Thursday, 29 December 2016

Barcodes in the NHS - I'm mystified, tell me I'm wrong.

"Barcodes are going to be used in the NHS" has been a headline story on the TV today and in the press.  Now I've had more than my fair share of NHS treatment over the years and I completely support harnessing the potential of barcode use.

I'd also like a barcode to be issued to me the moment I enter the A&E carpark, yes the carpark, and that then tracks how long it takes until I leave with a hopefully a smiley face - shouldn't waiting time be reported from the time I arrive on site, shouldn't there be something which sets aside hospital carparking fees when the cause has been NHS queuing inefficiency?

However, back to the real world, what struck me with the TV coverage of the story was that the practitioners were not emphasising patient tracking, risk management and accountability, but stock control! Stock control?

I am absolutely mystified, that after so many 'cost down' initiatives in the NHS, we are being led to believe that it is only now barcodes are being piloted in stock control. Let's remember barcodes were introduced in the 1970s. The news coverage suggests a pilot NOT a rollout, mind you.

I would really like to be reassured that basic good practice stock control and purchasing, including the use of barcodes, has been practiced for years and that the news coverage is misleading?  I'd like to understand, and have a darn good explanation why barcodes haven't been used and I'd like someone to explain why the potential cost benefits have been missed?  If the news coverage is correct, and barcodes are not widely used, I would like to understand the NHS strategy for Innovation transfer? In fact, could someone explain to me who will give an explantation why the Government's 2008 white paper on innovation doesn't seem to have been performance managed?

Monday, 26 December 2016

It's time for a review of the impact of procurement legislation

Today The Times reported that the Ministry of Defence takes bribery and corruption very seriously and has made dozens of allegations about bribery and corruption in supply chains.   Now, I ask you, which organisation is going to admit it doesn't take bribery and corruption seriously?

However, often when I meet with 'procurement leaders' and make reference to the Modern Slavery Act, and/or the Bribery Act, I don't get the impression either of those pieces of legislation are taken that seriously at all. Indeed, I am often left with feeling nothing is really happening there.

Perhaps, as a profession, it is time to take stock and ask what difference these types of legislation actually have on the procurement community.  Are we fooling ourselves?

Surely if the profession is committed to the spirit of the legislation it would make sense to lead an impact assessment to establish 'so what?'.  Commitment to the spirit of the legislation isn't enough.  I suggest we need performance management, and yes, sanctions on those within the profession - I have to think long and hard to recall any 'naming, shaming and being struck off' - are we fooling ourselves that all is rosy.

Wednesday, 21 December 2016

Why did government and Deloitte agree to 6 months of no bids?

While I can understand the annoyance of #10 over a leaked paper on its approach to managing Brexit, I have struggled all day to understand why the UK Government and Deloitte have agreed to a six-month no bidding period as a consequence - is this not must a lose-lose agreement?

Let's set aside the leaking of the document and whether or not Deloitte had any control over its arrival in The Times, was it a validate assessment of the UKs preparedness? There used to be a hackneyed saying about 'speaking the truth onto power', if the assessment was correct, maybe the government needed to hear.  If the assessment was flawed, why take any action at all?

Then we come to the issue of the six-month separation. The suggestion is that the government may not suffer as a result of Deloitte not bidding. But what if Deloitte had a particularly smart way of answering a problem which the government is faced with over the next six months - aren't the government 'cutting off their nose to spite their face'?  How does that stack up against the pursuit of value for money?

Alternatively, if a bidder, just any bidder, deliberately opted out of bidding and signalled that intention to its competitors, isn't very close to distorting the market.  What if you turned that on its head and the buyer said, "we've removed one of the competition"?

What if the outcome is that the government have trouble getting bidders? Wouldn't that put the government at a disadvantage in trying to get its work done; assuming the work needed done in the first place.

Then again, how would all this agreement to no bidding sit within the EU procurement rules? Assuming the government exerted some pressure on Deloitte to arrive at such an odd settlement, is that remotely compatible with the existing principles of the Market?

So how will this manifest itself over the next six months?  Have Deloitte's voluntarily agreed to a six month blacklisting period during which they will not be invited to bid?  If they are awarded a contract by mistake, will it be set aside? What will the memo to departments setting out the current position say?

Monday, 19 December 2016

Lagarde conviction should be a warning for all those involved in procurement governance

Today Christine Lagarde was convicted of criminal charges of negligence for failing to challenge a decision and merely rubber stamping.  Lagarde, currently the IMF chief, former French Finance Minister and ally of former UK Chancellor George Osborne in pursuit of his austerity strategy, has long been one of the most respected commentators and regularly appeared on Newsnight, for example.  She would have been an exemplar in a world when politicians are losing respect. While she will not be spending Christmas in jail, the view is that she could have been looking at one year in prison and a €13,000 fine.

This highly unusually high profile case must serve as a wake-up call to those involved in governance; rubber stamping is insufficient.  Governance is about representing the interests of the organisation and protecting it through scrutiny and asking clever questions, and dare I say, particularly those involved in investments and procurement.  The 'professional' experts should have nothing to fear in providing assurance of how they have arrived at recommendations.  The scrutiny of the 'approvers' is the last QA line of defence before committing the organisation to what could prove, in retrospect, to have been a mistake.

Here in Northern Ireland, the First Minister, Arlene Foster, is facing calls to step aside while an investigation is carried out into her involvement in the daft Renewable Heat Incentive Scheme, which provided the perverse incentive of rewarding users to over-heat their properties.  One can assume that the Lagarde outcome will stir the pot at the Northern Ireland Assembly more. Did, Foster, when she was overseeing the Department of Enterprise, Trade and Investment, ask clever questions, did she merely rubber stamp, or ...?

I am reminded of David Steele's defence when he was challenged over some of the decisions in the Scottish Parliament building fiasco  - Ministers were kept in the dark by civil servants!  I think that escape route is unlikely to be acceptable anymore or haven't the lessons been learnt?

After years of working on governance processes and the associated risk management, I think that both Lagarde and Foster are far from alone in how they have 'exercised' governance, and I doubt the lessons will be heeded or welcomed by many.

Wednesday, 7 December 2016

Trump's Twitter procurement strategy?

Donald Trump has redefined how to use Twitter. Still President Elect, as opposed to President, he appears to have adopted a 'shoot from the hip' approach to policy and announcements. In the UK politicians were criticised from making announcements on TV as opposed to Parliament, but this is of a different order.

One of the stories which dominats the US news today is President Elect, Donald Trump's 'Cancel the order' Tweet.  The order being with Chicago-based Boeing for a new version of Air Force One.  The Tweet is effectively saying "I am going to block this contract as I believe it is no longer a good deal". Now, that will send tidal waves through contractors and those in procurement in US public procurement! What will become the new modus operandi?

Needless to say Trump's estimate of the $4bn is challenged by many. Boeing, it appears, haven't even secured the deal!  Then you've got the reality that the plane is unlikely to be delivered during Trump's residence of the Whitehouse anyway - it will be other Presidents' plane as opposed to his. Transition is taking on a new completion now and for his successor.

Anyway, is Trump ushering in a new style of Twitter usage, a new style of public procurement negotiations, or a new style of procurement strategy?  If other political and business leaders chose to follow his style this will create a very real and present danger for procurement professionals. Trump has built a reputation of saying "You're fired" what's that mean for procurement?

Wednesday, 30 November 2016

Shackleton's Way: Leadership lessons from the great Antarctic explorer - Book review

Shackleton has been 'up there' as one of my heroes as long as I can remember and certainly since back in the late 60s/early 70s when I first took up mountaineering and looked forward to a career on the Navy/Marines - bet that surprised a few of you. So I had a reasonable awareness of his leadership ability.

