The cost of spending an Irish penny

Yesterday I discussed the case of the missing artworks from Leinster House. Today, provides another opportunity to discuss the big issues of Irish procurement, 'how much should it cost to spend a penny in Ennis?'.

This first caught my attention when I read a piece in the hard copy of the Sunday Independent "Two public toilets cost £1.4m a year" - surprisingly I couldn't find a copy of the 'News in Brief' piece online.

However, I gradually began flush out the facts. First, it seems that the report has 'misreported in that it should be £140k as opposed to £1.4m. It can be assumed that had the council made such an error they would have been considered incompetent.

But toilets in Ennis are a serious issue - only a few months ago it was alleged the toilets has become the residence of two homeless persons, one of whom sadly died. Another big issue is the failure to use the toilets and urinating in public - the solution to that is argued to be the appointment of a 'urine warden' and 'naming and shaming' the offenders. I suppose the next stage will be a debate whether or not pictures will be published and, if so, would that represent an infringement of human rights.

However, the toilets in question appear to be 'superloos' with automatic door opening after 20 mins and have alarms fitted, the contractor makes daily inspections.The public pay for the 'convenience' through a 25c fee but that only amounts to a revenue of €3,158 a year against with the contractor paid €70k for each toilet. Only 34 people, on average appear to use the two toilets each day.

The Sunday Independent piece suggested that a councillor wants a renegotiation of the contract but are there other options?

Perhaps:

• Increase the cost of spending a penny from 25c to €1, as already advocated by some;
• Reduce from two toilets to one;
• Close the toilets during the day and insist that those who need to spend a penny do so in local public houses, then only open the toilets during the night;
• Allow members of the public to use toilets in any of the council offices, which I assume have manned security;
• Relocate the toilets to a more 'convenient' place so that usage increases;
• Have the toilets sponsored by local traders;
• As Ireland's only Information Age Town' could mobile apps be used as tools for marketing business which will let members of the public use their 'facilities' and act as a means for drawing those caught short;
• As an Information Age Town ask the public to come up with a solution;

The challenges facing public procurement in Ireland seem to go beyond taking the cents.

A Father Ted moment

I’m sure you remember the Father Ted TV series which featured the lives of some Priests put out of harms way on Craggy Island. Father Ted seemed to have been exiled due to a misunderstanding around church funds ‘resting’ in his bank account.

Well I've been spending a few days in Galway, last night, when looking for a quick meal I experienced unbelievable Irish hospitality. I went to check the menu of one hostelry and was presented with a map for orientating myself round the restaurant and a collection of coupons. My wife and I were then able to experience the various food options available free of charge, I’d pancakes with maple syrup, chicken curry, a turkey dinner with all the trimmings, carrot cake, cupcakes and a few mocktails. I tell you, you couldn’t make it up.  You may recall the catchphrase of Father Ted's housekeeper, Mrs Doyle, “ah, go on, …”.

This morning I then read of the Office of Public Works (OPW) search for 20 artworks in Leinster House (the Irish equivalent of the Houses of Parliament). Apparently a large number went missing after the change of power in the Irish General Election of 2010 but “some of the artworks were listed as unlocated since 2008 and several of these are original prints, which are editioned prints, and they may have been located outside the Leinster House complex”.  The OPW spokesperson continued: “With the last change in government, there was a major turnaround of personnel and office spaces and this resulted in an unprecedented number of artworks being moved and redistributed throughout the Leinster House complex”.  

No one is actually suggesting the missing paints have been stolen; they just appear to be ‘resting’ somewhere they shouldn’t be and whoever they are ‘resting’ with doesn’t seem aware of the strange presence of non-purchased artworks. Perhaps they will join some of those wonderful 'finds in the atic'  in a future Antiques Roadshow or perhaps it just a Father Ted moment and Irish ministers and mandarins misunderstanding Irish hospitality.

HS2 Contingencies

It's six months since I first highlighted concerns with HS2.

In the latest twist it has been announced HS2 may cost £42.6bn as opposed to the original £33bn - let's remember that we're still in the early stages of this project.

But what struck me as strange was George Osborne's interesting explanation of the £14.6bn contingency sum on Sky News:

"... one of the reasons why the cost has gone up is we're actually building in more contingency to make sure that we don't actually overrun. We've got a proper budget from the start that way we know we can afford" (27 June 2013).

