Saturday, 21 June 2014

Plot gets thicker on police procurement

On Tuesday I discussed potential procurement corruption in the award of a contract for vehicles with the Police Service of Northern Ireland.  Now it looks as though the investigation has been extended to another contract and spread and led to the suspension of West Yorkshire"s Chief Constable

Those leading the investigation need to recognise that the reputation of the police in the UK is at the present quite low. They also need to avoid falling into the trap of not being seen to be doing the right thing or providing an easy exit for those implicated.

However, if it is subsequently established that there has been procurement bribery, fraud and corruption, it will be most unlikely that it will be isolated to just vehicle contracts.  The investigation will need to review:

  1. The procurement governance structure;
  2. Which other areas of spend the culprits have been involved with and how vulnerable those areas were to abuse;
  3. Which other public sector organisations have been supplied by the supplier/s involved - it is unlikely that the supplier only found one area of vulnerability;
  4. Consider the history of dealing with the supplier/s involved and how long the abuse has been going on;
  5. Which other police forces, and indeed public sector organisations, may have been following the same 'failed' preventative systems;
  6. etc..
There also needs to be a due diligence of the procurement processes to establish vulnerability to procurement fraud, bribery and corruption. The Bribery Act requires organisations to put in place processes to prevent bribery anyway.

But if it is subsequently proved that contracts have been wrongly awarded as a result of corruption other relevant issues may arise. For example, 
  1. Assuming the contracts were awarded through the Public Contracts Regulations, surely there must have been a breach of those laws?
  2. What about the suppliers who would have been awarded the contracts had there not been corruption? Would those potential suppliers not be entitled to compensation for loss of profits? That would open a major can of worms as all those award evaluations would potentially be exposed to scrutiny and who knows how robust they would have been.
What will the next instalment be?

Friday, 20 June 2014

Not a good day for IT procurement strategy news

Not a good day for public procurement IT stories: two embarassing stories.  One looks like a procurement risk management and strategy issue linked with implementing a policy, regardless of understanding the risks; the second, concerns procurement project leadership credibility.

The Financial Times suggests the the Cabinet Office strategy of moving from big IT companies may have compromised effective delivery, in that the consortium of SMEs used as a preferred strategy may have stretched capability and led to service failures. 'Shambolic' is the term used!  While there are calls for delaying further rollout until lessons are learnt, is it not obvious that a phased rollout should have started with small departments should have been managed by the client with a watchful eye. Equally, while I can understand the sentiment of the policy, why on earth were ministers not aware of the risks, or were they?

The second story, this time in The Times, concerns the allocation of responsoibility for the Met's 'Total Technology' modernisation programme. It appears that one of those responsible for managing the programme brings with him unfortunate baggage of a past IT failure which cost £15m. While Grant Thornton found the oversight of the failed project in Surrey was 'not fit for purpose' it seems Rowley, who is now leading 'Total Technology', doesn't recognise that as relating to his leadership. Failure to recognise the need to learn lessons isn't a good place to be in - Mr Rowley and the Met need to understand what went wrong at Surrey and how those lessons will be applied in the future. As it is, Rowley's ability to gain the confidence of the programme team may already have compromised success. It is not a good omen.

So some key messages:

  1. A policy needs to be risk assessed and then implementation managed;
  2. If the decision is made to pursue a policy and strategy which is high risk it is best have a phased implementation starting with lower risk areas;
  3. Where a project has failed due to leadership which is 'not fit for purpose' understand the reasons behind that statement, acknowledge the failure if necessary, and be clear how the lessons learnt with be applied;
  4. Do expect a failed leader to deliver better leadership on a bigger programme without ensuring a strong governance structure is in place.

Tuesday, 17 June 2014

The arresting case of police vehicles and procurement

The UK fight on procurement fraud, bribery and corruption moved up a notch today following the arrest of six involved in the award of contracts for police vehicles in Northern Ireland. As part of the investigation the police have also seized computers.

It is interesting that the PSNI have made reference to trying to establish whether there has been a breach of their Code of Ethics. of course it is good that they have a Code of Ethics, but sometimes I wonder what purpose such a Code has if it is not widely communicated and, dare I say, 'policed'.

