3.22 At the end of 2010, the Minister for the Cabinet Office announced a 'Lean Review' to uncover wasteful practices and unnecessary complexity in the procurement process and to suggest actions to rectify them. The Lean Review found that significant savings could be made in time and cost by working in a more efficient and effective way.
3.23 The Government's new Lean Sourcing process was then launched to provide a standardised and efficient approach to running procurements across central government. To enable PF2 projects to follow the Lean Sourcing process, the government will publish an amended version of the Lean Sourcing guidance for PF2 projects that reflects the complexity of these transactions and the additional procurement steps often required.
3.24 The Government's Lean Sourcing process advocates many of the changes the private sector called for during the call for evidence for PFI reform, such as improved pre-procurement preparation, greater market testing and a shorter dialogue period.
3.25 The Department for Transport are currently successfully using the Government's Lean Sourcing approach in procuring a new Search and Rescue Helicopter service for the UK (see Box 3.D for further details). While this is not a PFI project, the Search and Rescue Helicopter is an example of applying the Lean Sourcing principles to a complex privately financed project.
Box 3.D: Case Study - Search and Rescue Helicopters Lean Sourcing The Department for Transport is currently procuring a new Search and Rescue Helicopter service for the UK (UKSARH) as a civilian service to replace the existing service which had largely been provided by the Ministry of Defence. The 16 month procurement using Lean Procurement principles and processes is for a contract of approximately 10 years and a cost ceiling of around £3bn. The project is on target to let the contract in March 2013. • Extensive early market engagement was used pre-OJEU publication to help establish key factors including the structure of the deal; the length of the contract; the location of the bases and to assist in identifying the minimum technical requirements. • The procurement strategy adopted was competitive dialogue (endorsed by the Cabinet Office) using a five phase process. • The programme included a seven week boot camp of intensive dialogue using Cabinet Office Lean Procurement principles. It centred physically on a hub room, bidder's information room and dialogue rooms for three dialogue streams (commercial, technical and financial) running in parallel sessions. • Extensive planning was the key to delivering the process to programme. This included ensuring that team members signed off their dialogue strategy with the Senior Responsible Owner. • Real time IT connections greatly assisted communications both internally and externally. • The project included in its specification sections on supporting SMEs and the Growth Agenda. |