If the chancellor is correct and we had a proper budget from the start (or is this the start?), what was the original £33bn?

Is the contingency a slush fund or a contingency fund? A contingency is to cover costs which could not reasonably been foreseen. It isn't intended to cover increases due to changes in specifications, clients intentions, costs of materials, contract omissions, or new regulations.

It would be really useful to understand what this 'contingency' of £14bn is allowed to cover and what it won't? It will also be interesting to understand how it will be managed? Can we now assume the Treasury have said, "the absolute maximum HS2 will cost is £42.6bn"? If that's the case, who will be held accountable for overruns? I suppose another way of looking at it would be, who involved in making these commitments will be around in 2032?

A spending review anomaly for procurement policy

The Spending Review provides an opportunity to gain some insights into public procurement policy, so it is worth looking slightly deeper than the common headlines of cuts, cuts, cuts.

The nugget which I want to highlight is the freedom gained by Arts Council England and the national museums to opt out of government procurement procedures. 

First it is worth reflecting on what I think was the last relevant report on DCMS procurement by the National Audit Office - at that time, (admittedly November 2005) the view was:

"Procurement is an area where the Culture, Media and Sport sector can achieve significant savings and improvements. Whilst the sector has made some progress in improving its procurement capabilities and practices, a great deal more can be done. A greater level of commitment from organisations to adopting good practice, as well as addressing specific issues such as greater collaboration between organisations when buying common goods and services, will result in greater value for money." (Sir John Bourne, 30 November, 2005).

Is the new freedom to opt out of government procurement procedures an acknowledgement that DCMS has so significantly improved procurement that they should be cut loose from the constraints applicable elsewhere in the sector? If that is the case, which I doubt, it would be useful to understand how they have brought about greater collaboration, which just has not been achieved elsewhere in the public sector, for example, the police?

Is the freedom an acknowledgement that existing government procurement procedures are inappropriate? If so, why release one part of the sector rather sort out the procedures for all departments?

Did Arts Council England and the national museums actually ask for this freedom, if so what was the business justification? What precedent has been set and how will it be applied to the next petition for 'opting out'?

What particular areas of government procurement procedures will Arts Council England and the national museums be released from and have those relaxations been risk assessed? Are major construction projects, grants, and commodity goods and services included? Have new procedures been drafted, if so, can we hear what the proposed new procedures are? Will those procedures be 'leaner'?

Assuming government procurement procedures exist to provide value for money, achieve public policy and provide a shield to protect those involved in public procurement from criticism; how will those objectives now been satisfied?

On the heels of so much debate on greater use of 'centralised' contracts, has the so called 'mandating' just been set aside?

Will the independence bring with it reduced costs for what is procured? If yes, then some serious questions need to be asked about the 'centralisation agenda'? If costs increase, how will that be justified? Will a baseline for future comparison even be established and published?

To be truthful, I just can't understand the freedom as it seems to go against the tide - I'd like to have heard the view of Francis Maude, Margaret Hodge and Bernard Jenkin?

A balanced approach to probation outsourcing

I've discussed the outsourcing of the probation service on a number of occasions but today revealed a strange 'spin' which requires re-balance and critique if the best option and approach is to be selected.

We have learnt that "Officials have warned the Justice Secretary", but then that the warning is actually in the form of a risk register. Of course there should be a risk register which identifies risks in as objective a manner as possible, but risks 'might happen', it doesn't mean they 'will happen'. Is it fair refer to inclusion is a risk register as a 'warning'?

Then we learn that a "a criminal justice expert said the Probation's sell-off is being carried out too hastily; there is too much risk. It is highly likely that service delivery will collapse and public protection will be undermined. The Government must think again". Well if you heard that from a 'criminal justice 'expert' you'd assume an objective opinion, but if you were then told that 'expert' had been a trade union representative of the probation service perhaps you'd consider the opinion highly subjective and more than a little biased?

The Times. which report that they have seen the risk register, appear to have been a victim of spin and not managed the risk of being a pawn well.

From a procurement perspective, whether or not we agree with outsourcing, we should applaud comprehensive risk registers, but we should also avoid being too influenced by subjective opinions. Professional procurement requires robust options appraisal and risk management as opposed to scare mongering.