As a result I actually bought this book for my son who was working on an assignment on Leadership last year - he was looking for exemplars and, to me, Shackleton was an obvious choice. Sadly the book's pristine condition told a story of its own.

Anyway, I retrieved the book and embarked on a journey of reliving Shackleton's adventures - at least that was the hope. Unfortunately the book suffers from a lack of flow and therefore becomes a bit of chore.  Basically every chapter has three sub-chapters: the storyline which often feels contrived and constructed around PowerPoint headings; a summary of the key lessons; and then a sub-chapter on how someone has been strongly influenced by Shackleton's style.  To me the book suffers as a result and becomes laboured through trying to do too many things and none of them particularly well.  The book consequently also suffers from the lack of a narrative - at one stage I wondered if I would enjoy reading the book better by just sticking to the first sub-chapters. The biggest disappointment though is the almost deification of Shackleton - I just don't feel that would be Shackleton's Way and although a great leader he was no saint.

I believe every aspiring CFO needs to understand Leadership and demonstration of Leadership separates the 'great' from the merely 'good' CPO.  Although the key points for CPOs will be found in the book, this isn't the book I would recommend.

Friday, 25 November 2016

Gove turns his guns on procurement and programme management

One time thought to be a contender to become PM, former Secretary of State for Education, and Secretary of State for Justice has set his sights on public sector procurement and programme management professionals today, in a Comment piece in the Times. I will watch with interest the Letters section to see if CIPS reply.

Gove does a fine job of cataloguing procurement and programme management disasters. Indeed, many of the cases he cites are those I have blogged about in the past and/or used as case studies when training.  I will spare you an echoing of the cases; the average man or women on the street is familiar with many of them anyway.

While it is interesting that Gove has put pen to paper on a subject dear to many of us, what is particularly interesting is who he considers to blame - the 'Sir Humphrey's but not the Ministers.

Gove calls for a shift to weekly reporting on progress to Parliament of procurements and programmes. Would there be enough Parliamentary time and, if there was the time, would we see any interest from MPs?

Controversially he also wants to
see the names of civil servants responsible for these programmes to be published, their explanations for failure (or success) recorded and those who've failed be removed while those who can demonstrate clear, measurable, success get promoted. I know this concept- let's call it accountability - may be somewhat revolutionary for our civil service.
This is an interesting notion but isn't Gove missing the point about why we have Ministers in charge of government departments?  It is the democratically elected politicians who have to call those in their own departments to account.  It is the democratically elected politicians who have to rein in the pursuit of unrealistic political timescales.  It is the democratically elected politicians who have to develop the skills to scrutinise and manage professionals to ensure that they deliver on their objectives. Yes, perhaps civil servants need to use a louder voice in explaining to politicians the risks of pursuing some projects. But you can't just point the finger at the civil servants without recognising a failure of political performance management.

Also worrying is the implication that civil servants are being influenced by lobby groups. Can he really believe that, and if he does, why doesn't he blow the whistle on what really amounts to corruption.

This, one time, very influential political may well have lost a lot of his power, but should he ever regain it, CIPS will have a major problem if they don't educate the former Secretary of Education now.

Saturday, 19 November 2016

Approval processes, the Queen and Parliament

I've been giving a lot of thought lately to approval processes for big investments, not just procurement. Part of my thinking has been concerned with how you would define a good approval process and evaluate the 'As-Is' - my early thinking is that it would exhibit the following:
  • Robust governance at the appropriate level;
  • Clarity of who owns and is accountable for the business case;
  • Consistency in application;
  • Visibility and transparency - knowing when a given need is in the process and what's happening;
  • Understood by users;
  • Pragmatism;
  • Integration with the wider eco-system.
How do those attributes sound to you?  What else would you include?

Anyway, news that the The Queen is now seeking approval from parliament for £369m of repairs to one of her homes was timely.  Basically Parliament hold the purse strings and need to approve the cost of the repairs at Buckingham Palace, but the current issue is why, within 12 months, has the estimated cost rose from £150m to £369m for the ten-year refit?  

We are told that last year's estimate "was one of several estimates" and didn't include inflation!  Hold on, what is the current rate of inflation, isn't it just under 1%, over the next ten years will that be radically different?  Of the 'several estimates' received last year, what was the range, and was there some selective presentation of the figures to secure last years approval in principle? It's surprising they didn't blame it on Brexit too.

I think it may be interesting to understand why such an investment is now needed - was there no investment in recent years in preventative maintenance? Is this all reactive?  Surely those managing the Royal Estate should be concerned with preventative maintenance and there shouldn't be a need for such a massive investment?

But let's also remember that this latest discussion is about approval to invest the now £369m. When I discuss an integrated approach in my list of attributes of an approval process, I'm referring to integration with what happens after approval has been granted.  I want to see approvals within stated tolerances and subsequent governance and scrutiny in the contract award and implementation, including project management. Without that Parliament would be buying a promise and abdicating responsibility for ensuing actual value for money is achieved, not just the aspiration.  There's another interesting question here, if you recall Westminster Palace is also in need of a massive refurbishment - is there no strategy for looking across the portfolio and planning accordingly?

Friday, 18 November 2016

Brexit preparedness and armoured vehicles - what's so hard about that for procurement?

Just in case you wondered why I hadn't blogged recently, it is quite straight-forward, I've been very busy on my day job and haven't found much to say or add to the current procurement debates. I've also been really frustrated with obvious lack of preparedness to the Brexit vote - I wrote an article in Public Money and Management in March 2015 which warned:
... there is growing discomfort in many countries with their membership of the EU.  Those working in public procurement policy and practice would do well to consider the 'what if' scenario if the threatened exits from the EU materialize as there would be significant repercussions. (PMM, Vol 35, #2,  March 2015, p.95).
Well the news this week certainly suggests my warnings should have been heeded more widely across the UK public sector.

However, excuse that bit of "I told you so" - what do you make of the story in today's Times: 'MOD accused of sham contest for armoured vehicles contract'?  The gist of the story is that there are insinuations that the MOD is engaging in a procurement process while already having made up its mind what the outcome will be.  Apparently, the "preliminary market engagement" has been worded in such a way as to reduce the options to one, even though, functionally, it would appear there are significantly lower priced alternatives available!  The process is underway at the present and this stage closes on Tuesday coming.

I wonder how the MOD assessed the risk of this procurement exercise? What will happen in the rest of the procurement process?

If it turns out the potential alternative providers chose not to bid, then the media and those bidders will say it was a fix and the tax payer may have lost out - we would never know.  If the competing products don't match the needs of those on the frontline but because of media attention is awarded anyway, the frontline users suffer and also the best provider misses out on their competitive advantage. If the alternative providers do submit the required responses and then subsequently aren't shortlisted, it will be perceived as a fix and a very costly fools errant for the bidders.  If the alleged preferred supplier wins, at what is considered to be an inflated price, there will be questions, perhaps even allegations of corruption.  If the process is scrapped ... I could go on but you get the gist.

This procurement has all the hallmarks of not being a CV enhancer - why on earth can we not think procurement risk and manage it?

Monday, 12 September 2016

When contract management meets prisons management.

In the face of an obvious procurement performance management crisis in UK prisons, the Prisons Minister has stated "We have robust processes in place to closely monitor and manage the performance of all contractors".  It therefore seems strange that a £200m maintenance contract has been able to take on the appearance of not being managed and it was only when prison officers refused to accept inmates, some repairs made within hours!

