Another Groundhog Day for UK public prourement

Supply Management has covered a news item that the government will review public sector food procurement with a view to reducing leakage from UK agriculture sector. Isn't this yet another Groundhog Day for UK public procurement? Back in 2003 we had the Public Sector Food Procurement Initiative. I spent many hours at meetings and training days which were aimed at strategically using UK public procurement to deliver UK farming benefits.

I have previously discussed the Groundhog Day approach to UK political procurement (and here). The Groundhog Day approach to procurement policy is interesting. Imitation is said to be both the best and most sincere form of flattery - there must be some agreement that these policy through procurement initiatives, conceptually at least, have some merit. They also have the potential of being good political platform announcements - when a politician makes a conference speech the concept may well resonate with the audience and few appear to stand up and shout 'Groundhog Day'. The Groundhog Day Policy must also give the person who suggested the recycled initiative some kudos.

But do Groundhog Day procurement policies not also throw up other questions. For example, what lessons have been learnt from the previous attempt at addressing this, was there an outcome evaluation of the previous initiative, why was the previous initiative not embedded in practice, will those who adopted the former strategy now have problems reselling the new strategy, are those who resist change actually the winners in Groundhog Day procurement policy?

It does strike me as strange that opposition MPs, who may well previously have led on these Groundhog Day initiatives, aren't asking questions and attempting to break the cycle. Either way, as I say, the policies, generally appear to be good, pity about the implementation and performance management.

Any suggestions as to what the next Groundhog Day procurement policy will be?

CIPS Ethical Procurement & Supply eLearning & Certificate

I can only give CIPS praise today for the introduction of its Ethical Procurement & Supply eLearning and certificate.

The training covers: eradication of unethical behaviour to the human race, eradicating corruption and exploitation, and, personal conscience, compliance and influence. The content, is bang up to date and well presented.

I spent sometime yesterday completing my employer's compulsory 'Compliance with Governance, Anti-bribery and Corruption Awareness' eLearning and test too. So I half expected the CIPS eLearning to have been a bit easier. However, I found the training, informative, quite demanding and not something I could rush through.

There's quite a nice mix of reinforcing detailed case studies and tests on the way through which give you a warm-up to the final test. On completion of the training, which probably took me in the region of four hours, there's a final test which is no pushover but leads to a Certificate. Perhaps useful as a Personal Objective for all procurement staff.

The eLearning and test is free for CIPS members until October 2014. I'd encourage CIPS to continue to offer the training and test free of charge as part of the overall membership offer but perhaps embed it into membership renewal, otherwise I suspect it will slip off the radar. Nevertheless, an excellent CIPS offer which I recommend.  

Lessons for procurement from care.data

There are few areas in public services delivery which are more precious to individuals in the UK than the NHS and the protection of personal data. Yet somehow the NHS, in trying to introduce an IT system which will share patient data, appear to have forgotten that. As a result of getting the communications plan relating to the change wrong the NHS have had to delay implementation of the initiative by six months - perhaps even indefinitely. What seems to have gone wrong and are there any lessons for procurement?

First, let's remember that this is about change management. You can't expect people to just go along with your belief of what represents an improvement, you have to win them round, you have to listen to their concerns, understand their perceptions of the potential risks, and clearly communicate the benefits. On all these fronts the NHS seem to have got it wrong as far as care.data is concerned. You also have to get those who are trusted and have influence over those impacted on the change on board - recall we heard last month that a reasonable proportion of GPs are sceptical about care.data.

Experts believe that the new system will help in the assessment of new solutions, better manage risks and help performance management - all very laudable. But patients believe their personal data will be sold and have a lack of confidence in existing data security - all very understandable. The NHS claim every household received a mailshot outlining the benefits, yet many of those impacted by the changes still appear to be in the dark and sceptical - did they receive the mailshot or was it lost in all the other 'noise'?

So what are the lessons for procurement?

What the GO Awards tell us about the state of UK public procurement

I've spent the last few days reading and discussing entries for this year’s National GO Excellence in Public Procurement Awards. This is a significant task given the increasing number of submissions the Awards receive each time. I've been judging for three years and I always find it very educational. 

The entries, looked at collectively, tell an interesting story of trends, what practitioners consider to be current exemplary practice (if that wasn't their view why would they enter?) and leading edge practice which would stand on its own two feet regardless of the sector.

I can see that eAuctions are delivering great results, I can see that engagement with users throughout the procurement cycle has moved from an aspiration to a practice and I can see that category management is being adopted. I can see that social benefit clauses have moved from a 'how could we?' to a reality. I can see that Procurement Teams have a seat at the table in solving public services delivery problems. I can see that good public procurement is no longer limited to the public sector but some great work is also taking place in the social landlords’ world and third sector. I can see that collaboration is becoming more ambitious, effective and participation is wider. I can see that procurement projects are becoming more audacious and delivering real benefits. I can see that sustainable procurement hasn't been sacrificed on the altar of 'savings'. The GO Awards provide an excellent showcase for the best so that others can learn, replicate and adapt.