Procurement gamesmanship for non-public bodies

Thankfully the G8 has helped remind us that Belfast is experiencing a peace which many would have thought unattainable. But all is not well on the procurement pitch. A challenge has now been lodged by a bidding partnership who feel left out of the opportunity to bid for the Gaelic Athletic Association's £70m stadium renovation. As yet the basis of the challenge is unclear but it can be assumed it is based on the fact that while the GAA are not a public body, a significant percentage of the funding is coming from the NI Executive which is a public body.

We will watch closely how this develops but it is important to remember that non-public sector CPOs can be caught by public procurement directives if they are spending money provided by the public sector.

Questions which will be worth hearing the answers to include:

1. The basis of the challenge?
2. What will be the basis of the GAA defence?
3. What were the credentials of those who advised the GAA on the procurement approach?
4. Did the challengers object to the GAA regarding the procurement process? If they did, when did they object and what response did they receive?
5. Was the procurement Regulated?
6. If the procurement was not Regulated, what will the basis of challenge? 
7. Did the GAA recognise the procurement as potentially a Regulated procurement?
8. What is the GAA's approach to procurement in general?
9. Did the GAA adhere to their own procurement rules, regardless of whether or not the Regulations apply? 
10. Did the NI Executive, the funders, make the GAA aware that the Regulations would apply? 
11. Did the NI Executive provide any procurement advice/guidance in the procurement process?
12. Did the NI Executive sign-off the procurement approach? if they did, was it adhered to?
13. Was there a duty on the NI Executive to make the GAA aware that the Regulations would apply?
14. Were the challengers unlawfully disqualified from the competition? If so, in what way?
15. If the court rules the challengers were unlawfully disqualified from the process, will they be reintroduced to the process?
16. If the challengers are reintroduced into the process, and they subsequently are successful in winning the contract, what additional benefits for the public purse will have been gained which would otherwise have been lost?
17. If the court rules in favour of the challengers, will the NI Executive carry out its own inquiry into what has gone wrong?
18. If the court rules in favour of the challengers, what will be the cost of the mistake to the public purse?
19. If the court rules in favour of the challengers, will someone in the NI Executive be held accountable?
20. Did LOCOG's procurement approach to the Regulations provide a relevant precedent?

We live and learn, hopefully.

Reinvigorating room service

A few days ago I discussed the lack of clarity in ordering Breakfast in Bed in Hotels. If we are to believe the reports in the press though, room service may well be on the way out due to a fall in popularity and also it not being cost effective for hotels.

 But if you think of the cost you pay to have a takeaway meal delivered to your house by car (in my case it seems to be £2 within a three mile radius), and in parallel the cost of various breakfast inputs at your local shop, how on earth is breakfast in bed so expensive, or put another way how on earth does it not pay? For a start, breakfast still has to be cooked regardless of whether it is delivered to the room. Equally, room service is based on 'cook to order' when the supplier knows hours in advance of the orders which have to be satisfied within specific windows of demand, whereas without room service they have little certainty of quantities to be provided or even when demand will be placed.

If room service isn't paying, is it due to lack of demand? Rather than cut room service, why not cut the price and see if there is a significant increase in demand, the fixed cost has to be the same regardless of whether it is served in the restaurant or in the room.

Another option is to question the recovery cost of the tray charge. One way of looking at that cost is the amount of unproductive time, standing around waiting for the orders. You need some staff to be on standby even to satisfy just one room service request. Again increase the demand and there will be less non-productive time. But here's an idea, why not take some unemployed people and offer them the option of piece-meal work, paying them on the basis of trays delivered and incentivise them to deliver a really great quality service and also proactively promote room service? Why not use this as a route to work?

Then we have the uncertainty associated with 'turn up when you want' breakfasts. Compared to room service you need additional seating and tables. You also need additional staff and have less predictability in demand flows. Am I missing something, or should the strategy for hotels not be to move more to room service as opposed to restaurant service?

The more I think of it, if you want to make room service work, the answer is in reducing the selling price and providing jobs for unemployed low-skilled workers. Make restaurant dining the second choice as opposed to first choice, with the opting out of breakfast in bed.

Oh and while you're at it, think of the difference in the price of my restaurant steak, I could work on the basis that the money saved through ordering of the room service menu at the restaurant, means that for the business customer, buy eight and the saving will nearly cover the price of one night's hotel accommodation - I'm sure buying steak compares favourably with reward points. Strange times!

