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.

Lessons on the cost of musical chairs at Westminster

Tucked away, understandably, in The Sunday Times was news that "MPs squander £140m on empty office" and typical finger-pointing that "a bunch of muppets" had been involved in this procurement decision!

The story in itself is easily summarised: a lease for 15 years (up until 2029 with no break clause), costing approximately £6m per year, has been taken out on a new office block on Victoria Street, less than half a mile from the Palace of Westminster, while renovations take place at the Palace of Westminster.  The plan had been that the new office would accommodate parliamentary staff currently housed in Millbank, and MPs would move to the former parliamentary staff offices at Millbank. Yet, a year later the offices remain empty and costs of £4m are being incurred for rates and services, allegedly because of fears MPs travelling from Millbank to vote in the House of Commons  could be vulnerable to attack.

(There is no mention of what the decanting costs associated with the musical chairs would have been or why the MPs couldn't move to the new Victoria Street office as opposed to Millbank!)

Now part of the solution appears to be that Department of Health staff move to the new offices, presumably so that the MPs can move to the DoH current HQ.  I assume there has been some risk assessment that suggests the journey up Whitehall is safer that the the journey along Victoria Street.

I certainly recognise, particularly in the light of the barbaric attacks last Friday in Paris, that there is a risk to MPs safety, but is it not true that MPs always have to travel to and from the Palace of Westminster, and also that they spend a lot of time in their constituencies 'out and about', so why is this particular journey so risky and ultimately costly?

There are some interesting questions which procurement could answer, for example:

1. Why was the contract signed and long before the MPs had agreed to move?
2. Why is there no 'break clause'?
3. What was the business justification for securing the new office accommodation so early?
4. Was there a risk assessment which recognised and mitigated against MPs reluctance to move to Millbank?
5. Is the contract for the Palace of Westminster renovations already signed and does that contract anticipate a completion date of 2029, allowing for the further decant of MPs back from their temporary locations? 
6. Is it reasonable to assume that a completion date of 2029 represents good practice - it seems a very long contract for renovations?
7. What contract management arrangements and contingencies will be put in place for the required complete date?
8. Prior to signing the lease, were all the relevant stakeholders consulted, including those responsible for MPs security? 
9. If effective stakeholder consultation took place, are "the muppets" not those who said the MPs journey from Millbank carried a manageable level of risk?
10. Had the Finance Committee, some of whom now find the contract "completely outrageous", had any scrutiny of the proposals before they were committed to?

The whole thing looks like a remarkable mess, yes, but perhaps it serves as a cautionary example of why procurement needs to be involved in this type of decision, and that a full options appraisal is required and risk assessment, prior to signing a contract.

Bovaird on 30 yrs of outsourcing & free access to this important paper.

It was with enthusiasm I approached this paper: Tony Bovaird has been someone I've know for quite a few years; the introduction of CCT was one of the key milestones in shaping my career as it elevated procurement to a strategic role, albeit with the objective of retaining contracts 'in-house'; and, the make/buy decision remains a big question I am faced with when discussing Target Operating Models.

Bovaird's paper can be expected to become a core reference paper but it should also be of interest to practitioners, public and private sector - particularly those in the NHS concerned with the debate on Agencies 'Ripping-Off' the NHS - who have to complete an options appraisal on which procurement approach is most appropriate.  Remember, an options appraisal, as Bovaird points out, is not a once and for all event but something which has to be regularly reviewed. 

Bovaird provides a review of the various strategic procurement options from the introduction of CCT (Compulsory Competitive Tendering) through partnership working, strategic commissioning, prime contracting, and then insourcing.  He clearly articulates the comparative benefits of the purchaser/provider split - the make/buy decision. He also highlights questions over the effectiveness of joint-commissioning although he does not expand that to discuss the role of consortia buying. 

One line which Bovaird uses is particularly worth wider reflection: " the age- old lesson that the search for certainty and tidiness in policy is likely to come at the expense of inappropriate decisions". At a time when there is frequent discussion on the role of procurement in innovation, we have to be prepared for managed risk which will in turn sometimes mean, with the benefit of hindsight, that wrong choices have been embarked upon - that's not a word of caution but instead a call for recognising that the appetite for innovation must be matched with a similar appetite to risk.

In concluding the paper we are presented with 10 lessons learnt from 30 years of outsourcing - if you feel you haven't time to read the paper why not take the time to read the lessons learnt.

Public Money & Mangement, in view of its potential impact have taken the unusual step of providing advance free access to Tony's paper which can be accessed here.

When news of procurement doom and gloom is a good thing

News that one in four government projects is in danger of failing may surprise you as something I view as worth celebrating.

It is a good thing that if it represents an honesty in project management status. It is a good thing if represents a true assessment of risk. It is a good thing if it avoids throwing further good money after bad. It is a good thing if it leads to corrective action being taken. It is a good thing if lessons are learnt and shared.