Having said that, I can also see that there are areas where public procurement still has room to improve and could lead the way where the private sector has only dipped its toe in the water, for example, harnessing digital within procurement strategy. There is time to work hard on some new things and gain a first next year.

Now I'm looking forward to the GO Awards being presented in Birmingham on the evening of 19 March (seewww.goawards.co.uk for details) when the good work will be shared and celebrated. I won't have to obey a oath of silence but can sing out my praise for the best.

The wonders of consumer credit ratings

Most mornings I listen to SkyNews punctuated with advertisements which generally go in one ear and out the other. Then today the Experian Credit Expert advertisement caused me to think.

I've been paying a trivial monthly fee for years to Exeprian so that I can access my credit rating.

It all dated back to a problem with Santander whose Direct Debit system couldn't cope with the additional public holiday for Willy and Kate's Wedding. Santander said I had missed a payment on a loan even though I knew their system had failed to take the money out of the account. Customer focussed Santander, despite their assurances not to, and unknown to me, bizarrely gave me a 'black mark' on the Exeprian Credit Rating system.  Then, when I wanted to get a mobile phone from Vodafone I was embarrassed to learn they couldn't supply and I needed to pay a subscription to Experian to find out why. I therefore started the Experian subscription to establish how I had a 'black mark'. I established it was due to Santander's mistake, but had to contact Santander to get the 'black mark' removed.

So, Experian, accumulate information, regardless of how unjustified it is, and use that to give me a credit rating. Those who feed the information to Experian, no doubt pay for the service of also extracting information from Experian. I have to pay to access the information. And now, if today's advertisement is correct, Experian will now provide me with a service, to tell me how to reduce the credit rating they have given me. Isn't that one fantastic business model. Does the payment of the fee for the service de facto mean I'm paying Experian to get their information right?

Procurement 20/20: Supply Entrepreneurship in a Changing World - book review

A new book on procurement is always of interest but too often takes on the 'emperor's new clothes. Unfortunately, even though this is a book written by four McKiksey consultants, little is new. 

For example, the authors take Lamming's suggestion of purchasing needing to become External Resource Management (1993) and provide examples that becoming a reality. Sadly Lamming doesn't get an acknowledgement of the rebranded concept. That would be understandable if it were not that McKinsey's father of the Kraljic model is used as a springboard for the book.

Great examples are trotted out, but yet a blindspot exists by not recognising the problems Apple and others encountered through using Foxconn. Instead Apple's outsourcing to Foxconn is viewed as exemplar! So, for example, "Apple maintains control over nearly every step along the value chain. ... The orchestration is so tight and extensive that Apple places electronic monitors into some parts boxes at supplier sights to allow remote monitoring of production speed and discourage product theft". Then think of the problems I've highlighted in this blog previously encounered by Apple and Foxconn!

Have we reached a watershed with advisers

Who's to blame for the water chaos in England? Eric Pickles has apologised by saying

"I think we recognised we should have dredged .... I'm really sorry we took the advice, we thought we were dealing with experts"

Yet the Met Office's chief scientist argues climate change  has probably contributed to the awful weather that has been seen.

Meanwhile, Lord Smith of the Environment Agency blamed the Treasury's strict cost-benefit rules.

So Eric Pickles, presumably acting on advice, has pointed the finger at the government for listening to advisers, the government's meteorological advisers have pointed to the climate change, the Chairman of the Environment Agency has pointed to the HMT advisers who developed/apply the cost/benefit model. That's a lot of finger pointing with only Eric Pickles, 'advisedly' saying mea culpa. I wonder will some smart QC provide legal advice to those who have suffered on who should be asked to pay the costs?  

Isn't it true though that Ministers have to seek out best advice, weigh up the options and form a judgement? Will we now see a reduction in the role of advisers - on the contrary, if anything, I think what is required is the need for a wider range of advice from those with a pedigree to give it, including from those who aren't prepared to just tell Ministers what they want to hear.

Weathering the VfM decision-making storm in the South-West

My heart goes out to those in the south-west who have suffered from the ravages of weather and short-term decision-making. It seems quite easy, from afar, to blur the catastrophe of what seems to be two separate problems. One being the battering from the storms which are beyond our control, the second being the flooding which does seem to have had some antecedent in human decision-making.

For their visits to the Somerset Levels somebody took the decision to buy green wellies for David Cameron and red-toed Argyll boots for Chris Smith. You can just visualise an episode of 'The Thick of It' considering the various pros and cons of health and safety needs, being able to avoid slipping in front of the media and even whether trousers could be tucked in without getting wet. Of course those living on the Somerset Levels have more pressing purchases on their mind, for example, the need to buy sandbags.