Robust contract management process need to be more than just a written procedure, they need to be embedded as a way of working.

To make that happen the contract needs to have explicit standards and a specification of what represents acceptable performance - it is agreement between the provider and client of what they are exchanging. Is that explicit in the prison's maintenance contract?  That statement should have been based on a risk assessment and understanding of the 'front line' - were front line staff involved in defining the standards?

There also needs to be a cascading of the contract documentation down to those who are in a position to know, on the ground, what acceptable performance means. There is little point in a contractor being criticised for poor delivery if they are actually matching what they were asked to price, that could include, for example, schedules of which repairs need to be completed within particular timescales - again risk based.  While Carillion, in this particular case, are being criticised, is the specification part of the contract actually robust?

A contract management structure needs to support the process which sets out who monitors what and the escalation approach. It also needs to have a process where and when client/contractor liaison meetings take place.  Either this was not in place or it has failed drastically for the Prisons Minister to now be meeting with Carillion's senior management to set out the improvements required.

But the Prisons Minister also needs more that a list of defaults to wave in front of Carillion, he needs to have a very clear plan of what he is going to do if Carillion don't make the improvements. Can he terminate the contract and find someone else, for example? If he makes a threat at this stage and then doesn't follow through, he'll be looking for his own 'get out of jail' card.

Wednesday, 10 August 2016

Procurement risk management & power at Labour Party HQ

You may recall I discussed the UK Government's Guidance Note on Procurement Boycotts some time ago - at that time I was cynical about it's impact. However, Procurement Boycott's hit the news again today - this time the decision of the Labour Party to Boycott that 'procurement old faithful' G4S.

It seems the Labour Party Conference now has a risk of being cancelled as there may not be a contractor in place to provide the required security cover. G4S' contract was cancelled due to their links with Israeli prisons. Attempts at getting others to bid have so far failed.

This is one of those examples which demonstrates so much of procurement risk management. Firstly, it was probably perceived as a Routine contract as opposed to a Bottleneck 'show stopper'. Secondly, it demonstrates the need to recognise power and dependency - Labour probably but wrongly assumed, like so many, that security contractors would love to compete for their work.  Thirdly, it demonstrates that putting in a Procurement Policy without considering its full implications may result in having to rip up the policy.  Finally, it demonstrates the need for supplier engagement when introducing 'new ways of working'.

Procurement Policy may just have moved up the agenda of the Labour Party - it certainly looks as though someone is going to have to shift.

Saturday, 30 July 2016

Nuclear fallout in procurement award process

Forget the Hinkley Point procurement process for a minute and let's reflect on the procurement process for the £7bn decommissioning of the UK's first generation of nuclear power plants - yes, they got it wrong!  Well at least that was the judgement of Mr Juctice Fraser at the High Court; now the Nuclear Decommissioning Authority "are considering [their] legal options".

So what went wrong?
  1. A bidder, which should have been excluded from the process due to omissions in its submission, was allowed to progress to the next stage;
  2. Bidders were not treated on equal terms - allegedly one tenderer was disadvantaged in the scoring;
  3. "Experts" evaluating the submissions manipulated their calculations to arrive at their preferred outcome; 
  4. The wrong consortium were awarded the contract.
All fairly basic breaches of procurement good practice and yet potentially this would have gone unnoticed had one consortium not challenged the award.  

Were no concerns expressed by the evaluation team? Were there no whistle-blowers? Was this just incompetence or perhaps something more sinister? 

Let's remember that the wrongful award appears to have had a significant detrimental impact on the wronged bidder. There will now be compensation costs and possibly significant delays to completion of the work which needed to be completed. And of course, significant reputational damage to the Nuclear Decommissioning Authority and its procurement advisors. Not a good CV entry and not a good look for the profession.

Massive amounts of money being spent are no excuse for not getting the basics right.

Thursday, 14 July 2016

Black Box Thinking - book review

How many times have you heard it said "lessons will be learnt" - the mantra often used instead of just saying "sorry, we got it wrong", yet rarely seems to result in any action.  Syed's remarkable book truly addresses, through many examples, the need to learn from when things go wrong.  Syed provides fascinating insights into how different professions tend to address failures, on the positive side, learning and improving, while on the negative side, denial and cover-up. I find myself contrasting this with excuses.

The key message is that if we want to drive improvement and innovations we need be more honest and critical of failures.  We need to understand what happened and what needs to be done differently based on that learning.

Some of the case studies are nothing short of scandalous and yet, I suspect few professionals are entirely innocent. Particularly eye-opening is the example relating to latex gloves and the bravery of the anestistist in challenging the surgeon. The book is also a call for bravery and the need to intervene when it is clear to you a mistake is being made. I will not spoil the book by saying more.

For procurement professionals this critical reflection could address why a key stakeholder didn't seem to welcome your advice, whether a negotiation could have delivered a better outcome, whether the sourcing strategy was optimal, and even if the last interview.  Within the profession we talk a lot about innovation - to me this is a practical book on making innovation happen.

I found the book really easy to read, excellent for the holidays and really thought provoking - it will not be going to the charity shop but added to my 'must keep and re-read'.  I recommend.

Tuesday, 28 June 2016

Thoughts on Leadership - politics, football and procurement

The UK appears to be in meltdown. The Prime Minister has resigned primarily as a result of not being able to bring the UK, as a whole, with him on the Referendum. Now the Conservative Party are engaged in their own nomination process for a leader, to not only replace Cameron, but also to lead negotiations which will bring about an exit (perhaps) from the EU and at the same time unify a very divided country.

Meanwhile in the Brexit fallout, the Labour Party Leader, Jeremy Corbyn, is at odds with his fellow MPs - his Shadow Cabinet have resigned en masse and he faces a vote of no-confidence today which is likely to force a Labour leadership election. Corbyn has stated his intention to be a contender in that election, and, it may well be that the Labour party electorate will return him in spite of the Parliamentary Party.

So between the Conservative and Labour party disarray we can expect a leadership vacuum for the foreseeable future.  

At times like these one may have hoped for some sort of solace in the European Football Championships.  Anyone watching English fans leave the stadium last night, the forlorn look of the players at the end of the match and listening to the dissection of the game by the commentators would be forgiven for thinking how can it get worse.  The team manager Roy Hodgson promptly resigned. I wouldn't know if Roy Hodgson had been a good leader or not - it seems hard to question his credentials in reaching the pinnacle of his profession.

The last week clearly has lessons to be learnt on leadership. But then again I had previously discussed some lessons on procurement leadership resulting from the Harmeston (ex-Coop CPO) case.

One thought in my mind is that leaders do not always have to win to be viewed as successful. Take, for example, the experience of both Northern Ireland and the Republic of Ireland football teams in the Euros, both of whom exited the Euros at the same stage as England. Yet, Northern Ireland and Republic of Ireland fans are in triumphant mood, proud of their achievements. There's is a celebration of leadership. Those leaders instilled a belief of what 'could be' achieved as a opposed to 'would be' - they didn't over promise, exaggerate or understate the scale of the task ahead. Yet they brought people with them - it strikes me that today's leaders, whether in politics, football, or procurement success can only be measured by their ability to win the confidence of those being led and trust that they can deliver the vision.

Friday, 24 June 2016

When BREXIT becomes a reality for procurement

On the 24 April I Tweeted "What will life be like if the result of the Brexit referendum is 51% either way?".  The Referendum result is now known with just under 52% voting for a UK exit from the EU - hardly decisive, yet, it certainly looks as if the claims of the Brexiteers will now be tested. It is noteworthy though that just under 56% of those in Northern Ireland and 62% of Scots voted to remain - so we have a nation divided as well as nations divided!

