Press Releases

HISTORIC PRESS RELEASE : Government Assured Lowest Prices in New Price Pledge – Andrew Smith [November 2001]

The press release issued by HM Treasury on 15 November 2001.

A new price pledge from suppliers assuring civil departments the best price when placing orders for goods and services, such as light bulbs, CCTV and photocopying services, through a government catalogue was unveiled today by Andrew Smith, Chief Secretary to the Treasury.

The price pledge represents a contractual promise from suppliers to government using the Office of Government Commerce portfolio catalogue to match the best price offered to any civil central government department. This will deliver

  •  a contractual condition agreed with suppliers to sell to the public sector at the lowest price;
  • benefits to the taxpayer  from the lowest price in the market-place;

Speaking about the new price pledge Andrew Smith, Chief Secretary to the Treasury said:

“The introduction of this price pledge shows the scope that a focussed approach to procurement can have in making full use of the public sector’s   buying power.  This is promoting the public sector’s efforts to become one of the smartest customers in the market place and to bring about  best value for money for the taxpayer.”

Peter Gershon, Chief Executive of the Office of Government Commerce, welcomed the work of its trading fund, in developing this framework.  He said:

“The pursuit of best practice and a more strategic approach to procurement across government is clearly generating results. Attitudes to procurement are changing. This is another successful step in OGC’s agenda to raise the profile of procurement.  This new clause follows best retail and commercial practice.”

Types of goods and services purchased by government departments under this framework include :

  •  furniture
  •  stationery
  •  desk lights
  •  refrigerators and freezers
  •  waste disposal equipment
  •  temperature monitoring equipment
  •  catering equipment
  •  building materials
  • engineering and industrial tools
  • energy metering and monitoring
  • water and waste management
  • sanitary ware
  • carpets and curtains
  • dishwashers

Under the framework will negotiate the terms and conditions, including best price, with a supplier and enter into a contract with them.  If at a later date the supplier chooses to sell to other public sector customers at a lower price, under equivalent conditions, then the Price Pledge clause will take effect.  This will ensure that future customers can buy goods and services from that supplier at the lower price.

This new clause applies to the OGC portfolio contracts covering a wide range of goods and services from paper clips to furniture. Over £117 million per annum is spent through Portfolio.

All contracts agreed between and new supplier companies will now include the Price Pledge clause as a requirement. Many of existing suppliers have already agreed to incorporate the Price Pledge clause as a supplementary condition from 1 October.  It is expected that by March 2002 all suppliers will endorse the price pledge.