Small Business Friendly Concordat and institutional memory loss

Isn't it great to hear Chloe Smith has made a commitment to bring about change in central government procurement so that it is easier for SME's, particularly in the construction sector, to gain business.

Not so great that no-one actually briefed Chloe that what was being said had little new. Not so great that Chloe wasn't briefed that much of what was being championed had been committed to in the 2001 'Smaller Supplier ... Better Value? Not so great that Chloe wants local government to follow her example, without having been made aware that many council's have already signed the 2005 Small Business Friendly Concordat.

What we really need Chloe to tell us, isn't the old, old story of commitment to ..., but a new story of accountability for implementation, what's going to change to ensure her commitment is acted upon, and whether the Government are prepared to be measured against this commitment in May 2015 election.

Bring on the Procurement Star Chamber

There's something quite remarkable about the concept of the 'Star Chamber' which seems to have been lost in today's political dumbing down and popularising of the approach - it existed until 1641 to enforce laws against those so powerful that the traditional courts would never act against.

Consider the Opinion piece in today's Times, a great deal of which had already been discussed in this blog in the context of the evidence given to the Public Administration Select Committee inquiry into public procurement. Now it is clear to me that some very lame excuses were given to PASC justifying poor implementation of procurement policy and strategy. After all, if those charged with implementation can't deliver, why on earth did they, or their predecessors, not make it clear when the policies where being drafted that there was neither the readiness to change or the skills necessary to 'make it happen'. The PASC was just too chummy and lacked any real sense of personal accountability - I don't believe for one minute that much will change in the duration of this parliament.

However, I would like to pick up on one aspect of the Opinion piece and suggest a way forward:

Some mandarins are refusing to renegotiate IT and procurement contracts to get a better deal. "It's all about saving face ... they've signed off rubbish contracts and they don't want to admit it".

1. Are the mandarins actually refusing to renegotiate bad contracts?
2. Is there the scope to renegotiate the contracts anyway? Basic contract law reminds us that there is no obligation to enter into only good contracts and if you enter a bad contract, it is still a contract;
3. Is the real constraint face saving?

If we really want to bring the transparency to public procurement and accountability we need to expose and explode these myths if they are not true. But if they are the truth, we need to find a way forward so we are not replaying this discussion in another decade.

There has been a long history of 'the great and the good' of business being asked to provide their opinions on what is wrong with public procurement - it's easy to throw those stones. Yet, in almost thirty years that has delivered little change - that model just doesn't work. However, why don't we just use that type person and deploy them on Procurement Star Chambers. Let the Procurement Star Chamber sit in judgement over the implementation of public procurement policy and strategy, let it be linked, at the very least, to the civil service performance management system too. Let the Star Chamber establish if bad contracts have been entered into, where there is scope for renegotiation, and whether the  reluctance to do so is based on face saving? Bring on the Procurement Star Chamber if you want to get beyond the rhetoric and 'make' change happen.

24 hours to get your communications plan ready

It seems this weekend was a good time to bash public procurement and that the attack will continue on Monday night with Channel 4's Dispatches programme. I make no defence for public money wasted and am ashamed of some of the poor public stewardship exhibited. But the headlines can be misleading, the sound bites are easily digested and create barriers for hearing the truth. But procurement can see the media attention as an opportunity, to do that you need to think about what will be 'heard', how to respond and how to create a constructive platform for moving forward. These few days public procurement bashing can be very healthy and provide a useful opportunity for strategically repositioning procurement, if you want.

So, let's recall, Saturday's public procurement bashing centred around the Taxpayers' Alliance publication of the Bumper Book of Government Waste. The headline figure was £15bn of procurement waste per year. You can read my blog on how I believe the headlines were flawed. To me, if you are in public procurement, you need to have a quick refresh of the content of Towards Tesco, understand the key arguments, set out the pros and cons of your own organisational structure (acknowledge there is no perfect structure), be clear how you can maximise the benefits of collaborative procurement internally and externally, and set out your collaboration strategy.

Monday night's Dispatches programme provides a second bite of the cherry. In anticipation of that you should try to read the Sunday Times procurement bashing articles. Expect a revisit of Sir Philip Green's flawed report - you could read my critique. To me the focus of the bashing will be on pCards - now I've dealt with those before. You should understand the benefits of procurement cards, particularly how they can help local SMEs at the present time with cashflow problems. Also be clear about the transaction cost reductions and, contrary to the bashing, the increased control and visibility they provide. The Dispatches programme here is your ally as it highlights visibility which may not otherwise have been available. Make it clear that pCards were not the problem but inadequate governance, controls and procedures.

