Commercial Pipeline Supporting the Implementation of the Government Commercial Operating Standards

February 2018

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Commercial Pipeline – Government Commercial Operating

Standards

Contents

Introduction 2

Definition of a Commercial Pipeline 3

Purpose of a Commercial Pipeline 4

Requirements for a Pipeline 5

Box 1: Government Commercial Operating Standards, Iteration ii (October 2016) 5

Why a ‘Minimum Viable Product’ 7

Box 2: Minimum Viable Product Definitions 7

Supplementary Definitions 10

Contacts 12

Commercial Pipeline – Government Commercial Operating

Standards

Introduction

Foreword by Gareth Rhys Williams, Government Chief Commercial Officer

The Commercial Pipeline is a forward look of potential commercial activity within a

Department. By developing and maintaining a Commercial Pipeline, a Department will gain

greater and earlier insights on the challenges and requirements of its planned activities as

it engages with the respective markets.

The ability for a Department to manage its demand from various stakeholders will also

allow Commercial to plan how it resources the various activities for the greatest possible

success.

This guidance is underpinned by Standard 2 ‘Pipeline and Planning’ of the Government

Commercial Operating Standards. It enables the practical adoption of Standard 2 in

creating and maintaining a comprehensive Commercial Pipeline.

I look forward to working with Departments as they apply the standards in the creation of

their respective pipelines and in increasing the commercial capability resulting from

sharing best practice developed across the function in this area.

Commercial Pipeline – Government Commercial Operating

Standards

Definition of a Commercial Pipeline

A commercial pipeline is a forward look of potential commercial activity for an

organisation. It is a live tool, updated regularly, providing a list of prospective commercial

activities planned by a Contracting Authority over a defined period and over a designated

transactional spend level. It includes all future activity even if funding hasn’t been

secured.

You should consider how your commercial pipeline links with your digital and technology

pipeline. The two pipelines will function differently as the commercial pipeline consists of

commercial transactions, while the digital/technology pipeline includes other

project/programme spend including civil service resource.

Commercial Pipeline – Government Commercial Operating

Standards

Purpose of a Commercial Pipeline

A commercial pipeline will enable a Department to forward plan and map out clearly the

expected future commercial activity (new contract or major contract change or extension)

that it is likely to require. The pipeline can be used alongside other information on internal

business planning and governance stages, and other related activities. By mapping out this

management information and keeping this regularly refreshed, organisations can:

● Give sufficient planning time for developing and executing a robust commercial

strategy, ensuring that all business and commercial options have been thoroughly

explored.

● Make the market aware of future opportunities, ensuring a competitive market exists.

● Outline when the required services are intended to be procured

● Track commercial delivery.

● Give clear management information to inform current and future resourcing for

commercial delivery.

● Reduce the need for unwarranted contract extensions by improved planning.

● Ensure transparency when going to market.

Ownership and maintenance of a comprehensive pipeline for the purpose stated above

forms part of how Departments should approach adherence to Standard 2, metric 2.2 of

the Government Commercial Operating Standards.

Commercial Pipeline – Government Commercial Operating

Standards

Requirements for a Pipeline

To adhere to good practise in creating and maintaining a Commercial Pipeline, the

following criteria apply:

Criterion 1: The Pipeline should seek to align with the Minimum Viable Product (MVP).

The MVP is the minimum information about a potential commercial activity which must be

identified, documented and maintained. The MVP provides a framework to assist

organisations to build their pipeline to a good standard. The pipeline should, as a

minimum, correspond with the Minimum Viable Product as set out in Box 2 (below).

Criterion 2: The Pipeline should be at least an 18 month forward look of commercial

activity on a transactional level, though organisations that are starting the process of

creating and using pipeline information may build towards meeting the MVP.

Criterion 3: The Pipeline should be a live tool, updated at each major change or at least

every 6 months. Departments may choose to arrange for formal update cycles to be more

frequent (e.g. monthly, quarterly) based on business need. This does not prevent

information on the pipeline being amended as status and major changes occur.

Box 1: Government Commercial Operating Standards,

Iteration ii (October 2016)

Standard 2. PIPELINE AND PLANNING

Government will prepare and retain a comprehensive view of current and future

contracts and commercial activity through a commercial pipeline, refreshed every 6

months (with major changes updated as they happen), and plan commercial activity in

good time.

Commercial Pipeline – Government Commercial Operating

Standards

Metric 2.2. Creating a comprehensive commercial pipeline (minimum of 18

months) of contracts that are high risk or complex.

GOOD: Departments regularly review their comprehensive commercial pipeline with

high risk or complex transactions. The Board is confident that the organisation has a full

view of its upcoming relevant commercial events.

BETTER: The department has in place resources and processes that enable unforeseen

or new commercial activity, that is additional to that already on the pipeline, to adopt

appropriate commercial strategies in line with its approach to pipeline and planning.

BEST: The department has planned and created or has available sourcing routes that

enable unforeseen or new commercial activity, that is additional to that already on the

pipeline, to be sourced in line with value for money considerations for that service.

