In our Insight, New Update to the Cabinet Office Outsourcing Playbook: your essential roadmap to the second edition, we flagged the arrival of the second edition of the Cabinet Office's Outsourcing Playbook and updated accompanying guidance notes. This is the second of a series of Insights designed to outline what is new, as well as breakdown some of the existing key policies and reflect on our experience of how these have shaped procurements in practice.

Given the volume of material contained in the Outsourcing Playbook and its accompanying guidance (over 380 pages in total), in this second Insight we provide an outline of the Playbook's structure and remit. We hope that this will be helpful for those less familiar with the Playbook.

What is the Outsourcing Playbook?

The Outsourcing Playbook was originally released in February 2019, following a collaborative cross-departmental and industry review of best practice in outsourcing. It is structured around a typical procurement lifecycle and captures best practice, common pitfalls and key points at each stage of the procurement process. At the core of the Outsourcing Playbook are 11 key policies that all central government departments are expected to follow. The second edition, issued in June 2020, builds on the existing policies and captures further best practice and lessons learnt to support delivery and drive improvement. The second edition also widened the remit of the Playbook - targeting insourcing and mixed service delivery as well as outsourcing.

Who is it aimed at?

The Outsourcing Playbook is targeted at Commercial, Finance, Project Delivery, Policy and any professionals across central government departments who are responsible for the planning and delivery of insourcing and outsourcing projects. However, over the past year, we have seen it prove useful to a wider audience - to include suppliers and those supporting central government in its procurement activities. The second edition of the Playbook introduced a useful new functional matrix, mapping the level of awareness that individuals in each functional group should have against each of the key policies.

Navigating the Outsourcing Playbook

The Outsourcing Playbook is structured around the typical lifecycle of a procurement. It breaks the process down into 5 commercial stages - being (i) preparation and planning, (ii) publication, (iii) selection, (iv) evaluation and award and (v) contract implementation. Within these 5 stages, it is further broken down into 13 individual chapters. Each chapter is topic focused and explores best practice, common pitfalls and the behaviours required. At the end of each chapter, there is a useful summary of key points and further resources. We find the procurement flow diagram found in Figure 1 on pages 6 and 7 of the second edition of the Outsourcing Playbook to be a particularly useful navigation aid.

The 11 key policies

Whilst the 'dos and don'ts' outlined in the 13 chapters are useful, the 11 key policies are at the heart of the Playbook and contain some of its more significant reforms. These are summarised at the front of the Outsourcing Playbook but also found embedded within its 13 chapters - with the bulk (7 out of 11) being in the early preparation and planning stage. Key themes include starting out on the best foot possible with a clear understanding of the market, the service and the whole life cost and taking a more balanced and pragmatic approach to risk. More on this in our next Insight!

The supporting Guidance Notes

Whereas the Outsourcing Playbook looks at what needs to be done, the guidance notes focus on the how. There are 11 guidance notes in total, although these do not follow the same topics as the 11 key policies. The guidance notes cover the following topics:

  • Market management - This provides an overview of market management policy, including guidance on how to monitor market health, conduct market health assessments and develop commercial strategies and contracts to respond to market weaknesses and promote healthy markets. This guidance note has not changed since being published with the first edition.
  • Approvals Processes - This focuses on Project Validation Reviews for complex outsourcing projects. This guidance note has not changed since being published with the first edition of the Playbook.
  • Delivery Model Assessments - This is an updated version of the 'Make or Buy' guidance note from the first edition of the Playbook. This provides more detailed guidance for departments on carrying out a delivery model assessment in order to decide whether to deliver a service in-house, procure from the market or adopt a hybrid solution.
  • Should Cost Modelling - This new guidance note was introduced on the release of the second edition of the Playbook. It provides high-level guidance for departments on 'Should Cost Models', the term used to describe whole-life cost Modelling. The Cabinet Office is due to issue further guidance and tools on Should Cost Modelling in summer 2020.
  • Testing and Piloting Services - This new guidance note was introduced on the release of the second edition of the Playbook. It builds on the use of different testing approaches, including pilots, to improve the success of outsourcing and insourcing projects by providing insight and evidence into what works.
  • Benefits measurement - This sets out the minimum requirements departments must meet when measuring the commercial benefits that will be delivered by outsourcing. This guidance note has not changed since being published with the first edition.
  • Risk Allocation and Pricing Approaches - This provides more detailed guidance for departments when they are considering risk allocation in devising the commercial strategy for any contract or outsourcing initiative. This guidance note consolidates the 'Risk Allocation', 'Payment Mechanism' and 'Data Quality and Transparency' guidance notes from the first edition of the Playbook.
  • Competitive Dialogue and Competitive Negotiation - This provides guidance on conducting dialogue with bidders via the Competitive Dialogue and Competitive Procedure with Negotiation routes, including the use of risk pots, allowable assumptions and risk registers. This guidance note was updated on the release of the second edition of the Playbook.
  • Assessing and monitoring the economic financial standing of suppliers - This advises on how to assess the economic and financial standing of suppliers during a procurement, to mitigate financial risk arising from such assessment and to monitor the ongoing status of suppliers throughout the contract life. This guidance note was updated on the release of the second edition of the Playbook.
  • Bid Evaluation - This provides guidance on ensuring that there is not a bias towards low cost bids at the expense of quality in bid evaluation. This guidance note was updated on the release of the second edition of the Playbook.
  • Resolution planning - This provides guidance on reducing the impact of supplier insolvency through prior access to corporate resolution planning information. This guidance note has not changed since being published with the first edition.

The guidance notes can be found on the same webpage as the Outsourcing Playbook itself or can be accessed through hyperlinks within the Outsourcing Playbook.

Supplier Code of Conduct

Version 2 of the 'Supplier Code of Conduct' was published alongside the first edition of the Outsourcing Playbook, and outlines the standards and behaviours expected from suppliers. It reiterates the government's approach to working with suppliers to deliver better public services.

The code is designed to help suppliers understand the standards and behaviours that are expected of them when working with the Government, and how they can help the government deliver value for money for taxpayers.

Model Services Contract and Guidance

The Model Services Contract contains various provisions which seek to implement or facilitate some of the policies set out in the Outsourcing Playbook, including the increased focus on financial monitoring and insolvency planning - facilitated by greater financial, group and supply chain data.

There has not yet been an update to the Model Services Contract since the release of the second edition of the Outsourcing Playbook, but we understand that a further update is imminent. We anticipate that this may include amendments to capture some of the changes arising from the Playbook's second edition.

The Model Services Contract is also accompanied by a Guidance Note, which was significantly updated last year drawing on the output from the first edition of the Outsourcing Playbook. The Guidance Note includes a 'Model Contracts Selection Guide', which guides commercial teams on which of the Cabinet Office's template contracts is the most appropriate to their procurement.