Monday, 19 March 2012

Maude's procurement speech impediment

Back in November I spent some time reviewing Francis Maude's speech on revolutionising procurement.  My key messages at that time included:
  1. The ideas espoused would not revolutionise how government buys because most of initiatives were far from new but recycled;
  2. Policy makers need to concern themselves less with rhetoric and more with delivery.  Just saying something is going to happen, evidence would suggest doesn't make it happen - embedding in practice is the challenge;
  3. Policy makers need to make greater use of evidence based research, have consistency in definition of key terms, understand existing policy and commitments, and, collect and learn lessons from the past; 
Francis Maude made, what to me was, a follow-up speech at the Procurex Conference on14 March.  It seems sensible to consider what he said.  

Maude describes himself as "the Minister who gets excited about procurement". Whether or not that is a good thing will be judged in the fullness in time.  However, I wonder if his 'excitement' is a barrier. I honestly question whether those advising him are intimidated by his excitement and are being as diligent as they should be in their advice.

It is easy to suggest, as Maude does, there has been a lack of engagement with potential providers in the past.  Maude asserts that "there was no engagement with potential suppliers" and "we have started to transform the way the Government does business". Those assertions are flawed. Early dialogue with the market has been good practice for some time and I recall case study evidence of that leading to significant cost reductions and improved quality back in the 90s.  However, it would avoid embarrassment if someone made Maude aware of the Cabinet Office's own eight principles of good commissioning, published in 2007. The second of the eight principles is concerned with pre-competitive procurement dialogue with the market, while the eighth principle is concerned with post-procurement dialogue to review effectiveness and learn lessons for the future.  So, while it is good that Maude reasserts the legitimacy of early dialogue with the market, what is needed is an understanding of why one of the Cabinet Office's eight principles has not been more widely practiced over the last five years?  We need to know the answer to that question and take corrective steps, otherwise we shouldn't expect to be in a significantly different position in another five years!  Maude was not making a start on early dialogue in March 2012, instead he was implying a lack of progress since 2007.  

Given Maude's excitement about procurement and closer working with the market, it would also be useful if he had emphasised the need for post-procurement dialogue with the market to learn lessons for the future.  For example, I am aware of SMEs who have expressed serious concerns about the government's approach to procuring consultancy - when and how will those SMEs be able to share their experiences of being on 'the dark side'?  
Better procurement is a big part of the efficiency agenda.  It was also considered a central tenet of the efficiency agenda announced by Gershon and the Treasury in 2004. When will we see the outcome evaluation of the Gershon initiatives? When will we hear what worked and what didn't? There is real need to this learning.  Why?  Because the current UK Government's emphasis on procurement within the austerity agenda is phenomenal - indeed the emphasis on procurement is so great it exceeds anything that has been delivered in any other country dealing with either previous or the current financial crises! There is a lot at stake from this trailblazing excitement with procurement.  There is also a need for a reality check on the potential risk register.    

Maude's boast is that he initiated a first cut at who existing suppliers are. This is nothing short of scandalous. A basic sort of the core 'creditors payments' should have provided the answer. Why hasn't Maude found out why the large investment in e-procurement couldn't have delivered that information at the push of a button?  We need to know why existing e-procurement implementation has failed to provide that basic information and to what extent that failure is widespread?  Does no one ask these basic questions?  

I'm sure we can all rest easy knowing that there has been a saving on the IT contract with HMRC. I'd quite like to know if this is the same system which proved to be so ineffective that many are receiving underpayment notices from HMRC?  If that is the case perhaps some of the savings made could be passed to the SMEs to offset the suffering caused by the IT system failures! What possessed Maude to highlight that negotiation as an exemplary? Most procurement professionals would have been reaching for the contract conditions some time ago and claiming damages. 

Previously I have discussed the barriers to SMEs in dealing with public procurement and the Government Purchasing Service in particular.  Peter Smith has separately produced a useful critique of the Government's spend with SMEs - I'll let you read that for yourself by following this embedded link.  I would suggest one clear statement from Maude the requiring three years' accounts is neither relevant nor required would make a greater difference than all the other rhetoric - that's what seems to act as one of the biggest barriers to SMEs in gaining access to public sector business.

Maude also sings the praises of the Contracts Finder website.  Let's remember we've been here before with Suppy2Gov - the system is now closed but you don't have to look to far to find disillusioned supplier experience. I'm sure it will not surprise you that the passion for transparency has not revealed how Contracts Finder has learnt the lessons from Supply2Gov, why?

Maude appears to be against two stage procurement processes with PQQ's.  I have previous highlighted that two stage procurement's can reduce costs to buyers and suppliers.  I'd like to see some robust evidence which justifies Maude's current position. Why has that not been provided?

We also rediscover that a centralised approach to procurement of common goods and services has been introduced.  Did no one mention to Maude the objectives of OGC Buying Solutions and its antecedents?  What lessons have been learnt from that work?

Then we learn that the savings being made are allowing the Government to reinvest in the procurement profession.  Let's remember there had previously been quite a highly regarded procurement training programme delivered by National School for Government.  But as Ken Cole reported previously that is past tense, the NSG are toast!  So we need to understand what good procurement training, with the benefit of hindsight, looks like. Let's not forget that while Maude gets excited about procurement he has also been one of public procurement biggest critics.  Equally while CIPS should be one of procurement's greatest advocates they have not been particularly clear in their defence of public procurement nor indeed ensuring that the syllabus is refreshed quick enough to address current needs.

Maude celebrates a saving of over 70% on a travel contract. Once again we lack the benefit of how this saving has been achieved so that others could learn from it. But I wonder how excited Maude got when he was told that the Government had previously been paying 70% too much in the past.  'Excited'  may be a euphemism!

I find it remarkable that faster procurement is advocated as being the nirvana. Previously I have discussed the pitfalls of rushing procurement of the NHS IT systems and the police mobile technology. I hope practitioners have enough sense and bravery not to set aside good procurement practice for the sake of speedy procurement.

That brings me to the latest wizard wheeze - "there is now a presumption in Whitehall against the use of the clunky and protracted competitive dialogue process which in our view slows things up unnecessarily". Let's be clear that the competitive dialogue procedure is only acceptable for complex procurements, that's how it was and it was never acceptable as the preferred route.  However, previously the preferred UK policy position was that the Restricted Procedure was the procedure of choice, now we find it is the Open Procedure.  I would suggest caution here, good procurement is about identifying the most appropriate procedure and that's what you need good procurement professionals to identify.  Maude hasn't helped that understanding, but instead added to the confusion. Procurement professionals need to be wary of faddism.

I'm sure those in the audience rolled their eyes when Maude discussed poor payment.  Let's remember we've have the Late Payment of Commercial Debts (Interest) Act since 1998.  Clearly this needs to be reviewed to find out why suppliers appear too frightened to make use of their legal rights.

There were included in the speech some truly revolutionary initiatives.  I will hopefully return to the speech in the near future to discuss those, unless one of my blogging colleagues addresses those.

PS and as if by magic, Peter Smith's view of the good ideas available at this link (Thanks Pete).

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