Marvel at the superheroes of central government procurement once again

Today's Business Section of the Sunday Times carried an interesting piece on the work of Bill Crother's in central government - he has clearly taken on the mantel of a superhero. What caught my eye was Crother's statement: “Where we have come from four years ago, we’ve made great strides, but there’s a long, long way to go.” 

I do not deny that significant progress may well have been made, but what I think we are all due is an explanation as to why the situation was, and continues to be so bad? When I reflect on the last 20 years we have had many in central government also implying they were procurement superheroes and often adopting quite an arrogant stance telling the NHS and local government 'how to do it'. Where are they now and what dod they actually leave behind - if Crother's is right, a mess. I will not start to name the names, but surely there is a need for some 'calling to account' as to what they actually achieved from their lofty positions - was it all rhetoric? It would be quite easy to do a trawl of Supply Management, for example, and read the how the superheroes of the past were going to sort out public procurement. They were held up as exemplars but never fell. They were never to blame, but sorting out a mess they had inherited! Sound familiar? 

As I see it we are likely to see this repeated over and over again because there does not appear to have been any meaningful performance management system which the incumbents answer to, nor any retrospective personal accountability. Call me a cynic, but before you do, tell what's actually changed over the last four years and how the latest superhero will be called to account?

Procurement policy, hubris and the cloak of invisibility.

I suspect this week is not the best time to discuss the Christmas Party at CCS given the press attention to IT procurement. Saturday had an excellent feature in Times2 on why government IT projects go wrong, then today's Times had four separate pieces on the Aspire Debacle, for example: here.

To me the big issue isn't yet another IT procurement debacle, it's the issues of procurement policy, hubris and invisibility . 

The political leader of UK government procurement, also famous for his Jerrycan approach to 'bottleneck purchases', is Francis Maude, the Cabinet Office minister. Earlier this year he decreed that IT procurement policy was that there would be no contracts over £100m - small was considered beautiful regardless of the risks!

Now in spite of a long history of not implementing procurement policy, it seems this 'small is good policy' is going to break the mold and actually be implemented by splitting the major HMRC Aspire project into smaller contracts. I need not join the chorus of those who argue this is high risk, but included in that chorus are some notable voices from the CBI, Public Accounts Committee and Public Administration Select Committee.

A Cabinet Office spokesperson is reported to have said though "HMRC intends to break this contract into packages which is entirely in line with our new approach and will ensure competition from the widest possible  range of suppliers". There is no admission that this may be a demonstration of procurement hubris or even stupid sourcing, just that it is in line with policy. Nor was there any confirmation that discussions with the market have provided confirmation that SMEs will indeed be willing and able to bid! 

Nevertheless, since it's in line with policy, it must be okay? What we have not heard is the voice of the Government's CPO providing an endorsement for the procurement approach. Does he agree with it in this particular case? Does he disagree with it but can't publicly say that? Does he believe that in spite of the accepted positioning of such an IT procurement as 'strategic' within a Krajic model, he has a better recommended strategy which the rest of the 'procurement pack' have yet to see? Then again, what about the Major Projects Authority - haven't they a role in disaster avoidance or do disaggregated contracts of less than £100m avoid their radar?

There's another interesting quote from an HMRC spokesman: "We will renew our IT contract within Cabinet Office guidelines and on time."  Is that a buck passing statement to the effect that if it all goes wrong the HMRC only followed Cabinet Office guidelines? The pedants among you will of course have noticed that the only commitment is to delivery of the 'IT contract ... on time' which does not necessarily mean the actual functional delivery of the service being procured. Isn't it wonderful that the project is called Aspire! 

NHS Procurement Tsar meets the Fat Controllers.

The NHS' new procurement tsar looks as if they may have an interesting first challenge - working out
a procurement strategy for 'fat clubs'. The National Institute of Health and Care Excellence (NICE) has endorsed three providers who can deliver, what appears to be, NHS funded places at 'fat clubs'.

The challenge now is how the Tsar will approach the procurement of 'fat clubs' to maximise the purchasing power of the NHS.

With only three providers operating through a network of local clubs we should see some interesting procurement questions answered.

1. Are the local providers endorsed by NICE?
2. Who would be the contracting bodies - the national or local providers?
3. Will payment by results be used?
4. Will the providers collude and carve delivery?
5. How will alternative providers respond to potentially be excluded from delivering the service as they don't have NICE endorsement?
6. How will the EU procurement rule be complied with?
7. Somewhat tongue in cheek, will we see a lean approach pursued?
8. What evaluation weighting will be used?
9. Will the Tsar be able to shape up?

Procurement Tsar for NHS

The Health Secretary has announced the NHS will have its own Procurement Tsar. The Tsar will be responsible for a new 'central list' of hundreds of items, harnessing the purchasing power of the NHS - those of you with reasonable short-term memories will recognise that is not a million miles away from what PASA created and it seems to echo some of what the Crown Commercial Services aim to do too.

Will the Procurement Tsar report to the Health Secretary or Francis Maude?