But somebody also took the decision as to what value for money criteria were applied in evaluating the request from Edwin White last year asking for match-funding for dredging to prevent flooding. It can only be assumed the architect of the criteria is not one of those who lives in the Somerset Levels. From the remoteness of a dry Whitehall office establishing such criteria and weights, against a background of civil service job losses, may well be a purely academic exercise as opposed to one which may impact on real people.

Then consider the decision-making of Sam Notaro (that's his home in the picture). Sam invested £1m constructing a 5ft flood defence around his own house. Apparently still in the house, managing breaches in the defences when they occur. He has also taken the additional precaution of wrapping some of the house with polythene. I think Sam has made a good assessment of VfM criteria and hopefully he has demonstrated, through his own risk management, his competence as a potential builder for others.

There's something strange happens when evaluation criteria are established. There's always an element of subjectivity. There may also be an element of risk aversion. Perhaps some political pandering. It does strike me that some may be better left to evaluating wellington boot purchase options than anything of significance.

Don't mention you're in public procurement on your holidays - European Commission Anti-corruption report

The European Commission has just published its report on anti-corruption which aggregates various pieces of research and sadly highlights public procurement under the 'plenty of room for improvement' category.  

Research from 2008 is cited suggesting between 20%-25% of contract price and sometimes as much as 50% (p.21) can be included in some contract costs as a result of corruption. 

Looking across EU, 32% of companies which participated in public procurement said corruption prevented them from winning a contract (p.24). 

Areas of abuse were perceived to be ( p.25): 

• specifications tailor-made for specific companies (57%), 
• conflict of interest in bid evaluation (54%), 
• collusive bidding (52%), 
• unclear selection or evaluation criteria (51%), 
• involvement of bidders in the design of specifications (48 %), 
• abuse of negotiated procedures (47 %), 
• abuse of emergency grounds to justify the use of non-competitive or fast-track procedure (46%), 
• amendments to the contract terms after conclusion of the contract (44%).

I don't actually find the areas of perceived abuse remotely surprising but was initially slightly cynical of the research approach, for example, if you give someone a list of areas of abuse and asked them merely to guess were corruption is most prevalent, I think you'd get the same answers.

Yet,

The craziness of legislating the use of central purchasing bodies

Peter Smith highlighted that consultation is taking place on a potential strategy of the Cabinet Office to use the implementation of the  new EU Procurement Directives to mandate the use of central purchasing bodies. Clearly there is a desperation to make centralisation work. That desperation seems to be blinding eyes of the believers and closing their ears to the whole 'nudge unit's' approach of making it easier to default in a desired direction.

My own opinion is that centralisation of purchasing is a philosophical position as opposed to pragmatic or evidence based. The aspiration of centralisation is believed to be the answer when decentralisation dominates, and decentralisation is the answer when centralisation dominates. Of course that's an over-simplification but the grass is always greener on the other side. Then again the tried and tested route-map to the 'other side' of central body purchasing has not yet been found.

We know that centralising Fire & Rescue purchasing through Firebuy just didn't work. We also know of the perennial problems of trying to get the 43 police authorities to standardise on something as simple as white shirts has proved too difficult to master. Yet, in the absence of understanding what will make a difference, mandating through legislation is being contemplated.

Since 1786, through the HMSO, central government have been trying to make centralisation work; where is the evidence to suggest they will be able to make it happen this time? Is it more than propaganda? Is there even the evidence that if it were to work, there won't be a cry for decentralisation in the near future?

Wouldn't it make more sense to create an appetite for centralisation before creating legislation. But then, you don't need legislation anyway to enable centralisation - you need a compelling argument and an attractive proposition. However, if you create bad legislation and the legislation fails, then will the courts be used? How will foot that bill?

The whole notion of using the stick of legislation seems absolutely crazy to me.

Such a shame responsible supply chains can only pull

I'm sure you all remember the rhetoric which followed last year's clothing factory collapse in Bangladesh. The Minister was going to put the world to right by shaking his finger at the retail sector and the retailers were quick to make promises of compensation. Sadly a year later, the hot air has cooled and little was delivered on the commitments. It appears Primark, the great villain at the time, are one of a small group of retailers who actually delivered on their promises.

However, it also seems that supply chain managers who pride themselves on pulling goods through the supply chain seem unable to make sure that the compensation promised is pushed back down the supply chain to those who desperately need to receive it. Donations have been ad hoc and there are a lack of records of who received the compensation and systems in place to support distribution.

Wouldn't we be amazed if retail buyers were unable to trace their supply chain back and satisfy themselves of the flow of goods from the factory floor to the shop shelves. Wouldn't we also be amazed if they couldn't trace payment of invoices and receipt of credit notes through the supply chain. Wouldn't we be amazed if supply chain managers didn't have contract management and performance management systems in place to ensure quality and timeliness of delivery. That being the case, can there be any excuse for not making sure the victims of the Rana Plaza factory disaster are still waiting and paying the price?