Already the UK Prime Minister has handed in his notice but even in the remaining three months of his tenure he will wield little influence, after all he brought the Referendum on the UK and has failed to bring even his mates with him. His succession plan also seems to have been ripped up as Osborne also called this one wrong. Who should the EU negotiate with?

In March 2015 I advocated in Public Money and Management "that those working in public procurement policy and practice would do well to consider the 'what if' scenario if the threatened exits from the EU materialise as there would be significant repercussions ... and risk assess the implications for practice". I would be surprised but impressed if we had sight of those 'working papers'. 

But it is not only those in public sector procurement who should have been risk managing a potential exit result - in my opinion every CPO should have drafted a high-level strategy based on the vote going either way. Now those strategies need to be refreshed and risk managed on the potential speed of the exit.

Those who claimed the UK was shackled by the EU procurement rules need to start to articulate clearly what they want to have replaced and what the To-Be will look like. Then there's the range of other EU legislation which had a bearing on UK procurement - it would be useful if a comprehensive list of the existing legislation was prepared and the dialogue started on which should remain in the longer term and which should be either revised to dumped. Of course that which will be suggested for the bin will need to be risk assessed too.

I suspect for many years we will have Cameron's strategy analysed as a case study - should he have initially yielded to the self-inflicted pressure for a Referendum? Should he have negotiated a better deal with the EU as opposed to claiming success? What was wrong with his communications plan?

I also suspect there will be winners and losers in the procurement world, those who manage Brexit well will shine, those who don't may aswell pick up their coats now.

Friday, 10 June 2016

Were procurement voices heard at Bristol's European Green Capital?

I'm sure it will have escaped many of you that Bristol was the European Green Capital in 2015. The Times have just revelled some of the £12m of procurement's involved:
  • £37,000 wiring a tree with a sound and light system activated by falling beechnuts, only to discover that it was predictably going to be a lean year for beechnuts; 
  • £49,200 creating an artificial fog over footbridge;
  • £84,000 for life size wicker sculpture of whales;
  • £5,000 for a guest speaker;
  • £3,800 for pies provided to guests at a launch party;
  • £25,00 for a 'happy cities' survey;
  • £6,000 for a circus group;
  • £18,000 for use of 'Shaun the sheep' image on promotional materials;
  • £1,000 a month for a press-cuttings service.
Now let's assume that proper procurement policies were in place and processes complied with - although we know that often 'arms length' bodies feel they are beyond that.  Let's also assume that there was some benchmarking to ensure that the various deals represented good value for money.

The previous Mayor of Bristol claims the year was a "massive success". Unsurprisingly, others don't agree but is that criticism justified? There must have been a strategy for the year and that should have drilled down to the various event components - those responsible for governance had a responsibility to ensure that was scrutinised and justified and not just 'rubber stamped'. It would have been good if that plan had been published and consulted upon as that would have deflected some of the later criticisms.

It would also have been good if the initiative were subjected to an independent outcome assessment - that would have demonstrated the economic and environmental benefits gained - the ratio of cost to benefits.

As with so many of these types of initiatives money was pooled from various big funders: £1m from the City Council to pump-prime, and that brought a further £7m from the government £3m-£4m from the private sector.  I actually know nothing about the governance structure which was put in place, but to me, Bristol City Council probably came out on top. However, I would like to have seen a pro-rata allocation of influence at the governance table based on the funding provided - those funders had real 'skin in the game' and needed to be clear these were procurements they had confidence in as opposed to rubber stamping, of worse, giving without control. I wonder how many procurement voices were heard at that table?

Friday, 3 June 2016

A new twist on Make/Buy for the NHS - how to avoid the latest drugs rip-off?

I was very late getting to today's Times but when I did get round to reading it I was fascinated to find a procurement story dominating the news: "'Extortionate' prices add £260m to the NHS drug bill". I won't try to explain the whole story but in a nutshell it appears there's a loophole in the NHS purchasing policy which has created a 'get rich quick' opening for a few entrepreneurs.  The opportunity is linked with the selling of patents which are bought from the big pharmaceuticals by comparatively small, clever,  opportunistic entrepreneurs, who are then able to harvest excessive profits from the NHS, etc.  For example, here's one price trend provided by The Times:
For more than five years the NHS in England paid pharmacists £3.77 for a 28-pack 25mg tablets and £5.71 for a packet of 50mg tablets. In July 2014, under [one of the firms using the strategy], the price suddenly increased to £24 and £48 a packet respectively. Eight months later both prices doubled. Eight months after that, last November, they almost doubled again, this time rising to £97 fro a 25mg pack and £154 for a 50mg packet.
The Times suggest that this, perfectly legal practice, is costing the NHS an extra £262m a year for over 50 drugs! When NHS budgets have been unsustainable for a few years it seems odd that the Times uncovered this as opposed to the NHS - what's been happening there with benchmarking prices, procurement strategy and category management?

Now, it would be easy to throw stones at the NHS but I wondered what I would recommend if I was involved in NHS procurement. Of course I have no inside knowledge of what is actually going on but I think I would start with:

  1. Exploring why such price increases have been justified and accepted?
  2. Clarifying why the market isn't working effectively?
  3. Ensuring prescribers only name the drugs in question when absolutely no other alternative is available - pharmacists will have a part to play here? 
  4. Exploring the feasibility of a new model of patenting, and agreement to purchase, with the major pharmaceuticals which ensured that the NHS had first refusal on a transfer of some patents?
  5. Establishing why the NHS, WHO or even the EU couldn't intervene and take on role which the entrepreneurs have - clearly the business case evidence is there?
It does strike me this is another variation of the make/buy decision.  Yes, I appreciate that what I'm suggesting may well be contrary to the prevailing political philosophy but when the money is running out of the NHS 'piggy-bank' surely all options need to be explored.

Friday, 20 May 2016

The risk of unshared service at Whitehall

Few will be surprised at the failure of the Whitehall Shared Service, set up in 2013, to deliver its anticipated savings.  I remember when first being asked to give a view on the tender document saying the major risk would be getting sufficient buy-in from the departments to deliver the benefits.  Sure enough, only two departments have now adopted the 'shared service', four others having dropped out along the way.  You can read the NAO report but, to me, for the initiative to be a success there needed to be leadership, risk management, change management, technical capability of the provider and programme management.  I'm sure the Major Projects regime will have its own view - let's face it the MPA must have to provide some accountability for delivery.
  1. Leadership: who was/is leading this initiative providing a compelling agrument to ensure and the potential user departments stay the journey?
  2. Risk management: How were the risks accessed and managed, particuluarly the risk of failing to deliver the business case, failure to have sufficient confidence in the new solution to shift from the old systems, failure to gain ownership of the departments, and more, to grow the number of users, failure to ensure the provider will sufficient income to 'stay the distance'?
  3. Change management: I fear that like so many of these projects the emphasis will have been on the technical solution and as a result the 'people aspects' will have been sidelined - these initiatives are never just a technical solution, there will be people who need to want to shift to the new ways of working.
  4. Does it work: Of course the technology has to do  what it is supposed to better than the 'old ways' but it also has to remain current and reflect the speed to innovation in technology.
Now those politically and managerially responsible need to have a response plan. Can they learn the lessons, salvage the relationships with those who have 'dropped out' and still make the investment deliver its projected benefits?  For the rest of us we can only learn.

Sunday, 15 May 2016

Dominant power & lethal injection procurement

Back in 2013 I discussed the problems Texas was facing with its death penalty regime due to a supplier no longer wanting to supply. Today there are reports that there are no longer any legal supplies of the drugs at all in USA, after Pfzer, the last remaining supplier, decided to cut supply.

