Thursday, 26 July 2012

A plan G for the economy

While yesterday's fall in GDP has taken centre stage in political debate at the moment, it was hardly that big a surprise. The drop in GDP is blamed on a 10% reduction in the construction sector. Yet a fall in construction was predictable as the Olympics projects drew to a close, and there was a failure to make shorter term infrastructure investment. What surprises me though is that we seem to have forgotten that the Olympic investment probably provided an early unintended cushion to the global financial crisis.

Now we have calls for a Plan V, even though Vince Cable, the consummate politician has made it clear he is at one with the Chancellor.  Well let's be honest, who in their right mind would want to take on the economic strategy at the minute - is it not better to be in a position where others argue you would do a better job and you can ride the crest of the popularity wave without being called to account.

However, there is no doubt we are in a bit of a mess and some politically palatable solution is required - so, for what it's worth, here are ten suggestions for a Plan G:

Monday, 23 July 2012

The Fifth Witness (Book review)

Straying from my usual territory with this book from the Fiction shelves as I’m on holiday.  A big book which I found difficult to set down and sped through.  I was quickly drawn into the plot based on the impact of the financial crash on individuals.  The whole book is on the ‘Lincoln Lawyer’s’ defence of a murder case. Along the way Facebook is weaved in with an implied warning of how sharing may be high-risk.   Although early on I was convinced the plot was a bit too obvious, it wasn’t long before I realised how wrong I was, indeed I was completely wrong.  Even the twists of the final chapters threw me and I actually re-read a few pages to be sure.  Great holiday reading, and although contracts are mentioned you can safely escape procurement for a few days.  

Thursday, 19 July 2012

End This Depression Now! (Book review)

I suspect some of my regular readers may wonder what sort of person takes a book on holiday with this title and then recommends it.

This book, by Paul Krugman, is not about a psychological condition but about the current economic condition – Paul Krugman being a heavyweight economist who is able to clearly explain the current euro crisis and the financial woes facing most western economies.

Krugman’s core argument is that there is plenty of evidence that current economic policies are hostage to a political philosophy as opposed to being shaped economic ‘know how’.  Current economic policies are not working, even though a shift could bring a speedy end to the misery being experienced by so many. The shift advocated is a U-turn on austerity and speedy public spending.

It may be difficult for politicians to make yet another U-turn but I think it is a debate worth having and, if that switch takes place, it could have a big impact on procurement policy.  Of course public spending options go beyond procurement and could be through increased spending on benefits, etc.

Monday, 16 July 2012

Suggested questions for the Home Affairs Emergency Select Committee on 17 July 12

The security contract for the Olympics provides a unique opportunity to learn lessons for the future.  Not only for future major events but security and stewarding contracts in general, whether public or private sector let.

While I am full of admiration for the scrutiny of the Select Committees, although in the past I have suggested their Inquiries could have been perhaps been more forensic.   So, I’ve taken the liberty of suggesting questions which the Inquiry should ask in the hope they may help us all learn for the future.  Of course these questions could also asked by others concerned with procuring security and events stewarding, so here goes:

Wednesday, 11 July 2012

G4S an alternative view: Should you be feeling insecure during the Olympics?

The Olympics is just one enormous procurement case study waiting to be written up - I wish I had the time and also a financier.

I've discussed before the problems of manned security for the Olympics. The whole saga relates to 'back of an envelop' estimates of demand, and a provider who appears to have over-promised.  I'm not going to repeat what you can read elsewhere but in a nutshell, to get round the problem extra cash has been found, troops are being called in to fill the suppliers shortfall  and volunteers used, while G4S, the contractor, hastily leafs through its 'little black book' with a view to finding recently retired police officers who may be able to stand in.  Of course that's only part of a bigger problem as there are displays of public disorder and rebellion at the Border Controls and there's an additional need for police support there too over the Olympics!   It would be easy to draw out lessons from all of this but perhaps premature.

No, I want to provide a few words of caution to all my procurement mates who have responsibility for manned security - a health warning.

Tuesday, 10 July 2012

Does procurement as a shared service add up?

Back in 2008 I had a paper published on Procurement as a shared service (let me know if you want a copy).  That paper examined case study evidence from six local government procurement shared services (14 councils);  it concluded that delivering procurement through a shared service did add up.  The case studies included the financial savings reported. Savings that went beyond those which could have been achieved through other routes, including the use of consortia.  It also highlighted some of my concerns, for example, none of the case study shared services had developed a joint procurement strategy, the need to develop trust slowly and incrementally, and the need to consider what happens when the political objectives of the partners diverge.  Nevertheless, I remained convinced that delivering procurement as a shared service does make sense as one option to be explored, and, when it when the circumstances are appropriate, implemented.

