Greening, social benefits and procurement?

Social benefits clauses have been the subject of much discussion over the past decade but in an interesting development today the UK government is said to have claimed they will award the new Crossrail contract taking into consideration the wider benefits to the UK.

Justine Greening, the Transport Secretary, claims:

"This includes a 'responsible procurement' requirement that means bidders will need to set out how they will provide opportunities for training, apprenticeships and for small and medium-size businesses."

I wonder if this is another case of Greening misinterpreting advice? We considered an earlier faux pas some weeks ago. Is it not the case that a non-UK bidder could deliver and possibly exceed the delivery of social benefits yet the beneficiaries may not be in the UK?  If that is the case Greening could find herself having to eat humble pie, again.

Of course, Greening could find wiggle room by saying that she really meant the procurement itself (Crossrail carriages) will benefit the UK and that earlier delivery, better functionality and lowest whole life costs were really all she intended to take into consideration at the award stage - they are certainly benefits to the UK.  I wonder will she?

Nevertheless, this will be worth watching as it is difficult to see how awarding a contract based on UK specific social benefits are not discriminatory and therefore in breach of the Public Contracts Regulations.

Either way, the contract will provide useful learning for the rest of us.  It would be useful though if

The curious case of the procurement of blue light temporary staff

PSNI are the subject of an investigation on re-hiring former officers as temps. Estimates of spend vary but somewhere between £45m and £60m is reported to have been spent over five years. That's slightly more than the response given to a FoI request in 2009 which stated an estimated value was £5m (per year).  

Three quarters of those hired are former police officers who were recipients of redundancy payments. That's 300 staff. 

You may ask, 'why were they made redundant in the first place - what was the desired outcome?' The redundancies were the result of the Patten Recommendations to transform the former RUC into a new PSNI. Critics could argue that aspiration has not been achieved. Supporters could say there was a need to ensure business continuity and the terrorist threat had not gone away.

In addition, it was a condition of the redundancy scheme that if those made redundant were re-hired as police officers there would be a repayment of the redundancy payments. Was the contract designed to circumnavigate that requirement since the stipulation doesn't apply if those re-engaged are civilians; even, it seems, if they are carrying out broadly similar roles.  Is this what is meant by the private sector taking up the slack from public sector redundancies?

If the intention was to re-engage as civilians, then the investigation needs to go beyond one contract into the whole category.  Up until now no one has mentioned the contract for Outplacement Services.  If you are fortunate enough to be unfamiliar with this service, it is a bit like a JobCentre Plus advisor which is supposed to help those made redundant adjust, and get back into employment. My experience of it was that it was a smoke and mirrors service which should have been paid by results.  But if they were paid by results, I don't think they would exist and a grant to the Samaritans may be better use of public money - I may save that argument for another day.  Nevertheless, how much was that contract worth and was its purpose merely cosmetic if a revolving door would have sufficed?

Now we face an interesting scenario which may resonate with others.  

How does this sit with

Do your procurement systems provide protection for staff?

A news story this week in Northern Ireland was concerned with procurement fraud.  You can read part of the story through the BBC link but in a nutshell it's cash for MOD contracts, £16.2m fraud, and three guilty on 17 counts of corruption.  Sentencing awaits.

Behind the story, I'm told, were some process weaknesses which I have also noticed elsewhere.  I'm not going to waste your time with all the ins and outs, but the key lessons are:

1. Review your processes for receipt of bids (quotations and tenders)
2. Make sure there is a clear separation of duties (procurement staff should not handle the adminstration of receiving bids)
3. Make sure bids reamain unopened until after the latest time for receipt
4. Make sure more than one person is present at the opening
5. Schedule all opened bids
6. Initial each submission against the price
7. Only then pass to procurement staff
8. Procurement check that handover documents.

Obvious enough?  Yes, but I was surpised when I recently suggested the above process  to a public sector organisation that they thought it was OTT. I asked how they would protect their staff against allegations of corruption. I suspect many staff would not relish the prospect of the jail sentence facing those concerned with the MOD contracts.  So, 'do your procurement systems provide protection for staff?'  I hope so.

CBI argues for BIG bonuses for procurement academics

I normally stick to the world of procurement and programme management, but today I have decided to make some comments on John Cridland's (head of the CBI), recent comments, reported in today's Times. In summary the CBI are making suggestions for the next budget.  They are worried about a potential cost to the UK of the backlash against bonuses and restricted immigration.  Cridland argues that leading executives will find the UK unattractive and, in the same breath, overseas academics will not believe they are welcomed.  To quote directly, "If you don't reward success, business can't walk the walk".

Yes, a strange brew of big bonuses and academic motivation!