This is a remarkable example of how dominant power impacts on procurement.  While few would doubt the USA has massive buyer power collectively over markets, in this case, the USA have discovered that dominant power can also be with the supplier.

Like yesterday's posting, on Archaeologists, this is another clear example of a bottleneck item. It is also an interesting example of the difficulties which can be faced in finding substitutes.

Saturday, 14 May 2016

For want of an archaeologist ...

I love it when I find a new example of a Bottleneck item - those purchases which are often comparatively low price but of critical importance.  Today's Times yielded one such example which I'm not sure many would have thought of: archaeologists!

UK politicians have made a lot of noise about the need for more housebuilding. In parallel, the HS2 is quite possibly the biggest, and most politically sensitive infrastructure project for some time, for example, it's 350 miles long - you can read more of my observations on its procurement here. The financial cost of each of these initiatives is enormous and logically delays will add to cost and have a negative impact on delivery of the business case.  Politicians accountable for delivery will understandably be a bit sensitive too.

However, before work can actually commence on site there is a requirement in the UK for an archaeological investigation.  The estimated demand for archaeologists means that an additional 25% of these 'Indiana Jones' types are required.

I'm sure you can see where this is going - what's the lead-time to get an archaeologist with the necessary skills trained, was the supply pipeline of archaeologists created in sufficient time, has enough attention been given to attract students to pursue archaeology, how much had been budgeted for the premium costs which may now need to be paid for this scarce resource, has the Home Office thought through the potential visa implications for non-EU citizens who may be required? You get the feel for the procurement, project and programme management risks?

Somebody tell me that this has all been previously risk assessed and mitigated. Do I sense an 'In The Thick of It' moment?  Perhaps. as they used to say of procurement, this is Archaeology's opportunity - but hopefully not at Procurement's expense.

Thursday, 12 May 2016

Anti-Corruption Summit - Is Afghanistan's Procurement Strategy right for others?

Linked to today's Anti-Corruption summit in London, the Prime Minister's Office have published 'Against Corruption: A Collection of Essays.  One of the essays, by Afghanistan's President, specifically addresses procurement.

In that essay President Ghani argues that a failure of individual and institutional accountability is at the heart of corruption; that is compounded by fragmented institutions. The panacea, to Ghani, is strong political leadership:
In fragmented systems, only strong, national political leadership can tackle corruption at its roots. This is because only the top leadership can look across the different areas and ministries where corruption happens, in order to provide an effective agenda for reform. By demonstrating top commitment through positive action, even fragmented systems can build coalition with internal and external reformers.
 Ghani reports that public procurement in Afghanistan suffers from:

  • bid rigging, including, bids received from non-existent companies; 
  • buyers sharing cost estimates 'for a fee'; 
  • conflicts of interest in the decision making process; 
  • coercion of bidders to alter or withdraw competitive bids;  
  • specifying for sole supply; 
  • acceptance of deliveries which are not of the specified quality.
Let's be honest, these are not problems unique to Afghanistan, nor the public sector alone - they are common in many businesses throughout the world and few can be sure they are completely immune or risk free. 

The Afghan strategy to combat the above is "formation of a National Procurement Council (NPC) to review all high-value contracts and the consolidation of construction contracts through two specialised agencies."  The National Procurement Council is chaired by the President himself!  This overseeing is claimed to have saved $350m in the first year.  Ironically we are told though that punishment of those guilty of corruption in procurement has been almost negligible. 

No-one could deny that public procurement in Afghanistan has become a 'top table' issue and I congratulate the President on his commitment.  However, I do question the strategy: 
  1. Responding to institutional corruption through concentrating oversight on a few at the top table, or even two 'centralised buying bodies' is well meaning but the Brazilian President's current predicament may be worth considering and learning from?  What if corruption is at the top?  Perhaps Afghanistan could consider what risk management approach is applied and how there can be independent scrutiny of 'the executive'?
  2. I also think it is naive to think all procurement can be addressed or policed by 'the few'.
  3. I don't actually believe fragmentation of governance is a cause, in fact, the tiered government system of the UK between Central, Devolved and local government may serve as a useful demonstration that it is not. Local democratic accountability may well provide part of the solution.
  4. Ghani implies a culture change is required - how is that actually being addressed and managed?
  5. Simplifying, standardising and automation of procurement processes, led by the Top, is an essential part of the solution, but that has to include clearly defined segregation of duties. That is not referred to by Ghani but perhaps is on the agenda.  
  6. The procurement systems need to be fit for purpose, make compliance easy and abuse hard - better use of eProcurement tools can spread the load and enable the NPC to focus where it is necessary.
  7. I didn't see any mention in the essay of the performance management structure, given that personal accountability is identified as part of the solution. I think that should be addressed otherwise rhetoric and an essay will be the only legacy.
  8. Ghani has implied that the consequences of being caught need to be addressed; I would argue that unless the risks, penalties and probability of being caught outweigh the potential rewards of fraud, bribery and corruption, the Afghan strategy is merely chasing the wind and unlikely to succeed.

I am genuinely impressed that Ghani has been prepared to lead the reform of procurement in Afghanistan, and I wish him well, I look forward to hearing of progress in a few years time. Hold on, what are the plans to review the effectiveness of his strategy?

Friday, 8 April 2016

Design & delivery of a compelling 'Stay In' public information leaflet without shooting client in the foot

Next week we are told every household in the UK will start to receive a copy of a public information leaflet setting out 'Why the Government believes that voting to remain in the European Union is the best decision for the UK'.  We are told the leaflet has cost £9m, including the cost of packaging and delivery (Production: £458,500; Print and delivery: £5.947m; Digital promotion and website: £2.894m).

The initiative is proving, unsurprisingly, to be politically toxic but there are interesting procurement issues too - so if I were the CPO asked to have handled this procurement exercise here's some of the questions I would have asked:

  1. Have we processes in place to comply with the EU Regs?
  2. I assume the business case has been agreed, risk assessed and approved?
  3. Has the 'do nothing' option or leave to the 'Stay in' campaign been fully evaluated?
  4. Do we let one contract for design, one for print, one for packaging, one for delivery, and one over-arching contract?
  5. The budget is separate for 'production' and 'print and delivery', what do we mean by 'production' - is that 'design'?
  6. The design appears to include every other page as a colour picture, given that this is primarily about 'facts' will the additional pages of print and costs directly associated with the pictures be justified?
  7. Has an equality impact assessment been completed on the design?
  8. Are those with special needs accommodated?
  9. Is there any risk that the potential suppliers could subsequently prove to be an embarrassment to the initiative? 
  10. Which elements of the work can be used to showcase UK businesses, SME's and the community sector?
  11. Which elements of the work could be delivered by UK businesses, SME's and the community sector?
  12. What quality of paper is required, would cheaper quality match our needs?
  13. Given that this initiative is being led by the Environment Secretary, will the paper and inks used reflect our aspired environmental credentials?
  14. What are the alternative avenues for distribution which can be subjected to an options appraisal, for example, do we use Royal Mail or its competitors, community sector, local government refuse collection operatives (some may say that would cut out the middle man for many householders and go straight to the bin)?;
  15. Given the Government Digital Strategy, the target audiences, and the Environment Secretary leadership, would a 'soft copy' and making use of social media perhaps be worth exploring more before pursuing a print dominant route?
  16. Will there be costs incurred if householders pursue a 'return to sender' protest and have they been factored in?
  17. Are you sure this initiative is not something we may live to regret?
Almost echoing my suggestions for reducing the cost of organising the Queen's Birthday celebrations, a letter in today's Times must ring alarm bells for those concerned with stewardship of the public purse:

Sir, I doubt I am the only director of a creative agency who would be more than happy to design a 16-page glossy brochure, edit and proofread it, for less than one tenth of the £500,000 of taxpayers' money mentioned in your report.
EDEN PHILLIPS, CEO, Edenco Creative 

Friday, 25 March 2016

Tales of the unexpected, Harmeston & procurement leadership lessons

I do not recall when the professional credibility of a CPO has received as much attention as that of Kath Karmeston (for example,  The Guardian, FT,  and The Times).  Harmeston already had a significant profile, largely through the reputation she gained as Royal Mail's CPO, before moving to the Co-op.  At the Co-op she became responsible for cutting the costs of the >£1bn spent on 'goods not for resale', and The Times claims she was paid £357k a year for that!