We all know that the problem is not setting up 'central lists' but in changing the culture so that the lists have the ownership of users, particularly clinicians. I'm not clear who the Tsar will be, but they will need to have remarkable influence, change management expertise, leadership and tenacity. Will they also need to have procurement expertise or will they merely act as champions?

Will the Health Secretary act as the primary champion of the change and the Tsar take on the role of 'enforcer'?  I don't think we've had such a Tsar in the past and it will be interesting to observe, not only who is appointed, but the strategy they adopt - will it be a carrot or a stick?

Of course the Tsar could claim an easy victory if they chose their battles with adminsitrators as opposed to clinicians. A 'central list' which includes toilet rolls, reams of paper, printers, laptops, water coolers, etc., would still be a 'central list' but the Tsar will need to demonstrate success in the areas which have been most resistant to change over the last 20 years otherwise they can expect a short life and difficulties in justifying their own value for money.

If they are successful we can expect a new model for public procurement - I wonder will they need the CIPS Licence too?

Are 21 Crown Representatives an indictment or a solution?

The 4 March announcement of an additional six Crown Representatives means the UK government are relying on a cohort of 21 part-timers to address, what the Financial Times refers to as, Whitehall's "insufficient civil servants with the commercial skills to [manage outsourcing contracts]".

Now let's be clear, outsourcing is not remotely new and there has been major outsourcing in the public sector for many years, but the most recent trend probably dates back to CCT of the 80s. So, let's  say the UK public sector has 25 years of outsourcing yet are not perceived to have developed sufficient skills! How can that be?

Right at the core of Gateway Reviews, PRINCE2 and MSP methodologies are questions relating to whether the client has the skills in place to effectively deliver the project/programme. So how on earth did so many of these 'problem' projects navigate the QA' system without demonstration of the required skills? Is this indicative of a deficiency in the systems as well as the people?

Bill Crothers, the Chief Procurement Officer, justifies the Crown Representatives by saying:

Our Crown Representatives are bringing in top business acumen into Whitehall - our procurement reforms saved £3.8 billion last year and we want to go even further.

The problem is that we just can't differentiate between the savings which are directly attributable to Crown Representatives and those which are attributable to the cohort of commercial senior civil servants. Having said that, I'm sure there are some senior civil servants going through the appraisal system at the present time, claiming that much of the savings the CPO cites are solely attributable to them.

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.

Is putting on the Ritz compatible with centralised purchasing change management

Some of the greatest challenges which face procurement have been how to put in place collaborative purchasing arrangements, avoid maverick buying and ensuring adherence to  corporate framework agreements. We heard yesterday that the Crown Commercial Services are making use of outside support and one of the areas of help is centralised buying. We're also familiar the preciousness of identity, for example, the difficulties of getting England's 43 police forces to agree on a common specification for white shirts - a problem which the Gershon Review highlighted a decade ago, yet still persists.

Part of the problem is that individuals like to suggest they are in such a position of power and in that position they have the the freedom to exercise choice by opting to step outside what is okay for others - what is good for the goose isn't always perceived as good for the gander. The problem is also actually about change management - you need a compelling justification for the 'corporate deal', you need to have brought key stakeholders with you and won their heads, if not their hearts, and you need clear and consistent leadership by example. If you can get the Chairman and CEO to use the corporate deal, for example, for travel policy, you're well on the way - if you can't get them to adhere, then all sorts of excuses, justifications and exceptions start to materialise.

So given that CCS hope to get greater adherence for their bulk purchasing better buys, today's revelations in the Times that the Chancellor has opted out of lower cost (free) accommodation at 'The Ambassador's' and instead chosen to stay in private hotels (£289.97/night) is either a a threat or an opportunity for their strategy.

NHS getting ready for another procurement scrub

I found the news in today's Financial Times that the NHS is in talks regarding the future of Commissioning Support Units an interesting brain teaser - what would I do?

The 19 CSUs were set up last year to support the Clinical Commissioning Groups (CSGs) in designing health services, providing back office computer services, payroll and procurement services. Now NHS England is considering the options for their future. Yet, it appears it's the CSUs who have to decide on their own future - how will that work and what freedom will they have to plough their own furrow?

Anyway, it does seem strange that there wasn't a clear strategy when CSUs were set up as opposed to 19 CSUs starting to deliver services and then debating their future so soon.

The usual outsourcing organisations could bid for all or part if the services, but is the current environment (e.g SFO now probing tagging contract) likely to be conducive to productive discussions when the government seem to lack confidence in so many of the providers and also the ability to successfully contract manage?

Alternatively, could the CSU services be provided through the contract let recently for government shared services? That may be difficult since it didn't appear to be in scope. One could of course ask why it hadn't been included in the scope?

Could the Crown Commercial Service provide the procurement aspects? It seems odd that the CCS would allow independence of such a vast amount of spend so early in its life, but then again why haven't they been providing the procurement services up until now, and if they have, have they failed to win over hearts and minds?

Should the NHS aim to let one job-lot contract for the whole of the 19 CSUs and, if so, how will they shape the contract? If NHS England went down that route, how would they avoid being held hostage to the provider? How would they gain the ownership of the CCGs?