Commercial Pipeline – Government Commercial Operating

Standards

Why a ‘Minimum Viable Product’

To support Departments to move towards the effective use of a pipeline to inform

commercial delivery, and to establish consistency across Government, the Government

Commercial Function has outlined a “minimum viable product” (MVP). This approach,

with an MVP, helps both those Departments who are using pipelines to inform and track

commercial delivery and those who are seeking to institute the use of an MVP pipeline.

Departments should adapt the MVP and use it in a way can influence how their

organisation operates. For example, creating system led (e.g. IT systems) or organisational

ways of working (e.g. standard management processes) to both create pipeline information

and keep it up to date. The MVP (see Box 2) is designed to be owned by a Department.

Local terms that are equivalent to those outlined in the MVP can be used. Additions to the

pipeline information may be included where they suit how your organisation operates (e.g.

Framework, Triage Proposal, Contract Risk, suitability for SMEs etc).

The use of the MVP approach to pipelines is a guideline for best practice. However,

Departments who strive to meet the Government Commercial Operating Standards (see

above) will likely achieve the MVP over time.

Box 2: Minimum Viable Product Definitions

No. Field Definitions

1 Reference number The unique Department reference number which a

department will allocate to any commercial activity noted on

the pipeline.

2 Business Area The business area/organisation owner for this contract.

3 Short Description A short contextual entry on the commercial activity. This

should reference how the activity delivers a department's

strategy and what is being procured. Please reference the

overarching programme when relevant.

Commercial Pipeline – Government Commercial Operating

Standards

4 Contract Title The planned or published commercial activity name.

5 Commercial Strategy The commercial strategy or approach for the commercial

activity. Potential options include: 1. New requirement, 2.

Re-procurement (same scope), 3. Re-procurement (different

scope), 4. Extension. See below for definitions of these

options (Supplementary Definitions a-d)

6 Existing Contract end

date

The end date of the existing contract, i.e. the first date that

the contract needs replacing by. If this is a new requirement,

please enter N/A.

7 Next Business Case

Stage*

The next approval point of the business case.

8 Planned date for next

business case stage

The planned date for the next business case stage (field 7).

9 Procurement start

date

The planned date of official commencement of the

procurement e.g. release of OJEU or commencement of a

further competition under a framework agreement.

10 Contract

Commencement Date

The start date of the new commercial activity.

11 New Contract end

date (excluding

options)

The end date of the new contract. This excludes options (e.g.

options for extension).

12 Value of new contract

(excluding options)

The £ value of the new contract. This excludes any value

associated with options for extension.

13 Procurement Sourcing

Route

The procurement vehicle being used to source the contract.

Options include Framework, OJEU, below OJEU and Dynamic

Purchasing Systems. Please see below for definitions of

these options (Supplementary Definitions e-h)

Commercial Pipeline – Government Commercial Operating

Standards

14 Level of Competition The level of competition associated with the procurement.

Options include: Competed, Mini competition, Single Source

and Direct Award. Please see below for definitions of these

options (Supplementary Definitions i-l)

15 Spend category The procurement classification which is attributed to the

commercial activity. This can be from any system your

Department uses as a standard practice, including CAS, CPV,

UNSPSC.

16 Contract Tiering The tier of the commercial activity i.e. the level of

importance of the contract in achieving Department

objectives, as per Department preference (Tier 1,2,3 | Gold,

Silver, Bronze etc).

17 Existing Supplier The current supplier of the service, if applicable.

18 Main Contact The name and contact details of the single point of contact.

*See here for Green Book definitions of Business Case stages

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/469317/gr

een_book_guidance_public_sector_business_cases_2015_update.pdf

Commercial Pipeline – Government Commercial Operating

Standards

Supplementary Definitions

Ref Field Description

a New Requirement

This is where there is a new requirement and this has not been

procured in the past.

b

Re-procurement

(same scope)

The re-procurement of a good or service with the same scope to

the current contract.

c

Re-procurement

(different scope)

The re-procurement of a good or service but with a different

scope to the current contract.

d Extension

The current contract is being extended and has provision to do

so (note if no provision exists and the intention is to negotiate or

adopt previous terms with a supplier, this should be considered a

"direct award".

e Framework This is a contract which is being procured via a framework.

f OJEU This is a contract whose value is above current OJEU thresholds.

g Below OJEU

This is a contract whose value fall below OJEU and/or which were

not procured via a framework.

h

Dynamic Purchasing

System

This is a public sector sourcing tool for services and goods. It is

similar to an electronic framework, but new suppliers can join at

any time.

i Competed

This is where there has been open and transparent market

competition to procure.

Commercial Pipeline – Government Commercial Operating

Standards

j Mini Competition

This is a closed / limited competition, to all suppliers capable of

meeting your requirements, or a mini competition as a means of

making a call-off for a multi-supplier framework agreement.

k Single Source

This is where there is only one supplier in the market which is

able to supply this good or service, therefore, further

competition is not possible.

l Direct Award

This is where the contract has been awarded directly to a

supplier without competition.

Commercial Pipeline – Government Commercial Operating

Standards

Contacts

Enquiries about this document should be directed to the Commercial Continuous

Improvement Team at CCI@cabinetoffice.gov.uk