It would have been interesting if Cridland had also read the Sunday Times feature on Elsevier - a remarkably high performing business baswed on academic publishing.  Elsevier, sells expensive academic journals (including one of my favourites, the Journal of Purchasing and Supply Management) and makes significant profits. Elsevier's supply chain are the host of academics who write papers and peer review others' work.  What most of my readers probably don't appreciate is that Elsevier do not make any payment to either authors or reviewers. There are parallels with the government's Work Programme - if you want to success, consider it an honour to be unpaid. 

What I can't understand is Cridland's disconnect. The UK need high performing academics and business reaps the benefits from their labour. Even those gaining high-performance bonuses are more often than not

Fighting about Indian defence procurement

The world is certainly richer for discussions on Indian defence procurement.  Recently I tweeted a bizarre report from the BBC on significant delays to Indian defence procurement which were likely be the outcome of an unsuccessful challenge over the age of one of the generals.  Separately I questioned how the Eurofighter consortium, of which the UK is a part, could be readmitted to the bidding.

By way of an update, the UK are part of a consortium bidding to build 127 fighter jets.  The bid is worth £7-10bn (reports vary) and if the UK bid isn't successful a thousands of jobs are at stake.  At the start of the month it was reported that the French (Rafale) were the preferred bidder and the UK bid would progress no further.  Cameron wasn't happy, claiming that the Eurofighter bid was lowest, it was unfair that we were out.  Cameron planned to do all in his power to get the Eurofighter bid readmitted to the competition.  I questioned how that could happen and the potential political and procurement implications of the readmission.

Yesterday, it was reported that all is not well with the Indian negotiating team. It appears that two of the senior officials have now gone public stating

"And while they are at it, how about more supportive procurement?"

Today's BBC news carries a story about challenges facing the Vauxhall car plant at Ellesmere Port which  looks under threat a the moment.  When I say 'car plant' I mean it in the losest sense of the word, as the plant is really an assembler of components brought in from various parts of the world.

Nevertheless part of the story fascinated me, namely, that the local Labour MP asked " ... and while we are at it, how about more supportive procurement?"  By this I think he is asking why public sector organisations are not specifying Vauxhall.  He suggests that the local police are no longer using Astra but one of those foreign types.  It would be have been particularly interesting if a photograph of Ellesmere Port carpark demonstrated the employees were 'buying local' and even more interesting if we knew what type of car the MP himself drives.  That would say a lot about perceived value for money.

We seem to be hearing this sort of buy local policy more and more.  How could it work for cars?  Let's be honest, a car has now become more like a commodity with little differentiation, you can easily specify the functionality, m.p.g., etc and do a price comparison and a host of alternative options will be available.  The same would apply in spending public money - define the need and establish what's available.  While I am sympathetic to the workers at Ellesmere Port and their families, I just can't grasp how 'supportive procurement' would be justified, if it means

The united nations of procurement and programme management

Since this is Social Media Week I thought it would be appropriate to say something about the blog readership, say hello and thank you.  So A BIG HELLO AND THANK YOU to the readers in 

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If I have left anyone out, please accept my apologies and let me know through the comment option below.

I hope you continue to find the blog of interest.

Please also feel free to comment on any of the blogs - I would benefit from your views and I'm sure others would too.

If you are interested, you can also follow my microblogs on twitter @DrGordy just by selecting the Twitter option to the right.

Thanks again,

Gordon

Potentially a perfect love match: Northamptonshire's romance with the waste market

Too often procurement features in the news because it is found wanting. Yet I highlighted last week that the GO Awards for Excellence in Public Procurement demonstrate examples of good practice exist.  So it was great to see  BBC coverage of Northamptonshire County Council's seeking ideas from the market on how to address non-recyclable waste.

Why is this story so newsworthy?   What can we learn from Northamptonshire's approach?

1. The council are acknowledging that the market may know better than their own technical staff how to solve problems - the market is a source of innovation to be drawn on but that rarely happens.
2. The approach goes some way to slaying one of the common myths/excuses I frequently hear, namely, you must have a really tight specification which sets out explicitly the 'how and what' bidders have to deliver if you don't do that you will be exposed to challenge. Hopefully, the only challenge to Northamptonshire will be a constructive challenge to the old ways, whereas what I find so often is comfort in 'the old ways'.
3. The approach also suggests a confidence in managing risk.  This strikes me as a council which is risk aware and seeks to manage risk - the greater risk is not listening to the market.

What we now need to do is learn from the Northamptonshire case study as it develops, warts and all.  Hopefully there will be a researcher who has access to the full story and retells that story with academic rigour. Only then can we really learn.

Nevertheless, I congratulate Northamptonshire and look forward to following the story and hope fortune favours the brave.

Sustainable procurement risk

Tell me what would you do if you read this statement in an ITT:

The [organisation] is committed to sustainable procurement and would wish to see tenderers adopt a positive environmental approach.  Information and guidance about how to pursue a more sustainable future is available from [central government portal]1

You could

The perverse outcomes of results based contracts

“That’s another fine mess you’ve got me into”, said Dave to IDS (I suspect) when today’s Daily Mail arrived through the letterbox of No.10.

