Responsible Procurement vision
Our businesses
Opening up opportunities for London’s businesses and encouraging improved practices with our suppliers
Supporting the Mayor’s Economic Recovery Action Plan
The Mayor’s Economic Recovery Action Plan (ERAP), launched in December 2008, sets out practical measures to help businesses and Londoners through the recession to ensure London is prepared to take full advantage of the eventual upturn.
The plan’s initiatives are wide-ranging. They include actions specific to procurement and how it is carried out – such as ‘CompeteFor’, as well as wider measures that provide financial and operational assistance for business. Supporting SMEs is a central theme in ERAP, with actions designed to help them weather difficult economic conditions. Many of the steps we are taking to simplify our procurement processes will benefit SMEs.
Tailored support for SMEs reflects their importance to London’s economic future, as well as the UK as a whole as SMEs represent more than 99% of all businesses in the UK, employ 59% of the private sector workforce and make up 52% of business turnover.
Improving transparency – through CompeteFor
To help ensure businesses and especially SMEs are aware of the contracting opportunities that exist across London, the LDA has led the development of CompeteFor, a web-based system linking buyers and sellers that provide information on contract opportunities. Each part of the GLA Group is now advertising opportunities on the system and in many cases seeking to ensure that new contracts include flow down provisions so that suppliers’ subcontracts are also advertised. TfL, for example, has taken this approach with contracts for Crossrail, which as a £16 billion project, represents a major opportunity for suppliers.
CompeteFor is changing the way some goals, such as seeking to attract a diverse group of bidding organisations, are being approached. Experience is suggesting that the system’s transparency enables companies to identify possible partners and bid in consortia for projects that have a wider scope of work and higher financial value.
Use of CompeteFor has grown rapidly since its introduction. Building on this, the Mayor announced additional investment of £1.8 million for CompeteFor in 2009.
Paying suppliers promptly
Ensuring GLA Group SME suppliers are paid quickly is a commitment within ERAP.
Prompt payment is particularly important for SMEs, who often rely on one or a small number of contracts. For an SME in this position, a payment regime of 20 or 30 days can create cash flow problems, a challenge exacerbated if payments are delayed. The Mayor’s ERAP, therefore, includes the commitment to reduce the standard time for payment of valid SME invoices to ten working days.
To ensure this is achieved, we have introduced regular monitoring of performance across the GLA Group functional bodies. Current performance is published in the quarterly ERAP update.
As part of the GLA Group initiative, the Mayor has been lobbying public sector partners, public agencies and large businesses in London to reduce their standard payment periods for SMEs. We are also encouraging our suppliers to sign up to the Prompt Payment Code which works to ensure that subcontractors are paid within the time period agreed in their agreed terms and conditions.
Simplifying contract pre-qualification
The GLA Group has taken action to simplify pre-qualification questionnaires (PQQs) to make the bidding process less burdensome. By standardizing the paperwork, we have reduced documentation by about half for smaller contracts, an efficiency welcomed by smaller companies. The importance of this is shown by the fact that TfL issued 27 PQQs in the first quarter of 2009, with a value of £260 million. All parts of the GLA Group have taken steps to simplify these processes.