It is a good thing if other organisations learn that honesty in project management risk is something to be valued.

However, should the projects continue 'As Is' it represents a terrible waste of opportunity and a sad inditment on strategic procurement and project management.

The risk of dysfunction Procurement Strategy

The revelation today that changes to Home Office immigration rules will mean the need for many overseas recruited nurses to return home reminds of us the need to have a holistic approach to risk management when developing policy and strategy.  It is only a short time ago that a small fortune, £20.19m,  was invested in overseas recruitment as a means of addressing nursing shortages. Now, having made that investment, the HO changes mean that investment was only a short-term 'band-aid'. It didn't solve the problem. Did the original business case recognise the wider dependencies?

From a procurement perspective, we have to see this pending crisis in parallel with the DH  'clamping down' on Agency spend. I have already questioned that strategy, but that was in the absence of knowing about the HO plan which would generate additional shortages. Did the DH lack awareness too of the HO plans when they announced the 'get tough' on Agencies strategy? Did the HO think through the dependency on overseas workers? Did the HO and DH speak to each other - did they even understand the need to risk access their strategies?

Now the DH go into negotiations with Agencies in an even weaker position. The can't train sufficient nurses within the HO 2017 guillotine and demand will only increase, and they can't make sure that the anticipated nursing shortages can be addressed through Agencies or temporary staff. It will take some very creative thinking to achieve a good outcome.

While it's easy to see the flaws in central government strategy, the lessons to procurement practitioners are clear:  don't embark on a strategy prior to doing your research and understanding what else is being considered in the organisation; have a clear articulation of dependencies; risk assess your strategy; and, avoid placing yourself in a position or weakness in the market.

Are agencies the baddies of NHS procurement

My ears pricked up this morning when I heard the NHS CX, Simon Stevens, explain to Andrew Marr that they were "going to clamp down on some of the staffing agencies ripping off the NHS".  Is this some sort of role reversal taking place - the Conservatives are in power but the market are the baddies!

In the past many public sector organisations believed that their traditional approach of having a 'bank' which they managed and could call on was flawed - outsourcing was the new best practice. Exploring the option of outsourcing did make sense but in parallel there needed to be a proactive approach to managing both the agencies and the internal demand. I observed agencies providing an easier option than the hurdles of sourcing internally through HR. Justifying the need for 'temps' was relaxed and while staff previously covered for short-term absences, that became the exception. The agencies made it easy to just pick up the phone and have a temp sitting at a desk two hours later. Then, months later, like a version of Parkinson's Law, the temp had become indispensable and the temp had become a necessity.

To me what went wrong was that public sector bodies relaxed their control mechanisms - they devolved control. Worse they gave it away. The agencies weren't the baddies, they were 'partners'. But as the clients raised their expectations of demand there was a parallel need to manage risks through prices by the agencies.

Now "some" of the agencies are perceived to be "ripping off the NHS". What happened to the 'intelligent client'? What happened to the belief in competition? What happened to managing contract prices?

Those who believe the market is ripping the NHS off would do well to review the robustness of their demand management. Agencies provide a solution which the public sector has come to rely on. Power has perhaps shifted to the market as opposed to the client. Before assuming the NHS is being ripped off why not consider a ,make/buy options appraisal. Before clamping down they better have a risk management strategy which addresses how they will respond if some of the critical providers just  say "okay, we'll not bid anymore!"

The impact of belief in value for money

Today's Times includes an interesting report on how perception of a more expensive product influences outcome. The report is based on research published in the American Journal 'Neurology'. In an experiment a group of twelve Parkinson's disease sufferers were given two placebos and told one was more expensive - they were told one cost $110 and the other $1,500. Remarkably those given the perceived to be more expensive placebo actually had a 28% improvement in motor skills compared with those on the same placebo yet perceived to be less expensive!

The researchers think the 'expectation of reward response' may have had an impact on the outcome - interestingly eight of the twelve particiants said that they had greater expectations from the more expensive (placebo) drug.

How often do we hear specifiers refer to evidence of better performance from in a procurement process - could that evidence be based on 'expectation of reward response' or rose tinted spectacles?

t would be interesting to know the impact on an evaluation if evaluation panels were given pricing information which implied higher quality?

Of course it would be unethical and unacheivavble within the Regulations, but what would be the perception of users if they were told a public sector organisation had opted to provide a more expensive solution based on citizen preferences?

A contradiction in make/buy theory

Most of us would agree that, when carrying out an options appraisal as part of the make/buy decision, the theory says retain in-house strategic services which are critical to delivery of the core business. That theory seems to have been turned on its head with the water service to the west of Northern Ireland, where last night almost 8,000 properties were without water. Many have not had water for days and had to resort to melting snow and fetching water from rivers in a scene more akin to third world services.