The timing of the media procurement bashing is also fortuitous - if the newspaper articles hadn't have been over the weekend, CEOs may not have had time to consider them. Your challenge now is to seize the opportunity and prepare a briefing paper for your CEO so that you can use media procurement bashing as part of your procurement communications strategy.

Taxpayers Alliance procurement assertions are flawed

Today's Times makes great play of The Taxpayers' Alliance, Bumper Book of Government Waste. Not only does public procurement get a bashing on page 4, but also in an Opinion piece from Matthew Sinclair (Chief Executive of the Taxpayer's Alliance) on page 26.

When I read that £15bn a year could be saved through better public procurement naturally I looked for the evidence. That led me to the source being cited as the Institute of Directors. But the Institute of Directors hadn't identified £15bn could be saved, their source was Colin Cram's report, Towards Tesco.

Now I have deliberately stayed clear of the procurement family spat on Towards Tesco, not least because I like and have great respect for those presenting the opposing arguments. However, we have to remember that the Towards Tesco was based on big assumptions too - it also stated there was an absence of reliable data.

I have serious concerns about the pragmatism of the centralisation argument and I'm not even sure if Colin's argument has been correctly interpreted. But we have reached a dangerous stage when a hypothesis presented by Colin, who is clearly committed to public procurement, is being misinterpreted and used by the Taxpayers' Alliance. We need to end the rhetoric and move to robust peer reviewed evidence to get to the most likely outcome. In the meantime, perhaps we should take all the other Taxpayers' Alliance assertions with a pinch of salt.

Are we ready for naming, blaming, shaming & taming procurement

What do you think about the Health Secretary's plan to expose health consultants who want to opt out of performance tables?

I'm in favour. In fact I'd go further - I want to understand the outcomes achieved, problems encountered in the operating theatre, proportion of NHS/private work, the proportion of their career spent on my particular area of concern, and, what's more, I want to  have the option of seeing that information on an NHS validated webpage or when I am sitting in my GPs surgery discussing a referral. Why? Well, I have had a number of operations which have had complications in theatre, serious infections, and conflicting opinions. I have also been given, what other consultants convinced me was inappropriate treatment and inappropriate advice. I also want to see the cloak of aloofness removed from the consultant so that they also remember I am the focus of their attention.

While I'm on that rant let me share just one of many bad experiences. I waited quite some time for an appointment to see a consultant. I then waited long after my appointment time to be admitted to his inner sanctum. While I was waiting, of course there were the signs prohibiting the use of mobile phones. I was duly informed I could be seen. No sooner was I in the throne room than his mobile phone rang, he said, "excuse me I have to take this call". Believe it or not the call was from his son and they discussed his performance on the rugby pitch. Not that surprisingly the child had more of the consultants time than I had. Did I feel I'd experienced patient centred care?

Thankfully, I have also experienced absolutely world class care. On at least one occasion having to be reassured they had not mistaken me for a private patient.

Remove the cloak of mystery and I can make informed decisions as to whether or not I trust the consultant. Remove the cloak and I can see beyond the hot air. Remove the cloak and I can opt not to go near the poor performers.

Now if we adopted a similar position in public procurement things might change too. We might learn who is in the wrong job, who doesn't implement procurement policy, whether centralised contracts are justified. Let's forget about massaging the data overload and opacity of contracts let. Just let us know which procurement departments achieve agreed objectives. If they don't use the central contracts, just let them tell us why - we can then make an informed judgement as to whether the 'centralised contracts' are at fault or the procurement leads. If we see enough CPOs saying the contracts aren't used because they aren't fit for purpose, then maybe that is useful for reviewing the strategy. If procurement policy initiatives are not being implemented then maybe we have the wrong CPOs. Are we ready for naming, blaming and shaming in public procurement? Perhaps we're content with the cloak of opacity.

The need for procurement risk management

I've a new debate piece in Public Money and Management which aims to raise awareness of the need to address supply risk management amongst key decision makers. We all recognise that risk has raised the profile of procurement in the media over the last year. Horse meat, supplier credit leading to cashflow problems and business closures, car recalls, and, more recently, the Dhaka factory disaster have placed procurement in less than a favourable light. The public sector also needs to avoid muddling through on procurement risk and develop a more strategic approach. Here's and extract from the paper and my suggestions for those who have decided to become proactive in the strategic management of supply risk.