As a profession we need to understand what went awry with this procurement. We need to understand the lessons and we need to take those lessons home to our own organisatons. So let's hope that the findings of the investigation are shared.

If it is subsequently proved that there has been a breach of the PSNI Code and we have a case of procurement bribery, and potentially fraud and corruption, surely the case cannot be dealt with under the Code but needs to be dealt with under the Bribery Act - who would bring forward such a case?

Then again will PSNI be subject to the strict liability of the Bribery Act for failing to put in place measures to prevent bribery?

Then of course we have to see how CIPS will react if any subsequently found to be guilty turn out to be CIPS members. Will they be subject to CIPS discipline? If that is the case CIPS will be able to use that as a warning to its membership around the globe.

I will watch this case with interst - it has the potential of a precedent for the Act and CIPS.

PS you may find my related paper published in EDPACS, which can be downloaded here of interest.

Saturday, 14 June 2014

The state of UK public procurement 2014

This paper celebrates the application of good procurement practice in user engagement throughout the procurement cycle, adoption of a category management approach, inclusion of social benefit clauses, use of eAuctions, collaborative purchasing beyond supplies, and environmental purchasing. However, by implication, the paper also suggests there is also significant room for improvement through the wider application of user engagement throughout the procurement cycle, adoption of a category management approach, inclusion of social benefit clauses, use of eAuctions, collaborative purchasing beyond supplies, and environmental purchasing. These improvements would deliver cost reductions and improved public services, objectives of the public sector throughout the world. The challenge is now to understand what contributed to the exemplars being able to bring about the change and accelerating the transference of that good practice throughout the public sector.

Wednesday, 11 June 2014

Uber wars

Today sees the next round of 'Uber Wars' in London.   Uber is an app which allows you to hail a Cab and know how much it will cost.

If like me you travel frequently between Northern Ireland and London it provides the additional benefit of not having to bring English notes as London Cabbies have a reluctance to accept the Queen's Northern Irish Sterling. 

It also provides an alternative supply source - using Uber doesn't mean you can't also use Black Cabs!

Nevertheless, the Black Cabbies are out in protest today, I think 12,000, through fear of what digital might do to their business model. I've previously discussed Digital Procurement Strategy and how we should embrace it but this is an angle I hadn't touched upon.

It's a strange protest insofar as it has actually pushed people to find out more about their competitor, 
 Uber, and its benefits, I suspect has led to a marked increase in Uber app downloads. I also assume, Uber provides some sort of 'trackable' history which means it may be safer as well as cheaper. Meanwhile Uber stole a mark on the Black Cabs today by adding Black Cabs to their app. I'm not sure how the Cabbies will respond to that.

Will the protest work? Actually I don't think so. The existing dominant provider has signposted to its competitor. There are negligible switching costs, if any. 

To have an impact Black Cabs will need to think smarter in communicating whatever benefits they have and delivering a more customer focussed service - something which is erratic. The previous benefits of 'The Knowledge' may no longer be worth investing in if you have aspirations of being a Cabbie - could Uber become a tool for Black Cabbies too?

Then the protest suffers from too many alternatives available today - a parallel protest with a Tube Strike may have led TfL to revisit its position. It's also a lovely day here in London - walking is fine!

From a commercial point of view, will firms no longer accept Black Cab receipts and ask for evidence that you first tried Uber?

Digital is changing taxis - have you thought how it is changing procurement?

Wednesday, 4 June 2014

Complex Contracting - Book review

Brown, et al. (2013) have pulled off a remarkable coup with this book in that it provides something of real value for procurement practitioners, those managing and leading major projects, academia and students. It is easy to read too and virtually free of jargon.
But what is meant by ‘complex contracting’? This is a book about contracting in uncertainty when there is a requirement for a level of buyer and seller investment that makes exit difficult. It is the degree of uncertainty that makes a contract complex, not the size of the budget.  The book will be relevant to all those contracting in “the fog of uncertainty” (p.49).
It deals with the US Coast Guard’s approach to using a new integrated strategic approach to procuring, over 30 years with an anticipated expenditure of $24bn, boats, planes, helicopters and an IT system. An exceptionally ambitious undertaking, with a steep learning curve and, as almost every aspect of the procurement was new for both the buyers and the providers, significant risk.
N.B This is an extract from my full review which can be read in Local Government Studies.