The headlines suggested it had all gone horribly wrong (again) on the procurement front.  Fresh on the heels of the CX of the UK Student Loans Company promoting tax avoidance, here was a ‘Tsar’ getting an £8.6m dividend through what appears to be promoting contract avoidance.

In a nutshell the story is the lethal mix of:

• A Tsar
• The DWP Work Programme
• The Tsar is paid a dividend from her company
• The company’s only customer is the public sector
• The main customer is the Work Programme
• The company’s delivery performance has been abysmal, namely, 9-24.2% ‘back to work’ as opposed to the target of 30%
• Half the company’s subcontractors are the third sector.

It looks like the main beneficiary in getting 120,000 troubled households into work was the main shareholder of a poor performing contractor. I suggest she would be better as the Tsar of Contract Manipulation. To take Dave’s previous endorsement out of context “… I know we can count on her to help drive this campaign forward”.  It seems to me that

The Hubris Syndrome

I was really impressed with the idea that Dickens' 200th birthday was being celebrated by the Culture Secretary distributing selected copies of Dickens' books to each of the Cabinet members.  I wonder if they will read and learn from them?

However, I would like to build on that notion and have a national vote for 'must read' books which all potential MPs should read.  If elected, they could then give an assurance, when taking their seat, that they have read the 'nations recommended book' and, as part of their maiden speech, explain the lessons they have learn from the book which they will carry with them.  

I'd expect most have already read Machiavelli's  'The Prince' but how many have picked up on the need to surround themselves with good advice, which isn't the same as 'reinforcing advice'.  My recommendation would be David Owen's 'The Hubris Syndrome'.  I constantly find myself suggesting to others that they read it but I have yet to meet anyone who tells me they have.  So why would that be my recommendation?

Return of the iPads

I recently  referred to being asked to produce a business case for iPads. I was astounded that, without any meaningful development of a business case, a self-fulfilling conclusion seemed to have been arrived at that business could no longer be carried out efficiently without this 'must have accessory'. 

Anyway our friends at Apple seemed to have just developed the 'sale of the century'. Now all those procurement and finance people who would advocate the need for a meaningful business case have just been punched in the solar plexus - the House of Commons Administration Committee has apparently now recommended "rapid rollout of suitable mobile table hardware" to all 650 MPs.

It's not that the MPs lack technology to support them in their work; they already have three desktops and two laptops - I suspect also a Blackberry. (I hope someone has asked the question relating to how much slower they travel with all this luggage.  I also hope they have completed an H&S assessment to protect against potential injury.)
Nevertheless,

GO Excellence in Public Procurement Awards 2012/13 winners

The shortlisted entries for Government Opportunities (GO) Excellence in Public Procurement Awards 2012/13 will be publicly announced on 8 February.  But I have decided to break silence and pre-empt the official announcement of winners. Why? Because some things are worth saying, for example:

• Despite the bad press and some ministerial rhetoric, there are exemplary professionals in public procurement;
• There is exemplary practice in public procurement too; exemplary practice which other sectors could benefit from if they want to learn about innovation, cost reduction, stakeholder engagement and sustainability;
• Size doesn't matter - exemplary practice isn't constrained by the monetary value of the contract or the size of the team;
• Professional qualification isn't a constraint, there is some really good practice being delivered by those who are not MCIPS.

If only every public sector procurer made a commitment to match the best, in some way, then we'd all be winners.  Nevertheless, the winners are:

Did the intervention have the desired impact?

Tucked away in this week's Sunday Times were some notes from an interview with Health Secretary, Andrew Lansley.  In the interview he is reported to have said, "An interesting case in point is knee surgery.  The data has now come back demonstrating half of knee surgery doesn't substantially change the outcome for patients: their mobility isn't improved that much, nor their pain."  In other words someone asked the common sense question: 'did the intervention make, as a minimum, the desired impact; was it value for money?' This should also be at the centre of any outcomes based commissioning and procurement.

I'm sure you have been asking

Wiggle room for revisiting public procurement decisions

How much wiggle room is there in public procurement processes?  I was fairly sure that I could have mapped out the key steps of a public procurement process – particularly when you reach one-way valves in the system which prohibit a return.  However, I admitted a few weeks ago I couldn’t grasp how the MoJ had been able to add a home bid into a previously agreed shortlist. 

Today I’m also asking myself, how could that happen?  This time the UK are convinced that they have scope to regain entry, after being excluded, to the bidding process for the Indian government’s procurement of £10bn worth of fighter jets.   France are the now the ‘last man standing’ in the procurement negotiations.

What could possibly have gone wrong that the UK bid isn’t through to the final stage? Although we have yet to hear what the debriefing will reveal, included in the suggestions is