The first stage should be a clear allocation of responsibility for supply risk management to a named and accountable individual. 

The supply risk owner should be responsible for the completion of an audit. The risk audit will be helped by spend analysis, a comprehensive contracts register and vendor rating. The audit should be then lead to a risk assessment and profiling.  For strategic procurements, regardless of the value, the risk assessment needs to go beyond first tier supply and include a trace to source through the various supply tiers.  

The completion of the risk audit should include key stakeholder input, it is too important to be left to the supply risk owner alone.  Nevertheless, it is unlikely that one person would be able to consider the many facets of supply risk.  Key stakeholders should also be active participants in the development of mitigation plans. 

The risk register needs to be critiqued and sign-off by the Top Team, who in turn agree the level of risk tolerances.  Management by exception is unlikely to be sufficient, instead, for strategic supply, a regular agenda slot needs to be allocated; in the current climate, that reporting could be expected to be monthly.  

If you would like to read the full piece there are a limited number of free access eprints available through this link.

Intriguing procurement: BGT, Twitter-gate and PRISM

What have the Britain's Got Talent egg-thrower, Twitter-gate and PRISM got in common? Well the answer is they are all had contractors who behaved inappropriately, and brought embarrassment and loss to their client.

Last week I posted a blog on Dark Procurement which was previously a guest post on Spendmatters - it was fascinating to read some of the comments on the Spendmatters' post. I think it is fair to paraphrase the comments as saying, 'CPO's should act in line with their personal beliefs and conscience even if those personal beliefs are in conflict with those of their employer.

In BGT, Twitter-gate and PRISM we see examples of the contractor acting on their judgement/conscience as opposed to the clients - I'd really like to hear from CPOs who believe that's acceptable performance of a contract? But isn't the argument that CPO's should act on their conscience something similar?

What these examples highlight is moral hazard. When you're dealing with individuals who provide some form of personal service you face the risk of 'will they do what they're supposed to', which isn't easy to protect against. So we have Simon Cowell with egg on his shirt; Newsnight resignations; loss of Booz Allen Hamiton's share value;  NSA, GCHQ and the Foreign Secretary all being diverted from what they should be doing and paying a high cost due to a maverick contractor.

It really doesn't matter whether or not you believe the maverick was 'doing the right thing' if you were the CPOs who bought them but it does matter if the CPO didn't demonstrate due diligence.

T&Cs for Breakfast in Bed

Last week I carried out a very brief comparison of the price of a sirloin steak in a hotel restaurant and also as part of room service - insofar as I could see the only difference was that a 10oz steak was available in the restaurant while only an 8 oz through room service. The price difference was £17.50 as opposed £28 - saving the additional £10.50 at the loss of 2 oz of steak, I asked for the room service steak in the restaurant, but avoided the tray charge.

I then decided to carry out a quick comparison of the price of breakfast in bed in two hotels. By way of context both hotels were household name brands, in the same city, of the same star and giving me the same corporate rate - yes, theoretically they should be same. I can honestly say I have never ordered breakfast in bed with either of the hotels, but this week I noted the prices.

I have always assumed it was quite clear how much Breakfast in Bed would cost. However, for all you procurement legal illegals, can you make a judgment and tell me how much Breakfast in Bed at Hotel A should cost? By way of context, I was on a Bed and Breakfast rate, and prior to reading the T&Cs on the foot of the Order Placing Door Hanger, the headline prices are £10.95 for a Continental Breakfast and £14.95 while a cooked breakfast is £14.95. The T&Cs state:

A £5.00 charge will be applicable to all orders. For guests who have paid for a room package including breakfast, there will be a charge of £6 per room, for room service.... All prices include VAT.

So how what is the extra amount of money I should expect to be billed if I order a cooked breakfast?  Would it be £6, £11, £14.95, £19.95, £20.95, £25.95, or what?

Police procurement on the line

There's something very odd about a room where the most common item of clothing worn appears to be a white shirt and the main subject of discussion is how difficult it is to buy white shirts.

Yes, that's what the House of Commons Public Accounts Committee seemed to focus on at its meeting on 5 June when the subject was really Police Procurement.

