Government launches £2 billion management consultancy framework

23 April 2018 5 min. read

The Crown Commercial Service has commenced the second tender process to award firms a place on its Management Consultancy Framework. Management Consultancy Framework 2 (MCF2) is projected to be worth over £2 billion, and will pertain to business consultancy services; procurement, supply chain, and commercial consultancy services; complex and transformation consultancy services; and strategic consultancy services.

In a time when intense public scrutiny is being applied to public spending, in the wake of a public sector pay-freeze and a decade of austerity which has all but crippled the NHS, among other keystone services, the British Government finds itself between a rock and a hard place when it comes to its consulting budget. On the one hand, the British state is attempting to complete a colossal change agenda across its departments, as it attempts to modernise its structures, processes and tools, and alleviate acute pressures for policy-makers and implementers, alike. On the other hand, a recent study on NHS spending on consulting services found that the more healthcare trusts spent on advisory services to help streamline the institution, the less efficient they became. The study was indicative of a wider discussion taking place in the public sphere, which has seen many officials call for tighter spending limits on consulting services.

As the Government pushes forward with its agenda for change, which it still asserts it needs external expertise to realise, it launched the new Management Consultancy Framework (MCF), known internally as RM3745, in an attempt to ensure value for money from consultants. The RM3745 MCF will be valid until 2021, and in that time, the Government hopes that it will provide public bodies with swift, efficient and effective access to the right suppliers, who can then deliver value. The Crown Commercial Service (CCS), an executive agency and trading fund of the Cabinet Office of the UK Government, already awarded its seven lots in two bursts last year. In September, its results went live, featuring 22 suppliers of finance consultancies, and 20 providers of audit services, with contracts reportedly worth a total of £690 million.

Government launches £2 billion management consultancy framework

Now, the Government is looking for four more lots. The segments, collectively worth around £2.3 billion, cover strategic consultancy services; complex transformation consultancy services; business consultancy services; and procurement, supply chain, and commercial consultancy services.

The lot dedicated to strategic consultancy services carries an estimated value of £500 million. Strategy consulting is regarded by the majority of consultants as the most 'high-end' and prestigious segment within the professional services industry. The strategy consulting domain focuses on supporting private sector clients with the development of corporate, organisational or functional strategies and helping public sector organisations and institutions with economic policy. According to the CCS, services for this segment are, “likely to be assignments providing high-level strategic advice to permanent secretaries, ministers, and other senior civil [or] public servants.”

The lot for complex and transformation consultancy services has a value of £750 million attached to it, and chosen providers in the lot will provide advisory and delivery services related to programmes or portfolios of work across government which are complex, multi-disciplinary, transformational, and large scale. Operational transformation programmes have rapidly become one of the largest service lines in the consulting industry, in large part due to the prevalence of new technologies, which enable private and public entities to streamline their organisations, and enable better efficiency and value for money in the process. Digital transformation consulting alone is worth over $23 billion globally.

The business consultancy services lot carries the largest projected price-tag, of some £800 million. It is also the broadest lot, which is understandable as it addresses the largest and section of the consulting industry. Often interchangeably referred to as management consulting, it covers between 50%-55% of the total consulting market. Business consulting is defined as “advisory and/or implementation services to the (senior) management of organisations with the aim of improving the effectiveness of their business strategy, organisational performance and operational processes.” Suppliers on this lot will be tasked with providing “a broad range of business consulting services for both advice and delivery”, according to the CCS.

Finally, the lot dedicated to procurement, supply chain, and commercial consultancy services comes with a spending pot of £250 million. Suppliers in this lot will be expected to consult the government on “complex commercial procurement transactions, [and] strategic, operational, and dedicated large-scale deployments”.

Contracts for each of the four lots will be awarded for an initial period of two years, while two optional one-year extensions available will be available for dependable performers. The bidding process will take place up until mid-May 2018, with up to 1,000 suppliers potentially winning a spot on the framework. Along with individual firms, consortia and joint ventures are also entitled to bid for the MCF2 framework. To do so, each consortium or joint venture will need to pick a lead member before submitting.