Friday, 2 December 2011

Has the revolution in public procurement had its first skirmish?

It's seems like only a few days ago Maude's revolutionary vision for public procurement was being discussed.  Well to be honest it was only a few days ago, 21 November to be precise.  I questioned the potential impact of the revolution but not the intention.  Nevertheless I was amazed to read Francis Gibb's report in today's Times which implies the outcome of the revolution's first skirmish.

You will recall that Maude announced there would now be early consultation on procurement, that procurements would take 120 days, publishing of forward procurement plans, ...

So it is a surprise that yesterday the Justice Secretary Ken Clarke announced that consultation on a new approach to procuring legal aid (£2bn) has been delayed for two years with implementation now planned for somewhere around summer 2015 - a lot more than 120 days.  So had a forward procurement plan been published to provide 'certainty' it would need to have been ripped up, but when will those contracts appear in a forward procurement plan?  May not be until after the next election!

Allegedly the delay had something to do with concerns expressed by the legal profession over the potential award of contracts on lowest price.  I would like to think that if I was reliant on legal aid the legal team representing me were not the 'lowest bidder'.
Setting that aside, this raises an issue which anyone who has previously engaged in early supplier discussions will recognise.   Before you discuss with the market you need to understand the relative power and have a strategy for moving forward.  Market sounding and early dialogue can become negotiation and needs to be well thought through and managed.

Anyway, the legal profession claim this isn't a delay but a rewrite of the whole approach - I'd like to hear what options had been considered and whether new options have emerged?  Apparently Ken Clarke, in a statement to MPs, said he believes competitive tendering is "likely to be the best way forward to ensure long-term sustainability and value for money", which doesn't suggest an openness to new ideas.

Oh and to make matters worse we then learn that the lawyers have experienced problems getting paid by the Legal Services Commission.  Now if lawyers can't use the might of the Late Payment of Commercial  Debts (Interest) Act 1998, what hope is there for other SMEs who lack that expertise.  Yes, 1998, provided some redress for suppliers that they would be paid in a timely manner or be in a position to charge interest.  Isn't one of the biggest problems facing SMEs as a result of the credit crunch cash flow and access to credit!  Well in my paper  'Public procurement strategy for accelerating the economic recovery' (available on request), way back in 2009, I argued that the UK government could help SMEs if it just paid in 5 days using Purchase Cards or at the very least on time.

I'd like to know how the work is currently awarded - if it's not legal who on earth would take a challenge?  I'd like to know what has been identified as the current approach weaknesses and how the approach will be improved?  I'd like to know the potential savings which delaying the process is going to forego - I assume someone quantified those.

Finally, I'd like the reassurance that those leading the revolution will take on board the lessons from this first skirmish and learn from them.  Is there a wonderful 'lessons learnt log' - now that would be interesting reading!

Gibb, F. 'Lawyers welcome delay over plans to give £2bn legal aid contracts to lowest bidder', The Times, 2 December 2011, p.8.

1 comment:

  1. I was a Commissioner (non-exec effectively) for Legal Services Commission from 2007-10. I resigned. I could tell you some stories...

    What a mess they've got into now, also backtracking from becoming an Agency. IT is the most complex procurmeent problem I've ever seen to be fair.