However, this evidence session should, in my mind, be included within the Public Administration Select Committee's Inquiry into Public Procurement. The evidence had a much more realistic assessment of the difficulties associated with centralisation.

The Committee started with a reality check: why, when Gershon, in 2004, highlighted the need for a 'uniform' approach to buying white shirts for the 43 police forces,  has such a seemingly simple aspiration proved so difficult to implement? Yet, that's the question which needs an unequivocal answer to, and plan to address, before 'the grand collaborative public procurement vision' should be embarked upon.

Theoretically, the silver bullet has been found for the police in the form of the Procurement Hub. It appears the aspiration was that there would have been 100% sign-up to the Hub last year, yet so far only 2%, yes, TWO PERCENT has been reached. The new aspiration is that 80% will be achieved by the end of the current parliament. Asked, what milestone has been set for 12 months time on the journey from 2% to 80%, there was a sense of embarrassment - that question seemed to take the Permanent Secretary by surprise! It does make you question if there is the least likelihood of the 'stretch target' being achieved.


What are the problems with bringing about increased ownership of the Procurement Hub? Answer:

• Cultural issues;
• Changes in processes; and
• Resistance to change.

But hold on a second, the Procurement Hub will not standardise on one uniform white shirt, or one supplier, it's a collaborative 'framework'. Sounds a bit like legalising 'pick 'n' mix' as opposed to Gershon's vision.

The ethics and moral dilemma of Dark Procurement

A judge has ruled that an accountants job is to cut bills even if that relates to tax avoidance.

That ruling provides justification for sharing this blog which was original posted as a guest blog on Spendmatters:

The tragedy of the Dhaka factory collapse, which led to the death of over 1,000 innocent factory workers, has placed some procurement strategy under a cloud. There is a dark side of procurement with moral dilemmas which recognises there is more to ethics in procurement than the CIPS code.

Those directly responsible for the supply chain management of clothes with a 'Made in Dhaka' label are faced with a question as to whether or not this is something they would want to include on their CV or LinkedIn profile. While you would not necessarily be proud of sourcing from the Dhaka factory, is buying from low price sources such a bad thing if you are the CPO and that's what achieves the organisation's strategic objectives?

If there is a perception that buying cheap clothes for retail is distasteful, is there not also an element of public service linked to making available low price clothes for those who have to 'watch every penny'? 

There is another dark side of procurement; buying things which society would not necessarily celebrate. Buying some things must cause personal dilemmas for CPOs but that doesn't mean the CPO has no conscience and is a 'baddie'. The CPO must focus on delivering the best professional procurement, regardless of whether or not they agree with the policy. Arguing that poor procurement is justifiable in bad situations just doesn't add up.

There are other examples of dark procurement. For example, I found it quite bizarre when I learnt of the procurement team at a missile manufacturer seeking accreditation of their approach to environmental management. It seemed very odd to me that, when buying for the manufacture of something which will cause mass destruction, you want to be sure that you minimise environmental impact! Maybe it's not so strange but just professionalism?

Then we have the interesting position of buying ropes for the hangman. Yes, someone has to do that, as has recently been highlighted through a procurement exercise in India. You may be completely against the death penalty and even a sympathiser with some of those awaiting the death penalty for political reasons. But does it not make sense to ensure that the hangman's rope is the most fit for purpose and the most merciful? Shouldn't the best of professionalism in procurement be pursued even in such dilemmas?

Moral dilemmas and ethics work both ways too. It would be wrong for a CPO to go on a personal crusade pursuing their own political, social and religious beliefs if they do not coincide with the strategic position of their employing organisation. Wouldn't that be non-professional?

So, say for example, the leadership of the organisation where you are the CPO has consistently demonstrated cynicism of global warming. You believe in sustainable procurement and that it will benefit society in the long term - the Board don't agree. You are asked to procure a major piece of equipment. You delegate the work to your deputy. Your deputy however, is passionate about sustainability - they believe with their heart 'green is best' and progress a procurement which results in two offers, one 0.5% higher than an alternative option. The only difference between the two bids is the environmental impact. The additional cost for the environment offer is £1m. Your deputy recommends the higher, 'green' bid. You sympathise with your deputy but what are you going to recommend to teh Board?

Does professional procurement have room for a conscience - that in itself is a dilemma which doesn't appear to feature much in discussion.

