Pirates of the Specification

Buying ships shouldn't be such a big deal if you've a legacy of being one of the great naval nations of the world; you'd have had experience of buying ships to cope with the ice of the Antarctic and the dealing with the Pirates of the Caribbean. Therefore, for many it will have come as a surprise that £1bn of warships are breaking down in the Gulf since the water is too warm, leaving crews vulnerable!!!

The contractors claim the MOD didn't tell them about that particular potential usage, even though the UK has been engaged in flighting there since 1990, if I am correct, and in truth we could go back centuries. Have the MOD locked themselves into a strategy which requires a portfolio of ships which can only be used in restricted climates?  If that was the case, the old news stories of warships being redeployed from various parts of the globe to potential conflict areas will be no more, for the simple reason they wouldn't work.

Setting that aside, now it looks as if a refit of these particular Destroyers will be necessary.  

I assume the courts will have to decide who picks up the cost but already it looks as though the contractor is trying to escape liability by resorting to the technical specification set out by the MOD - in other words Rolls Royce complied with the letter of the specification so it's not their fault: 

Are the conditions experienced in the Gulf in line with that specification? No, they’re not. So the equipment is having to operate in far more arduous conditions than were initially required (Tomas Leahy of Rolls Royce).

I assume we will hear eventually if the MOD used a solely technical specification, but this must serve as a warning to all those who do that using a solely technical specification shifts the burden of functionality to the buyer. To me there will always be a basic need for technical specifications but they need to be accompanied with functional and performance specifications; and when a service is involved, outcome specifications.  It certainly looks, at face value, as if the MOD set aside the functional and performance aspects, and, if that is the case, why?

But there's another question here, what about all the talk of supplier partnerships and innovation transfer - was that a one-way street from the MOD to the market without reciprocation? The relationship between the MOD and its strategic partners now looks as if it has suffered a major set-back and will take some time to recover.

To me there is one lesson for all procurement professionals here: never resort solely to a tec spec.

Strategic procurement programmes: Before and after

We're all familiar with the 'before and after' images which so often paint a picture that suggests 'after' is more attractive than 'before'. If only that were the case with strategic procurements.

After years of 'before' trumpeting the anticiapted aspirational success of the NHS National Programme for IT, a programme which appeared to be the offspring of political egotism, the first signs of faltering, and the cosmetics of a name change, now politicians want answers:

"There has to be a reckoning. We have to know how much money has been squandered and what could have been done instead."

"If the people letting the contract have made a catastrophic, gargantuan mistake then there is an opportunity cost. It is the taxpayer who has to fork out money for what should have been spent n services they need."

To me the NPfIT was clear who was leading and the governance structure to be used. But back in 2011 I asked what happened to the application of Gateway Reviews on the Programme. Of course MPs received NAO reports on the Programme's progress too - they were not ignorant of the risks.

So when the Public Accounts Committee and the Public Administration Select Committee sit down looking for answers, I hope they start by considering their own role in oversight - didn't they have a responsibility to the electorate? They could ask about political pressure that that was exerted and if civil servants 'pushed back'? They could then ask about who was getting paid for Programme leadership, where, when and why it went wrong? Then they could get the detailed findings of the Gateway Reviews? Then look at the risk register, how it was reviewed and when and what actions were taken? Then they could look at similar debacles, of which there are many, forget the political rhetoric and posturing? Finally they must ensure an environment exists which ensures there are very real penalties in place for those who should have blown the whistle on this and similar programmes yet didn't - did they lack the knowledge or the spine?

Unfortunately the 'after' looks fairly ugly for this Programme but perhaps the Beast could spawn some Beauty's for the future.

Complex Contracting - Book review

Brown, et al. (2013) have pulled off a remarkable coup with this book in that it provides something of real value for procurement practitioners, those managing and leading major projects, academia and students. It is easy to read too and virtually free of jargon.

But what is meant by ‘complex contracting’? This is a book about contracting in uncertainty when there is a requirement for a level of buyer and seller investment that makes exit difficult. It is the degree of uncertainty that makes a contract complex, not the size of the budget.  The book will be relevant to all those contracting in “the fog of uncertainty” (p.49).

It deals with the US Coast Guard’s approach to using a new integrated strategic approach to procuring, over 30 years with an anticipated expenditure of $24bn, boats, planes, helicopters and an IT system. An exceptionally ambitious undertaking, with a steep learning curve and, as almost every aspect of the procurement was new for both the buyers and the providers, significant risk.

N.B This is an extract from my full review which can be read in Local Government Studies.

Invisible ink used on the script of HS2 justification

It's very strange that a Government which advocates transparency wants to be very, very opaque. Wasn't the argument for transparency that the army of armchair auditors would be able to call their political masters to account and only those who had something to hide should fear transparency? I suppose you can understand the desire for opaqueness when it comes to the Department of Transport who suffered badly when the figures behind the West Coast rail franchise were exposed to scrutiny and unravelled? Understanding isn't the same as justification though.

Transparency delivers other benefits. The armchair auditors can be part of the risk management process providing constructive critique and highlighting risks which might otherwise have been overlooked.  Transparency also wins stakeholder confidence and helps with change management. Those benefits can't be realised if you opt for secrecy. Yet, in an age of Wikileaks and Edward Snowden does anyone seriously believe the Report will remain concealed?

However, the latest act in the HS2 farce is the decision yesterday, not to publish a report of the Major Projects Authority by invoking a bizarre workaround of the Freedom of Information Act. Withholding the report only feeds the beast of cynicism and further undermines confidence in the project. Not only that but it forgoes the benefits of transparency and makes it more difficult to argue that others should provide visibility of their decisions.

Can the loss of £100m be a good news story for procurement?

The PwC report into the failed BBC Digital Media Initiative has now been published. We know masses
 of public money was wasted and we know, with the benefit of hindsight, that we'd all have done a better job and pulled the plug earlier. But I think this report is actually a good news story, particularly for complex contracting, if the high profile of the debacle leads to the report being read and learnt from. Learning the lessons could lead to many more doomed projects being aborted earlier and therefore unnecessary costs avoided.

The report suggests that there was an absence of an effective governance structure which enabled challenge of time, cost and quality. This has been a common problem with complex contracts and reminds me of the problems with the Scottish Parliament building when David Steele announced he was kept in the dark by civil servants on progress. It is not enough for those in decision making roles to 'approve' they also need the confidence to ask challenging questions as part of risk management.

There was a failure recognise that the DMI was more than a technology solution and needed effective business change management too. Reporting was based on the technology risks and failed to give due attention to the business change management risks. Again this isn't a first but remains, to me, one of the key reasons IT projects fail - it's a bit like giving someone who has never had a telephone a brand new iPhone and assuming they will immediately understand why and how to use it. The power in technology, to me, isn't in the machine but the capacity and willingness of stakeholders to harness its potential.