However, after a remarkably short stay, say ten weeks, Harmeston and the Co-op parted company. Harmeston decided to pursue a claim of £5.2m for unfair dismissal (I've no idea how that figure was calculated and some would say it was an unachievable negotiating position). Whether intended or not, Harmeston brought the spotlight on herself through the decision to go to the tribunal. You can read the Co-operatives version of the Tribunal here.  Now after almost two months of waiting for an answer, it is reported she has failed in her claim against the Co-op for unfair dismissal.

I am not competent to comment on the legal aspects, and feel a slight discomfort intruding on private grief, but I can have an opinion on some of the alleged practice reported in press - let's remember this blogpost is based on reported evidence and some of the evidence was contested.  Much of evidence struck me as irrelevant to the unfair dismissal case but relevant to the profession and those who would hope to bring about procurement change - it's those areas I discuss below.

We are told Harmeston believed she had uncovered a lack of procurement policy compliance; 70% of the budget. Understanding the extent of non-complaint spend is certainly a good starting position for improvement - understanding 'why' and what to do about it would be an even better position. The CEO though claimed the issues raised by Kath were already known about and Kath had previously been briefed on them. It is always dangerous to claim the glory for uncovering something when others say you didn't - that applies just as much to claiming savings in isolation of the budget-holder's contribution. 

Nevertheless, when the Co-op's head of group risk probed Kath, he concluded that the CPO didn't know the details of the procurement policy. Now given that she was only in post ten weeks, it could be argued that was understandable. What strikes me as unacceptable though was his assertion:
Policy process and governance she defaulted to [her deputy] because she felt it was beneath her. 
Anyway, that was made worse by, Paula Keegan, the former group chief strategy officer's opinion that Harmeston knowingly chose to break the Co-op's procurement policy herself.

I cannot think of any situation when procurement governance should not be a primary concern when seeking to bring about procurement change, indeed even setting the example of compliance.

Perhaps you can already sense the loneliness of the CPO's journey. To me, when you want to bring about procurement change you also need a coalition of allies - the CEO, head of group risk and group chief strategy officer would be useful allies but Kath failed to gain their ownership.


Monday, 7 March 2016

Up on Cloud 9 with the Reform report '(Back to) the Future of public procurement'

I wearily plodded through Reform's report 'Cloud 9: The future of public procurement'. To be honest I think the highlight for me was making me think why on earth Estonia and South Korea were identified as exemplary benchmarks. I was about to compare the respective structures of devolved government and range of responsibilities and what they buy with that of the UK, and even the baseline from which their savings were achieved. Thankfully I stopped.

Sadly, the Reform report really doesn't tell us anything we didn't already know, and have known for at least 20 years.  Yes, we have heard over and over again that skills need to be improved, the benefits of embracing eProcurement, the need for better use of procurement data, a better attitude towards risk, etc, etc.. I could see nothing new there I'm afraid.

Indeed if we go back to the evidence given three years ago, by the then chief honchos of Government Procurement, to the Public Administration Select Committee (you can see an example of my posts at that time here) the mantra used in that evidence was that all these panacea were "Work in Progress".

What the Reform report doesn't tell us, which may help, is how did Estonia and South Korea bring about the change, assuming they did, which seems so illusive to the reform of UK public procurement. Do they hold individuals accountable for the bringing about change as opposed to just accepting "It's a work in progress"?

It would certainly be interesting to hear how the Reform report is viewed by the PASC and whether it acts as a catalyst to review progress since their 2013 inquiry.

Friday, 4 March 2016

In the firing line for buying bendy rifles?

If this were the 1st April I would have thought what follows was an April Fool, but since it is early March we will have to take reports that the Paris police have bought guns which don't shoot straight at face value.

We are led to believe the German army had concerns about Heckler & Koch G36 assault rifles and their unreliable aim in temperatures over 23C - supposedly 50cm off target at a range of 200m when the temperature is 30C!  As a result, the German army has embarked upon a replacement plan over the next three years.

However, the French appear to have been unaware of, or ignored, the German concerns and have just bought 204 of the same rifles as a part of a €17m investment. To make matters worse, it is also said that the French have insufficient shooting ranges where the rifles can be used.

So, some obvious questions:

  1. Were the rifles purchased by brand or performance specification? A performance specification may provide the French with some reassurance?
  2. Is a high degree of accuracy actually required by the French? If not, well perhaps the lack of accuracy isn't an issue unless you're an innocent bystander of course.
  3. Were the rifles bought without considering the potential range of temperatures in which a high-degree of accuracy would be required? It certainly looks as though a warm day in Paris may cause problems and heaven only knows what the consequences of the searing temperatures of Syria would be.
  4. Did the French reduce their exposure to risk by discussing their needs with other users to learn from their experience? If they were aware of the German concerns perhaps they were able to negotiate a particularly good deal to offset the lack of function.
  5. Have the French reduced their risk of a product not fit for purpose by testing a representative sample in the full range of possible scenarios of usage? Maybe the test will provide an opportunity to escape from the deal.
  6. Did the French consider the additional requirements of practice ranges when committing the purchase? Sometimes buyers forget the additional costs incurred in the pursuit of lowest price.
Seems a pity that what appears to have been a rushed procurement with good intentions may be a case of flawed procurement - a faux pas.

Wednesday, 2 March 2016

Lessons for procurement change from the Common Agricultural Policy Delivery Programme

The Public Accounts Committee has just released its report on The Common Agriculture Policy Delivery Programme which could be the basis of an episode of 'The Thick of It' on change management. Indeed The Times uses the wonderful headline: "Civil servants' row with Mr Fancy Pants costs millions".

The report is short so you can quickly read it but some salient points are:
  1. If you want a programme to be delivered successfully you need clarity, consistency and ownership of vision. Those supposedly driving this programme had competing objectives which hampered progress.
  2. Make sure those bringing about the change and the leadership of the organisation to be changed can work together. 
  3. Make sure the organisation is ready for the change. It appears the department concerned were neither ready nor adequately supported in the change.
  4. Make sure the approach is pragmatic. A digital solution was being pursued even though the users lacked the skills and even the required broadband coverage.
  5. Sometimes you need to go native. In this case the mistake was as basic as the change agent turning up in a very formalised setting dressed as if they could have been going to a beach party - the old saying 'clothes maketh the man' may sound trite but sometimes an unnecessary explicit culture clash can be perceived as arrogance and work against success.   
Let's remember that the failure in delivery cost money, £60m.

Are there any lessons for those seeking to bring about procurement change/improvement, yes, don't make the same mistakes!

Thursday, 18 February 2016

Impact of 'no procurement boycotts' Guidance Note?

