Lack of competition with new GBP 600 million public procurement deal between the U.K. and Amazon may cost taxpayers
By Liesbeth Casier, August 24, 2018
Recently, the Yorkshire Purchasing Organization (YPO) awarded a five-year contract of GBP 600 million to Amazon for the supply of an online one-stop shop for all public agencies in Yorkshire.
This digital marketplace from the retail powerhouse will provide everything from paper to medical supplies for Yorkshire’s education, social and emergency services. These vital public services will be able to purchase everything they need in one place, as opposed to the region’s previously complicated procurement system involving multiple suppliers.
YPO is thinking big about public procurement. Gillian Askew, YPO’s Head of Procurement, has said “good procurement… can be nothing short of transformational,” and I could not agree more. The news of a major purchasing body taking an innovative leap is cause for excitement.
An online one-stop shop is a great opportunity for sustainable procurement, something that typically requires a certain scale. For example, suppliers will sell and produce their goods in environmentally friendly ways if they know there is a demand. In the case of Amazon’s new digital marketplace for Yorkshire, that demand coalesces on the items every public agency in the region purchases. This is known as “bundling demand” and is one strategy for implementing sustainable public procurement, which is exactly what Amazon’s one-stop shop can do.
I deliberately say “can” because it only accomplishes this goal if we ask for environmental or social sustainability standards to be included. We do not know if any such aspects will be considered when Amazon sets up their marketplace, as the tender documents do not mention sustainability.
This missed sustainability opportunity could be remedied throughout the negotiation process. Another concern remains, however: Amazon was the only company to submit a valid expression of interest for the one-stop shop project for the Yorkshire community. Good public procurement is based on open and fair competition because only then can the best available solution be identified and selected.
YPO is moving forward against best practices by only considering Amazon’s bid, ignoring how open and fair competition is a core principle of public procurement. The fact that YPO complied with the procurement rules is no justification for circumventing this crucial principle. Competition in public procurement is essential to identifying innovative solutions that bring value for taxpayers.
It is a jump in the right direction when purchasing bodies experiment with innovative ways to transform public procurement. But awarding a GBP 600 million contract to a multinational company with no specifications on sustainability, and without considering another service provider, means this leap could fall flat on its face. Yorkshire’s communities deserve a better attempt at getting value for money for their taxes.