Leadership: How UK governments nurture their suppliers through uncertainty

Ohio sent out a rushed email asking vendors to volunteer a 15% cut. Ohio should have taken a moment to read the UK’s well thought-out Procurement Policy Note empowering public buyers to support suppliers and transition with them to the post Covid-19 new normal.

Last week I reported on the Ohio Department of Administrative Services poor attempt to bully its 1,400 vendors into a 15% cut on their contracts. I argued that this was an ethically questionable, legally risky and fiscally poor course of action and proposed that instead of demanding cuts, Ohio should have engaged in a dialogue built on empathy.

A policy treasure hidden behind a so-so title…

Like so many other times, a better course of action was already in the public domain. The UK Government published PPN 04/20 entitled “Procurement Policy Note — Recovery and Transition from COVID-19” to follow up on a earlier note that laid out how government procurement staff can maintain cashflow with vendors who struggle with Covid-19. The idea was simple: encourage contract managers to spot struggling vendors, process payments quickly, even pay upfront if that helps a vendor. The business goal was also clear: to keep the supply chain on which government depends alive and extend other business support crisis measures to governments business relationships.

Ohio, see how buyers in the UK starts by looking after their supply chain, instead of threatening them?

But the Government also took a step further, looking into how to migrate their supply chain out of recovery. In a nutshell, what it says is this: think carefully how you move out of this supportive crisis regime. First, keep looking out for suppliers in need. Just because you checked once doesn’t mean that their circumstances haven’t changed. Second, look at whether post Covid-19 your needs have changed and if that is the case, work together with the supplier to plan what is needed. If you come to the conclusion that you need to terminate the contract, that is ok.

Excerpt from PPN 04/20

Treat others like you want to be treated

The UK government is not giving its staff carte blanche to throw money at vendors here. Instead, it is treating the nation’s contract managers as professionals who can make sound judgement about their government’s needs and the needs of their vendors. This is completely logical, public procurement is all about nurturing good working relationships.

PPN 04/20 tells public contract managers not to err on the side of caution, but to act decisively and reconcile differences later. This makes all the sense in the world since it also reflects the imbalance of power in favor of government: it has all kinds of means of auditing and enforcement at its disposal.

Trust is not simply a feeling, but a practice. PPN 04/20 demands transparency. Suppliers who receive support use open book accounting. They cannot make profits on upfront payments and must demonstrate that staff and sub-contractors are paid fully and quickly. It is required that a comprehensive record is kept of decisions and reasoning for future scrutiny.

The core deliverable of this guideline is a Transition Plan, agreed upon by buyer and provider and covering reconciling accounts as well as assessing whether services are needed or need rejigging in a new normal. This provides an exceptional opportunity to not just cut costs, but improve public services.




Governments are facing a new budget crisis that will result in cuts to public services. If not done right, we risk increasing the pain on our most vulnerable communities already suffering from socio-economic hardship.

Recommended from Medium

ModeFeaturedCarel will soon turn 70: a look back at its history French shoemaker Carel is about to…

3-step plan for digitally enabling your B2B Sales

Uncovering the Principal-Agent Problem — and how to de-risk it

Those Easy to Lose Car Keys

9 Things to Know Before Starting a Laundry Service

Supporting the next generation of refugee entrepreneurs

The Tragicomedy of Cashout Leakage

Top 5 Service trends in Restaurant Businesses

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Sascha Haselmayer

Sascha Haselmayer

Passionate about social + city innovation, delightful procurement, connecting social entrepreneurs and governments. Fellow @ New America | Founder/CEO Citymart

More from Medium

Data Science and Racial Bias

Publishing Citizen Science data on disease vectors

The Marvelous World of Mrs. Maisel

Health data for climate research: opportunities from longitudinal population studies

A black and white photo of an older woman’s face, half covered with clouds.