Contractors could be forced to sign up to a charter to protect their supply chains from unfair practices, under proposed changes in the way the government deals with major suppliers.
The Merlin Standard, developed by the Department for Work and Pensions, is one of a range of policies being considered by the government’s seven crown representatives, the civil servants appointed last week to manage key supplier relationships.
The representatives are tasked with helping 34 large suppliers, including the likes of Carillion and Balfour Beatty, deliver the 20 per cent savings they agreed with the Cabinet Office last year.
DWP commercial director David Smith said in an exclusive interview with H&V News that protecting supply chains was a vital part of his new role as one of the crown representatives.
He said: “We are clear that austerity should not necessarily be passed down the supply chain and it is an area in which the crown representatives will be taking an active interest.
“Under the DWP standard we ask prime providers to sign up to a system that offers protection to their suppliers and that is something we are looking at to see if it could be expanded to other areas.”
The need for protection emerged last year when Serco prompted government criticism for demanding a 2.5 per cent rebate from suppliers after signing its memorandum of understanding.
Meanwhile, the representatives are also tasked with identifying “emerging players” which could be developed to enter “strategic relationships” with the government.
Mr Smith said: “The list of key suppliers will be reviewed and updated.
“Clearly there is a drive from Number 10 that the government should look to engage better with smaller organisations.”
He confirmed this would allow smaller firms to form joint ventures to target larger public sector contracts as the government hopes the increased competition will help improve efficiency.