NB This blog was first published as a guest blog on Spendmatters on 15 May 2013

A case of digital procurement sustaining and saving

It's not often I bring a good news story; maybe the sun has improved my outlook. Regardless, I am thankful to tweet of @360supplierview which drew my attention to a report in yesterday's Yorkshire Post.

Asda have provided a great example of how digital technology can be effectively harnessed by procurement to reduce costs and improve sustainability. Asda's Sustain and Save Exchange is a collaborative platform for suppliers - to me it looks like a community of practice. It aims to share information, knowledge and learning, raise questions, post key documents, attend focused activities, spur new ideas and solve problems.

Set up in February 2012 there are claims of £13m of savings in sustainable innovations. 300 suppliers have joined so far, including, bakery, fish, poultry, chilled, frozen, and ethnic foods.

Collaborative knowledge sharing and problem solving of this type would have been inconceivable a few years ago but this is surely only scratching the surface. Why have so few organisations seized the opportunity?

Ironically, while the retail sector is starting to recognise the potential of social collaboration, the future of LGA's Khub hangs in the balance. The LGA, sadly, has never really been able to drive the original vision and drive of Steve Dale even though he delivered global collaboration. It was a personal sadness to me as I was, at one time, leading the Efficiency and Productivity Exchange which was providing evidence of benefits clearly before the retail sector tipped its toe in the water.

Procurement Needs a Digital Strategy: White Paper

Some weeks ago, through a few posts, I discussed the need for procurement to embrace digital strategy. Those core ideas have now been drawn together into a whitepaper which can now been downloaded:  Procurement Needs a Digital Strategy: White Papers: Resources: TCS.

I hope you find the whitepaper of interest and I'd be delighted to receive any comments.

Outsourcing - good or bad?

Amidst this week's embarrassment of Parliamentarians serving their own interests the Sunday Times Business section included a piece of the increasing outsourcing of public services. I first have to declare an interest in that I am currently involved in a major outsourcing contract, so assume I have some bias, just in case.

One of the criticisms of outsourcing is alleged to be "little accountability or transparency over the claimed savings". To me, that argument just doesn't stack up.

First, it implies an acceptable level of accountability and transparency over existing savings under the 'as is' service delivery. It implies both will be reduced through outsourcing. Accountability for service delivery should remain with the democratically elected representative (or CEO) regardless of whether or not the service is delivered in-house or outsourced - failure to recognise that is a failure to recognise the fundamentals of public service delivery and contracting. Outsourcing delivery does not mean an abdication of accountability for delivery. In a well defined contract there will be clear levels of service stipulated supported with tight performance/contract management - accountability starts in defining what is to be delivered, which may not previously been subjected to the rigour of a specification.

There has been scepticism over claimed savings within the public sector for years. Indeed, even more fundamental, there have been difficulties actually calculating how much the 'in-house' service delivery costs. Without clarity on existing service costs there is no baseline for comparing the achieved savings, regardless of whether an in-house 'efficiency agenda is pursued or outsourcing. However, assuming you have gone through some sort of contracting route, you should be able to see how much an outsourced service will cost through the price. You should also be able to compare that price against any internal cost. Then, in subsequent years, you should be able to see year on year changes in the price paid.

Degrees of rotteness

How can you interpret what is the right thing or reinterpret doing the wrong thing? Whether or not Patrick Mercer MP has done the right thing remains for others to judge but what I can't get my head round are some of the crazy statements which seem to imply there is some honour in doing the wrong thing. Take for example these two statements:

If Mr Mercer has done something wrong he would act totally honourably.

Patrick Mercer has done the right thing in referring himself to the Parliamentary Commissioner for Standards and resigning the whip. 

It is a strange world we live in where corporate tax avoidance is considered morally wrong even though it may be complying with the law. Yet someone perceived to be unduly influencing the legislative machinery of the land, breaking rules of the organisation is spun as doing the right thing if they resign when caught.

How big a shift is that from a child murder, who, when there is compelling evidence presented which places them beyond reasonable doubt as the killer, decides to change to a plea of guilty?

Or what about the public sector procurement manager; are they doing the right thing awarding contracts to 'mates', until their malfeasance is exposed?

Is it any wonder confidence in the democratic system is waning when you can make up definitions of what is right as you go along, or rather, when you are exposed!