Tuesday, 6 March 2012

A national procurement performance management system

I'm sure, like me you were delighted to learn of the successful outcome of negotiations on the failed NHS IT system.  We've discussed this contract many times but today's Times announced that the previously stubborn 'provider' has now backed down and agreed to a renegotiation of the contract.

We're told a team of Cabinet Office and Department of Health heavies exerted pressure on the defaulting contractor but I think most would accept that little would have happened had it not been for the stance taken by The Times in highlighting the debacle.   Why on earth was it necessary for a media campaign to drive the change as opposed to pro-active procurement?

There's now talk of 'getting tough'  on suppliers, but I would caution against such cavalier, bully-boy tactics.  They presuppose sufficient long-term power in the market and that fault is solely with the provider.  They also fly in the face of the espoused 'lean sourcing'.  Let's not forget a badly entered into contract is no justification.

In the background though a new spectre is looming though, Margaret Hodge, a cheer leader for public procurement improvement and chair of the Public Accounts Committee has said "... it becomes even more important that we take a government-wide view of the performance of these contractors".

However, behind all this are other issues:
  1. Had The Times not drawn attention to the non-delivery would the contract have been renegotiated?
  2. Will officials now be more frank and honest in highlighting procurement risks?
  3. Who will take the lead on national procurement performance management, and what will that look like?
  4. How does a national performance management approach sit with localism and local procurement priorities?
Background reading:
Pitel, L., Kennedy, D., and Smyth, C. '£1bn boost for hospitals in 'cowboy' climbdown', The Times, 6 March, p1 and p.14
Pitel, L., Kennedy, D., and Smyth, C. 'British taxpayer isn't a soft touch, contractors told', The Times, 6 March, p.14

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