So it was with some interest I discovered that the Public Accounts Committee concluded Whitehall's approach to shared services didn't add up, and that's despite originally being advocated by the Gershon Review back in 2004. But let's remember that Gershon's argument was based on securing access to scarce procurement expertise.

The PAC report however appears to be using the same language but means something different.  Shared services in PACs view is a shared service centre - that certainly wasn't what I found in my local government research.  What I'd found was

Thursday, 5 July 2012

When I'm cleaning windows

You couldn't help but be impressed by the design and engineering accomplishment of London's latest landmark, the Shard.  It is western Europe's tallest building, a mere 87 floors at a cost £1.5bn.

Without doubt its top floor public viewing gallery will become a must visit location.  That assumes however that the windows are kept sufficiently clean for you to enjoy the view.

I was reminded of the Scottish Parliament shock when the penny dropped that cleaning the windows of their new building would cost significantly more due to the awkward shape, intricate design, irregularly shaped bomb-proofed widows and sweeping skylights. One of my favourite case studies on whole life costs.

The award of the Shard's window cleaning contract has yet to be announced but it is interesting to speculate on the procurement approach.

  • How many potential providers are in the market?
  • What will the buyer and suppliers risk assessments would look like? 
  • Will inputs (such as frequency of cleaning) be the basis of the specification or outcomes (such as 'no visible bird poo')? 
  • What sort of previous experience would be appropriate?
  • What type of insurance cover would be required?
  • Will respecting tenants and hotel residents privacy be a factor? 
  • Will providers need a head for heights?
  • What would be an appropriate mix of cost/quality?
  • Will the award be transparent (sorry just couldn't resist)
  • ...     

Of course this is a private sector venture, freed from the constraints of public procurement - let's look forward to what we can learn from this procurement.

Background reading:
Hipwell, D. (2012) 'Only one Shard ... but so many windows'. The Times, 5 July, p.3. 
Nutt, K. (2006) 'Row over Holyrood's £28,000 window cleaning bill', The Sunday Times, 9 April.

Sunday, 1 July 2012

Lessons on eVoting procurement, TAC and failure costs

The long running procurement fiasco of the Irish eVoting machines finally looks as if it has reached an inevitable unhappy conclusion.

By way of background, the Irish government spent €52m on 7,500 machines for eVoting then discovered it could be hacked into.   So 'the kit' has been sitting on the shelves  at a cost of €140k per year - not a great story when you think that the Irish haven't been short of elections, including whether or not to go with austerity measures.

But sitting on shelves wasn't straight forward either. The shed where some (255) of the voting machines were stored became the subject of a planning dispute as no planning approval had been gained for storage in the shed.  The shed in question had been leased for 25 years to store machines which only have a life span of 20 years - so  five years of storage beyond what you would have thought would have been required. The cost of storing those 255 machines therefore had a cost of over €500k.  As if that wasn't bad enough that contract smacked of nepotism.

Of course the public just can't be expected to know how to eVote so an awareness campaign was required.  Two ex-civil servants were contracted to deliver that campaign - they in turn were deemed entitled to €2m of their €5m contract for their costs away back in 2004,

The saga now looks like reaching an end. To the surprise of some, who thought the government would have to pay for their disposal, a tendering exercise has found someone to purchase the machines for €70k.  For the €70k they also get the privilege of also disposing the wasted 1,232 transport trolleys and the 2,142 hand trolleys - 22,387 items of scrap.  You don't have to be a maths whizz to see that there's a shortfall of the in  this procurement.

Lessons for the future worth considering may be:
  1. Pilot before a complete procurement;
  2. Consider renting if you're piloting;
  3. Share risk with the provider;
  4. Place the obligation with the provider for making sure the devices are secure and fit for purpose;
  5. Be squeaky clean and declare any potential conflict of interest;
  6. Don't contract for awareness raising campaigns until you know you need it;
  7. ...
We've discussed stupid sourcing in the past.  This looks like a real contender - let's put it to an e-vote!

Background reading:
Sunday Times, News Review of the Week, 'Top Stories from the UK and Ireland', 1 July 2012, p.8.