. These measures are being taken in recognition of the continually evolving needs of the public sector, and also the changing approaches to complex procurement that have been developed over the past 15 years, many building on experience of the Private Finance Initiative.

The three key stages (described generically) of a typical complex procurement process are shown here in the complex procurement lifecycle. Click on individual stage headings for more information on appropriate tools templates and guidance to help you through each of these stages. Expert and specialist advisors, either acquired in-house or externally will often be required.

The Legal and Policy Context

Public sector procurement is governed by the Regulations that implement the EU Procurement Directives. These apply to the majority of procurements with a total value over a specified threshold. They stipulate the procedures to be followed for the procurement process, especially relating to time limits, specifications, advertising, and tendering and contract award. You must adhere to these regulations in all your procurements exceeding the threshold. For the purposes of this guide, we have suggested a competitive dialogue approach, however, you will need to define the most appropriate procedure for your procurements on a case-by-case basis. You must apply the key principles of public procurement. These require the achievement of value for money, including appropriate quality and service to meet business needs, and appropriate governance e.g. adherence to HM Treasury rules concerning the use of public money in procurement. There are also a number of other key OGC policies to incorporate in your procurement approach including those relating to environmental sustainability and social issues, innovation and collaboration.

Legal Framework Page
Key Policy Principles Page

Go to complex procurement lifecycle diagram