Indian helicopter vision on the need for procurement procedural ownership

Some months ago I discussed some of the lessons from the plagued Indian helicopter procurement - it has now emerged that procurement procedures were not adhered to. To me it is one of the fundamentals of good procurement, even though it doesn't seem very strategic, that you have pragmatic procedures which demonstrate probity, gained stakeholder ownership during their development, are effectively communicated, and then performance managed. If you cannot get those basics right then it doesn't mater how strategic your aspirations are for strategic recognition, the foundations just are not right.

So why is procedural compliance such a problem? The Indian Helicopter procurement, Stoke City Council, Serious Fraud Office, Lancashire County Council, and the Housing Executive in Northern Ireland are just a few of the recent discussions where procurement procedural compliance appear to have been flawed. It is almost irrelevant whether fraud and corruption took place if you have not adhered to procedures - non-adherence to procedures will always leave you perceived as doing wrong.

My suggestion is that the core lessons here are check the procedures are fit for purpose, make sure they are understood, and then performance manage. If you don't you may be the next case study.

Learning from India's $750m helicopter procurement

It is sometimes useful to learn from international public procurement. We've looked at the Indian procurement of fighter jets in the past, but today provides another interesting opportunity. An opportunity for one simple lesson and something which may be transferable to the horsemeat saga. What also makes this story interesting is the sheer scale, $750m and the involvement of three countries, India, Italy and UK.

I'm not going to bore you with all the details as the key facts are easily found on the web, namely, big contract, suggestions of corruption in the award of the contract, and contract put on hold.

No, to me, what is much more interesting and provides the key lesson relates to the specification. If the informative Flightglobal is correct, the procurement process started in 2002. At that time the specification requirement for the helicopters to fly at 6,000m could only be met by one bidder. The Indian MOD however had the good sense to stop the procurement process and change the specification so that the operable height requirement was only 4,500m. This in turn meant others could bid.

I have long lost count of how many times I have seen specifications written in such a way that there is only one potential bidder. But I would not need very many fingers to count the occasions I have seen steps taken to establish if that single bid represented value for money - in other words ensuring that 'price is right' and forensically probing the justification for such a proprietary item. I can only assume the Indian MOD, in response to the first procurement round asked something to the effect of:

"Let's revisit this, on how many occasions would we require a helicopter to fly at 6,000m, do we need all the helicopters to fly at that height or just some, how much money could be saved and functional capability compromised if we reduced the flying height?"

That strikes me as a fairly reasonable set of questions to ask. Hold on though, why weren't those questions asked prior to going to the market the first time?

However, there is another piece for us to get our teeth into from the subsequent procurement process (the one currently on hold) and think review in the context of the horse meat fiasco which is currently seizing the UK.

The new helicopter procurement included an interesting integrity commitment to:

"take all measures necessary to prevent corrupt practices, unfair means and illegal activities during any stage of the bid or during any stage of the bid or during any pre-contract or post-contract stage."

Now, if such a clause had been inserted in all the food chain contracts which have been the discussion on horse meat, would we be faced with the current problem? I don't know but it is interesting to speculate.

P.S. 20 February 2013: All flight tests were held in the UK, in violation of all norms of the Defence Procurement Procedure (DPP) that makes it mandatory for all trials to be held in India.

Fighting about Indian defence procurement

The world is certainly richer for discussions on Indian defence procurement.  Recently I tweeted a bizarre report from the BBC on significant delays to Indian defence procurement which were likely be the outcome of an unsuccessful challenge over the age of one of the generals.  Separately I questioned how the Eurofighter consortium, of which the UK is a part, could be readmitted to the bidding.

By way of an update, the UK are part of a consortium bidding to build 127 fighter jets.  The bid is worth £7-10bn (reports vary) and if the UK bid isn't successful a thousands of jobs are at stake.  At the start of the month it was reported that the French (Rafale) were the preferred bidder and the UK bid would progress no further.  Cameron wasn't happy, claiming that the Eurofighter bid was lowest, it was unfair that we were out.  Cameron planned to do all in his power to get the Eurofighter bid readmitted to the competition.  I questioned how that could happen and the potential political and procurement implications of the readmission.

Yesterday, it was reported that all is not well with the Indian negotiating team. It appears that two of the senior officials have now gone public stating

Wiggle room for revisiting public procurement decisions

How much wiggle room is there in public procurement processes?  I was fairly sure that I could have mapped out the key steps of a public procurement process – particularly when you reach one-way valves in the system which prohibit a return.  However, I admitted a few weeks ago I couldn’t grasp how the MoJ had been able to add a home bid into a previously agreed shortlist. 

Today I’m also asking myself, how could that happen?  This time the UK are convinced that they have scope to regain entry, after being excluded, to the bidding process for the Indian government’s procurement of £10bn worth of fighter jets.   France are the now the ‘last man standing’ in the procurement negotiations.

What could possibly have gone wrong that the UK bid isn’t through to the final stage? Although we have yet to hear what the debriefing will reveal, included in the suggestions is