Achieving value for money through procurement Part 2: DFID’s approach to value for money through tendering and contract management
An appropriate overall approach to procurement with good performance in most areas of tendering, but significant weaknesses in contract management.
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This review on achieving value for money through procurement (part 2) was published in September 2018. We awarded a green-amber score and made three recommendations to government. The follow-up to this review was published in July 2020, and rated the government’s response as ‘inadequate’, as a result of DFID’s failure to put in place a formal contract management regime, despite the risks this entails for programme results. We returned to this review in the next follow-up process, published in June 2021, and found significant improvements.
Summary
In 2016-17, the Department for International Development (DFID) spent £1.4 billion, or 14% of its budget, through commercial suppliers on contracts ranging from school construction to family planning services and the delivery of humanitarian aid.
The quality of its procurement and contract management – how it engages and manages commercial firms to support the delivery of aid programmes on time, to budget and at the appropriate quality – is a key driver of value for money for UK aid. It is also a subject of considerable Parliamentary and public interest.
In recent years, DFID has implemented a range of initiatives to strengthen its procurement practices and embed commercial capability across the department – including its 2017 Supplier Review, undertaken to address concerns about excessive profit-making by DFID suppliers.