The UK Government has now published the much anticipated and trumpeted guidance on procurement boycotts. Yes, it's one of those documents all public bodies will now have to risk access.  Time will tell whether it will also be cascaded to those 3rd sector organisations who receive public money, say through Lottery funding?

It's a Policy Guidance Note, so you may well find yourself asking your legal advisors: "what if I decide to ignore the Guidance?" or, getting into the detail, "Does this only apply 'above the threshold'?" - actually I understood that the Principles of the EU applied regardless of the threshold anyway.

Of course all these initiatives are dependent on whether those who view themselves as being 'victims' have the appetite to pursue a case through the courts.  Surely, anyone who has considered themselves wrongfully discriminated against in a procurement process during the boycotts up to now would have already taken a case - nothing has changed as this is only Guidance.

Regardless of all that, it may have been interesting to establish what the actual impact of the boycotts to date have been, for example, has a procurement decision actually been different in terms of its award outcome? If there was no change in a real life procurement decisions, then the boycotts could only have had 'political impact' in raising awareness of the issues - something which the anticipation and implementation of the new Guidance has paradoxically probably been more effective in doing.

Anyway, here's the key statement from the Guidance for anyone who has a interest in political procurement:
Public procurement should never be used as a tool to boycott tenders from suppliers based in other countries, except where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government. There are wider national and international consequences from imposing such local level boycotts. They can damage integration and community cohesion within the United Kingdom, hinder Britain’s export trade, and harm foreign relations to the detriment of Britain’s economic and international security. As highlighted earlier, it can also be unlawful and lead to severe penalties against the contracting authority and the Government. 
I suppose you could also interpret this loosely as: "Public procurement can be used as a tool to boycott tenders from suppliers based in other countries if the UK Government decides it wants to, but that choice cannot be devolved to any lower level of government".  

Wednesday, 17 February 2016

CIPS Cyber Security for Procurement Professionals - a useful eLearning tool.

I have just become aware that CIPS released a free eLearning course 'Cyber Security for Procurement Professionals'  which was developed with the UK Government.

There are six modules and it is available free of charge regardless of whether or not you are a CIPS member.  The suggested time for completing the eLearning is 75' but you will need longer if you follow the various links.

To me the real value is in Module 3; the others are pretty generic cyber security awareness raising, while Model 3 provides really useful specific advice on what the procurement professional should do, for example, including the need for certifications in bids.  I think it also implies the need to give some thought to the implications of cyber security within S2P processes.

On the downside, there is some infuriating background music - turn it off. The 'Knowledge Check' questions are the end of each module are so basic they are of questionable value. Disappointingly, I found when I followed some of the early document links I ended up having to completely restart the tool as opposed to picking up where I left off.

Nevertheless, I think this is a useful CIPS offer and would recommend it be included as a 'must do annually'.  I wonder why it is not behind CIPS member only firewall?

Saturday, 13 February 2016

Junior Doctors, the EU Referendum and procurement change management lessons

I honestly don't know who is right in the current NHS change management crisis with the Junior Doctors. Imposing the new contracts can only be viewed as a failure but it is also a symptom of the bigger failure of change management or mis-management. I suppose there are questions as to whether imposing contracts is even legal; like many of you, I have been the victim of having changed employment and pension contracts imposed on me - that did not make me feel good. There is of course no doubt that the NHS is in a crisis and the resolution of the Junior Doctors issue will set a precedent for future negotiations way beyond those with the Junior Doctors.

There is also a precedent for the current chaos - remember the communications debacle relating to The system was to improve service but the communications management was lousy.

The reason why I do not know whether Hunt or the Junior Doctors are right is very similar to the debacle - the NHS communications setting out the current 'As-Is' and the future 'To-Be' has been abysmal. Those 'anti-change' have usefully played on emotion and fear. They have also managed to successfully infiltrate almost every one of the discussions on BBC Question Time for some weeks - the equivalent of the Greek Agora, the Roman Forum, and the works' canteen - the dessenters voice is very definitely the clearest and the loudest.  I ask myself why the NHS have not set out, in very simplistic terms, their case for change, perhaps on a webpage, a full page advertorial, or even a televised debate - that also needs to debunk the supposed myths of the BMA.  If that happened I could make an informed decision. If they really wanted to be aggressive they could also 'un-deify' the Junior Doctors - easy enough if you started to discuss the various NHS failures and how they could be linked to the problems the new contracts will overcome.

Of course the NHS' 'Junior Doctors' communications fiasco are only a warm-up for the EU debate - we can expect emotion and fear to dominate. We can expect communications to be poor - they already are.

So what about lessons for procurement? Well, if you want to bring about procurement change, the Junior Doctors crisis may serve as a useful warning:
  1. Make clear, again, and again, and again, what the benefits of the 'To-Be' and how they address the problems of the 'As-Is';
  2. Understand the negotiating power of those involved;
  3. Understand the fears of those who will and could be impacted;
  4. Address head-on the criticisms of the dessenters - some of their concerns will be justified, some will be nonsense, and some just scaremongering;
  5. Remember that new systems and processes are not inanimate, they are concerned with people and it is people who will determine the effectiveness of the outcome;
  6. Bring people with you, including those right on the periphery.

Thursday, 11 February 2016

What can we learn from Deloitte's procurement leaders?

Deloitte have now published their 2016 Global CPO survey
which is worth a read and perhaps even using as a benchmark. Remember it isn't a state of the world but based on the views of an abnormal sample of 324 procurement leaders. Nevertheless some key findings jump out at me:

  • Cost reduction remains a key business strategy for the next 12 months for 74% of the respondents. I do not think it is fair to assume that the other 26% do not see cost reduction as a strategy, but perhaps the question was misunderstood and answered from the perspective of primary objective?
  • 62% of 'procurement leaders' believe of their team do not have the skills to deliver the procurement strategy. While we all know there is an overall skills deficit, what concerns me here is why CPOs would be producing a strategy which they don't have confidence can be delivered - a good CPO will recognise the constraints of people and produce a strategy shaped by those limitations. Of course a good procurement strategy will address skills development too. (As an aside I expect to pick up on the issue of producing a unachievable procurement strategy in a future post so keep watching)!
  • 40% have a clear digital procurement strategy addressing cognitive analytics, crowdsourcing and digital reporting - aka 60% don;y have a strategy! 40% appears to be surprisingly high to me and when I consider only 16% are engaging through the use of social media and 42% with mobile technologies, I suspect there is a misunderstanding of what a digital procurement strategy should comprise (see my white paper)
  • Given the recent procurement disasters the suggestion that only 25% are 'fully involved in the management of risk' is not only disappointing but a bit scary, remember the respondents are 'leaders"!
  • While I frequently hear claims of high procurement influence over spend, the report appears to contradict that, for example, only 66% involved in make/buy decisions. Now if you are a procurement leader and 34% of make/buy decisions are passing you buy - big spend decisions - while I think you may well be honest, how on earth do so many of the 'procurement pack' claim they've influence over ≥ 70% spend?

Sadly, the report didn't pick up on many of the indicators of leading practice I discussed before, but my big lesson is, there remains plenty of opportunity for procurement to improve procurement contribution but first we need to be honest about where we are at the present.

Tuesday, 9 February 2016

Have the NAO got it wrong on gifts & hospitality?

I read the National Audit Office report on the 'Investigation into the acceptance of gifts and hospitality' with interest but have to say I am mystified. While the EU and United Nations are against the receiving of gifts within a procurement context, the NAO appear to have come to a view that:
While barring UK officials from accepting gifts and hospitality is an option, it would run the risk of hampering the legitimate activities of the departments and officials, including engaging with stakeholders.
How could the refusal of a gift hamper (excuse the pun) business? I am also mystified at the lack of explicit recommendations.

