How does the National Procurement Policy Statement (NPPS) affect suppliers?

The National Procurement Policy Statement (NPPS) outlines the strategic considerations the UK public sector must make when purchasing goods, works or services.

As a supplier, you can align your bid strategies with the priorities within the NPPS, helping you to showcase your value to the public sector and increase your chances of tendering success.

Priorities identified within the NPPS, and what they mean for suppliers

The NPPS applies to a wide range of public sector bodies – including central government departments, executive agencies, non-departmental public bodies, and local authorities – and establishes several strategic priorities.

Contracting authorities must ensure that every procurement delivers optimal value by striking an effective balance between effectiveness, efficiency, and economy over the lifecycle of a product, service, or project. This approach not only targets high-quality outcomes but also incorporates broader socio-economic and environmental impacts to avoid waste associated with substandard solutions.

Recommended resources:

• How buyers score your bids: a guide to tender evaluation criteria.
• Pricing strategies to win tenders: an overview of pricing options for your services
• Objectives of the Procurement Act: an overview of the objectives behind all procurement priorities.

1. Driving Economic Growth

Contracting authorities are encouraged to stimulate economic growth and strengthen local supply chains, with the aims of:

• Maximising Opportunities for SMEs and VCSE
  Increasing procurement spend with small and medium-sized enterprises (SMEs) and voluntary, community, and social enterprises (VCSEs) by reducing participation barriers, in line with the accessibility requirements of the Procurement Act.
• Delivering Quality Employment
  Ensuring the suppliers the public sector works with benefit the UK and create fairer outcomes for all, by providing high-quality jobs, safe working conditions, fair wages, opportunities for career advancement, no improper use of zero-hour contracts, and non use of fire and re-hire policies.
• Fostering Innovation
  Cultivating a “pro-innovation mindset” by defining challenges rather than prescribing rigid solutions, and engaging with suppliers earlier to explore novel products and services. This approach could create a culture where Variant Tenders are more widely welcomed and encouraged. Alternative offers were historically disregarded, however, Central Buyers now have wider obligations to seek, consider, and work with Suppliers offering novel and innovative solutions.

How suppliers can align

• Demonstrate a proactive business commitment to economic growth, by providing explicit details of how awarding work to your business will benefit the UK and the communities in which you operate.
• Ensure you highlight employee benefits (e.g., fair pay, healthcare options, training) and quantify the significance of these benefits. Support with internal statistics relating to staff promotions and retention.
• Adopt responsible subcontracting policies, ensuring the standards and commitments held by your company are represented within your supply chain. Examples of such standards would be fair working practices, commitments to staff development, and modern slavery protections.

Innovative Procurement Routes

• The Competitive Flexible Procedure
  If variant tenders are allowed, buyers will be less prescriptive with deliverables, allowing you to propose alternative solutions. Buyers can now make minor modifications to specifications and briefs of live opportunities in the event an innovative solution is being presented which requires a minor tweak.
  Buyers also have a range of options available to them (Dialogue, pilot schemes, product demonstrations, etc.) to de-risk the use of innovative solutions, by allowing Buyers to properly understand them before making an award.
• Open Frameworks
  Can provide you with opportunities to provide innovative solutions when they re-open for new suppliers. For example, new industry standards or production processes may not have been available to the buyers when the Framework was created.
  Buyers also have the benefit of keeping overall framework standards up by removing poorly performing suppliers if they fail to re-apply successfully. This has the benefit of limiting competition to competent and reliable suppliers.

2. Delivering social and economic value

Contracting authorities are expected to maximise public benefit and environmental sustainability by:

• Supporting National & Local Priorities
  Secure social and economic benefits which align with national objectives and local/regional growth priorities through collaborative efforts with public, private, and civil society sectors.
• Upholding Ethical Standards
  Ensure suppliers actively address issues such as bribery, corruption, fraud, modern slavery, and human rights violations.
• Minimising Environmental Impact
  Require tangible actions to reduce greenhouse gas emissions, operational waste, and overall environmental impact.
• Ensuring Regulatory Compliance:
  Confirm that suppliers adhere to tax, employment, and other legal obligations while eliminating practices like late invoice payments – which is a particular area of focus for the public sector.

How Suppliers Can Align

• Quantify and document the social value your business creates, supported by case studies or other evidence. You can refer to our on-demand webinar for guidance, or attend one of our regular Social Value in Bidding training courses.
• Develop clear and measurable social value strategies for your overall business activity and the tenders your bid for.
• Formally commit to reducing carbon emissions within the UK by creating a Carbon Reduction Plan, and referencing it within your bids.
• Ensure your Supplier Information on Find a Tender is kept updated with all relevant accreditations and qualifications.
• Expect questions about your subcontractors and supply chains, and be prepared to provide metrics on your invoice payments. You may have to provide details of invoices which were not paid within 30 days, and offer assurances you have rectified these issues.
• Consider aligning with the Fair Payment Code (FPC), which is free and voluntary initiative which supports and recognises businesses for maintaining desirable payment practices..

3. Building commercial capability

Contracting authorities should ensure the right commercial capability and standards are in place, allowing them to efficiently procure and manage contracts by:

• Adopting Best Practices
  Implementing the principles set out in the Government’s Playbook series, ensuring all decisions are anchored in value for money and service quality.
• Benchmarking Capabilities
  Regularly assessing organisational and workforce capability to sufficiently coordinate procurements and manage contracts
• Leveraging Collaborative Agreements
  Utilising collaborative procurement agreements, with adherence to relevant legislation and best practice, to maximise value

How Suppliers Can Align to the NPPS

• Familiarise yourself with the relevant procurement Playbooks, identify the objectives contracting authorities must follow, and position your bids to align with them.
  • Sourcing Playbook
  • Construction Playbook
  • Consultancy Playbook
  • Digital, Data and Technology Playbook
• To help buyers align with whatever benchmarks they have in place, present your bid information in a clear, concise, and unambiguous manner that simplifies the assessment process.