Getting the best value out of procured services and products often requires a well-considered commercial strategy.
Arke has supported the assessment of potential commercial options for procurement and sustainment of a complex capability based around Commercial (or military) Off-The-Shelf (COTS) technologies. For an organisation such as the MOD (which has complex operations and potentially unique requirements) the best value option may not be obvious. Arke’s advice and analysis has often highlighted the following key considerations where complex and unique requirements exist:
- COTS may not be the answer, a need for flexibility and agility to meet evolving requirements may be better served with a bespoke solution and commercial arrangement
- The ownership of the future upgrade path for COTS products can be outside the influence of the procurer, which can introduce risks to sustaining a capability. Intellectual Property Rights (IPR) can complicate this further
- New ways of centralising software and information provision, through a centralised facility within an organisation, may require divergence from standard off the shelf products
Various approaches to longer term contracting, such as Private Finance Initiatives (PFI), Government Owned Contractor Operated (GOCO), Public Private Partnerships (PPP), Government Owned Government Operated (GOGO), Contract for Availability or Contact for Capability all provide a unique balance of affordability, flexibility, Value for Money and risk.
It is essential to understand the value, but more importantly the feasibility, of each commercial option. This should consider risk ownership and governance issues as well as the ability of the procurement agent to incentivise collaborative behaviour within the supply chain.