Hospitality and gifts are only targeted at those who are likely to have influence over a decision, and there should be no 'ifs' or 'buts', they are offered to distort decision-making. Of course, the NAO have referred to avoiding perceived conflicts of interest - sorry perception of hampering business is unavoidable when gifts and hospitality are received in the procurement process.

Let's also remember that any gift or hospitality offered is not free from cost - that cost has to be recouped from somewhere and in all probability is an overhead cost included in all public sector contracts.

So what were the examples of gifts received:
These included: tickets to professional sports and cultural events, sometimes accompanied by a spouse and/or children; bottles of champagne; wine for a team’s Christmas lunch; iPads; Fortnum & Mason hamper, a painting valued at £300.
That list is of course constrained by the fact that the systems for recording gifts are not robust and not adhered to anyway.

I didn't pick up anything which specifically addressed staff involved in procurement, but let's remember that if they are MCIPS/FCIPS the CIPS Code of Conduct applies.

Regardless, I think the NAO have missed a mark on this one, a robust approach to the acceptance of gifts and hospitality is not just about the perception of conflicts of interest, it is about protecting staff from potential allegations of bribery and corruption - it should not only be a risk management issue but a health and safety issue too.

Monday, 1 February 2016

A bizarre approach to procurement of social services in Northern Ireland

Sometimes I hear a news story relating to public procurement and just sit back mystified. Tonight it was announced that the independent social care sector in Northern Ireland will receive a 'no strings attached' £1.6m gift from the public sector, a 2% increase in the rates Trusts pay to private sector providers.

The aspiration is said to be that the increase will help in recruiting staff, yet whether or not the private sector providers decide to use the additional money in that way is entirely their choice.

It is great that the NI Health and Social Care Board have decided to plough more money into care, but let's remember that the care packages offered to families in Northern Ireland are not remotely similar to those offered elsewhere in the UK and, as a result, many families have to cover care costs which they wouldn't have to elsewhere. I suppose you could argue that 2% increase would reduce costs paid to self-funders, but is that the case?

However, if we look at this purely from a procurement perspective:

  • If the objective was to help with recruitment costs, why was the money not made available with the explicit requirement that it would directly flow into staff pay-packets?
  • Then again, why should the money be passed to private sector providers without any regard to the profits being made and retained by the providers? Would it not have been more prudent to consider how each provider currently manages their business?
  • How does this look to other businesses, particularly family run businesses, which have seen a reduction in their own 'take home pay' while trying to avoid pain for their staff?
I'm sure this was a well intentioned initiative, but perhaps it could be better managed.

Saturday, 30 January 2016

Grossly excessive fees?

There was a fascinating story in yesterday's Times  and Mail online on a leading surgeon being referred to the General Medical Council for charging "grossly excessive fees". £12m was charged to a member of the Brunei royal family for breast cancer treatment.

If the report is correct, it begs a number of questions:
  1. Do the GMC have policies on fees?
  2. What constitutes "grossly excessive"?
  3. Is there a difference between "grossly excessive" and "excessive" fees?
  4. What constitutes fair and reasonable fees?
  5. Would the view be different depending on whether or not the treatment was effective?
  6. Does the relative value to the recipient have a bearing on the view?
  7. Did the recipient have the option of an alternative provider?
  8. Is there ever a situation where the surgeon is paid by results?
  9. What's the GMC's view on fees charged to private patients in the UK by comparison to those a surgeon is paid by the NHS for like-for-like treatments?
  10. Should the principle of accountability and unacceptability of charging "grossly excessive" fees be applied to other professions?

Friday, 29 January 2016

Learning from the failed procurement strategy of reforming legal services procurement

Finally the government has faced the reality that success was unlikely in the dispute with the legal profession and have aborted their plan to cut layers legal fees. I have discussed this daft procurement strategy for years now and why it was unlikely to be successful.

Face-saving is of course required and it was probably easier for Gove to draw a line under this than his predecessor, but let's pick up a few lessons:
  1. Pick your fights carefully - the legal profession is an oligopoly who understand the law, relative power and dependency. Without a means of redressing that imbalance, failure could be predicted;
  2. If you are going to consult with the market, listen. While there were great promises of consulting with the legal profession, the failure to take on board the messages of the market did not appear to be listened to.  Making a sham of market consultation ultimately reduces confidence and trust in the process;
  3. 'Cutting and pasting' one type of sourcing strategy to another category is just stupid - larger contracts and a lowest price pursuit may make sense in some situations but definitely not all;
  4. Procurement risk assessments are important - it would be great to hear how the MoJ identified and planned to mitigate all the risks associated with this procurement strategy and how political and reputational risk were being mitigated?
It would be really interesting to carry out an impact assessment of the UK government procurement strategy over the last 10 years, say, and establish which worked and why; having said that, it may well be that is a comparatively short list compared to those which didn't work.

Sunday, 24 January 2016

The mystery of CIPS Life Honorary Membership

We have previously discussed CIPS' License, and even Chartered Status, but I only recently became aware of CIPS Life Honorary Membership. 

My awareness started when one of you shared with me their intention to leave CIPS but only decided to remain when they were offered free lifetime membership - I don't want to share the details of those particular circumstances, but my friend's understanding was that the offer was made due to the number of years they'd been a CIPS member. 

Now I've been a member since the 80s so I decided to enquire about eligibility.  

As many of you will know I have been a great supporter of transparency of the procurement process and have advocated stating award criteria beyond the requirements of the EU Regulations. It strikes me as just good practice. I would have thought CIPS would have advocated a similar approach to transparency. However, when I wrote to CIPS I received this reply:
Thank you for your email. I must advise that you are not eligible for life honorary membership. I cannot advise the criteria for this membership but I recommend you email again with your query in a few years.
Of course, that was like waving the proverbial 'red rag to a bull', so I challenged the 'secrecy' and it was reiterated: "As advised I am not able to discuss the criteria", and subsequently:
Life honorary membership is rewarded on a discretionary basis and is not automatically awarded. There is no fixed criteria and each case is reviewed individually.
I'm not sure if CIPS meant to say 'rewarded' but exasperated by CIPS lack of transparency I said I would use my blog and try to establish others awareness of the process. Here's what they said:
I am sorry that you feel disappointed with the information that you have been provided.  Reading through the previous emails it appears that you have been led to believe that Life Honorary Membership is something that our members are entitled to after a certain period of time.  All I can do is reiterate what my colleague has told you that this is not correct and that this is a discretionary award on a case by case basis. I appreciate that you wish to blog about this, however I must stress that we are the team who handle these enquiries and as such are the experts in this area, any information gathered from other sources cannot be treated as reliable.
Using the shield of "we are ...  the experts in this area" echoes the criticism levelled at the profession many years ago when buyers refused to demonstrate professionalism in contract awards which only led to cynicism and suspicion.  

Equally, while information gained from a blog may not be reliable, CIPS isn't prepared to provide any clarity at all.  Let's remember that CIPS membership fees must subsidise this cabal and its beneficiaries.

I don't know about you but that leads me to ask: who decides there is a case for Life Honorary Membership, who are the Life Honorary Members, and, given the lack of any fixed criteria, how can we have confidence in the process? A straw poll of members with over 25 years MCIPS/FCIPS membership indicates few are even aware of the category of membership!

So, if any of you can provide the clarity which CIPS can't/won't provide on the dark secrets of CIPS Life Honorary Membership, I'd love to hear? It would be better that we had the transparency of a professional organisation than the perception of application of the black arts.