Could each of the CSUs become a centre of excellence and each deliver a specialist shared service to the others, say one CSU leading on payroll and another on procurement?

If theoretically it was possible for CSUs to become centres of excellence, with the sole aim of supporting CCGs, why couldn't the CCGs 'cut out the middle men' and just agree among themselves which of the CCGs would become centres of excellence?

Would my position be different depending who I was advising? Well, I think to be honest, if I were in a CSU or one of CCGs, my inclination may well be to let all the others sign-up to a central deal and then use that as the starting position to get better deals from those who were unsuccessful in winning the main contract. When you compare the classic Prisoner's Dilemma scenario doesn't it sometimes make sense to actually avoid collaboration and standalone in procurement?

Well, it gave me something to muse on during this morning's flight in the absence of the facts - what would you recommend?

Be wary of price comparison sites

"I'm very wary of the comparison sites because they are all gamed .."

It will hardly surprise you that those are not the words of a furry meerkat or the lyrics bellowed by some torturous moustachioed 'tenner'. However, I suspect it may well surprise you that they were the 'off-the-cuff' remarks of the Chief Executive of the Financial Conduct Authority to parliament yesterday. It will also hardly surprise you that the FCA quickly tried to distance this 'personal view' from that of the organisation.

Off-the-cuff remarks have made the news quite a bit recently and you may question how much credence should be given to them. Yet it strikes me that this particular remark, unlike a sanitised press statement, is probably closer to what the FCA Chief Executive actually believes and practices, than the more diplomatic rhetoric. So if the CX is wary of 'comparing the market' perhaps there is really some cause for concern.

In my private life I honestly haven't used the sites but I do carry out my own market research online and value the ease of access to information from the internet - yes, that approach helps me beat the price comparison sits in achieving the best deal for me.

But let's think about the mantra that greater transparency of actual spend data improves public sector efficiency as a result of 'empowering the armchair auditors'. As someone who has tried to interrogate some publicly available public spend data, I don't believe for one minute those publishing the data pay any more than lip-service to primary objective. I view it as the victim of obfuscation, protectionism and defensiveness. Think 'turkeys and Christmas'. Yet the aspirational transparency brings a cost paid for by  the very armchair auditors who don't appear to be using it in droves. Therefore,  I would really like to see the evidence that the desired outcomes of the 'transparency' have been achieved.

However, as a procurement practitioner I am also wary of the procurement version of price comparison sites.

The greener grass of the Crown Commercial Service

We know two things: firstly, that the grass is always greener on the other side, and secondly, a bad workman always blames his tools. That's how I see the announcement of the Crown Commercial Service (CCS) - it is not the panacea to public procurement problems in the UK but a convenient placebo to buy time. It looks like a good idea but when we eventually get there, where we came from can be expected to look greener than where we have arrived.

There is no perfect organisational structure for procurement, just the most appropriate set of trade-offs for a given time. I have absolutely no doubt that if we had a centralised procurement structure at the present time, we would have just heard an announcement that decentralisation was the answer. Quite simply the grass will always be greener on the other side and the tools of the 'existing structure' are easy to blame for current failures (in this case the structure).

But more fundamentally, what is the problem we are trying to solve at the present time?

Are we seeing the green shoots of a recovery or looking at a deteriorating economy? Let's give the economy the benefit of the doubt and say we're looking at recovery - I don't think centralising will accelerate the recovery and remotely help small businesses or investment. We don't have enough organisations who are likely, at the present time, to satisfy the qualifying criteria for the 'bigger is better' contracts we can expect from the CCS.

But then think of the policy objectives the CCS will be asked to deliver - it does not strike me we have  a consensus view of of what procurement aims to achieve at the present time. For example, is it cost reduction or wider social objectives? Without that clarity what are the outcomes CCS should be measured against? Even if there were that clarity at the present time, by the time CCS hits the road we will be starting to see the warm-up routines for the next election - should the objectives be set for the recovery and can they be flexible enough to reflect a new government's manifesto?

Is there a readiness to change? How on earth could any causal observer of public procurement believe there is a readiness to change to the CCS at the minute. We continue on the hamster's wheel of making little progress on winning hearts and minds towards more collaborative procurement. Until the stakeholders hearts and minds are won, all we can expect are 'work arounds'.

Have we the skills? Well we know there are issues with contract management, but that could be solved without CCS. Would it not be better to get on top of contract management before you make the contracts bugger? Even if we got on top of contract management, we have almost no evidence of effective risk management and performance management - getting bigger is unlikely to cure that, on the contrary just magnify the detrimental impact.

I could go on but that doesn't strike me as useful, really what I'm trying to say is that we can make any structure work but we need to recognise there is no perfect structure. We can make any structure work but to do that we need a clear vision and leadership, and clarity of the outcomes to be achieved. We can make any structure work but to do that we need the right culture and skills. We can make any structure work but we need a readiness to change, excellent stakeholder engagement, change management, risk and performance management. Yes, we could make CCS work but at the present time the key ingredients just aren't in place nor are they likely to be within the envisioned timescale. We could make CCS work but history suggests it won't unless we get the foundations in place - but then if we got the foundations in place would we even need the cost of changing to CCS?