The problem all revolves around work-to-rule as part of a decision to change the pension rights of NI Water employees (at some stage I may discuss my abhorrence at trying to change pension rights which employees signed up to many years previously). However, some repair work is the responsibility of NI Water employees, while other work is governed by a PPI arrangement with treatment plants contracted out. If there's a problem with the 'contracted out' (buy) treatment plant, the staff responsible for repairs are the contractors as opposed to NI Water and the work is completed. However, where the fault relates to the remit of NI Water staff, i.e. 'make', it is subject to the work-to-rule and that's where the water service has collapsed.

This is a remarkable exception to the theory of make/buy where the in-house delivery is adversely affecting core services as opposed to the 'buy' service!

Scottish Independence and a lesson for procurement

Regardless of whether or not you would vote 'Yes' in tomorrow's referendum for Scottish independence, few could disagree that there has been a frenzy in trying to persuade voters that they would be 'Better Together'.

But that has included the reshaping and re-spinning of a 'No' vote as representing a vote for a version of home-rule which creates a new quandary: what if you want neither independence nor 'home-rule'. Voters are now deprived of the option of 'no change'.

Setting that aside, the Westminster fear of losing has manifested itself in the generation of new arguments. I remain sceptical about the motives behind much of the 'Hug Scotland' rhetoric. I am also sceptical when I hear the word 'might' used in arguments because I immediately find myself saying "and might not". Then I wonder who in Scotland would be swayed by the likes of David Beckham's plea and justification to stay together.

What I do like, however, is the development and strengthening of the relative merits of both sides arguments. More robust discussion has taken place and the pros and cons seem to have been thoroughly aired. In the procurement world that has included the spectrum of independence being good for SMEs and bad for SMEs - can time prove which side was correct or will be faced with the "if only ..." excuse.

Yet, when I consider options appraisal as part of the procurement cycle, too often I have seen the reluctance to have a robust approach to options - procurement options appraisals have often been self-fulfilling prophesies. We would do well to learn the lessons of the Scottish debate and spend more time arguing 'why not', generating alternatives and even saying 'convince me'.

Uber wars

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

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

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

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

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

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

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

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

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

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

Never be afraid to ask "are you sure?"

The star economist of the year, Professor Thomas Piketty, who has topped the best seller lists with his 577 page 'Capital in the  Twenty-first Century', has been exposed by the Financial Times as having made transcription errors, used incorrect formulas and cherry-picked data.  It makes little difference whether, as he claims, his core argument stands up or indeed whether he has been lauded for his statistical work - the method was wrong and that undermines its credibility.

You may also recall the recent discussion on research on statins. Research published in the British Medical Journal “overestimated the side effects of statins by more than 20 times”. There are fears that those who stopped taking statins as a result of the original claims may have been unnecessarily exposed to heart attacks. It may be, as they say, 'academic', to some that the data was unreliable.  

In both these cases it would have taken a lot to have challenged the assertions of the authors but it turns out they were built on foundations of sand.

Of course this isn't the first time I have discussed these problems. You may recall the case of the correct numbers being inputed the wrong way round. I could go on but that may act as a distraction.

I would like you to recall these examples the next time you find yourself being pressurised in a tender evaluation by an expert - even the great and the good can make mistakes. But then again, so can you and I. Perhaps it's wise to ask "am I sure this is robust?"

Procurement Space Chess with Russian music

It matters little which side of the fence you sit on the politics of Crimea but what we are observing is an amazing game of strategy, negotiation and brinkmanship. While the West have huffed and puffed Putin has called checkmate and the threats of the recent past have done little to affect change.

This is clearly a historical event being played out and we can expect strategists to dissect and debate for many years to come. But does anyone seriously believe that Russia will now walk away from the Crimea? Did anyone seriously believe that once the Russian masses assembled for 'military exercises' that Putin didn't mean business?

So we observed, powerless, from the sidelines, as Russian soldiers walked in and redrew the Russian border.

Now we find that NASA employees and CONTRACTORS  have to freeze co-operation with Russia. While the International Space Station is excluded from the break in collaboration, that must only be due to the US deciding that it would be too painful to break off that co-operation. But surely that just signals to Russia how they can inflict pain on the West.

As we know the US has also lost its independence from Russia to even launch people into space - that's been 'outsourced' to Russia. At some stage the US must have decided on a make/buy decision on space launches, now I suspect they are questioning their 'what if' analysis.

Hasn't the space programme always been about economic benefits. Wasn't the reason for co-operation with Russia about economic benefits and gaining economic advantage. We're now seeing the economic advantages being compromised for political rhetoric. But what if Russia decides that co-oepration with the US is no longer advantageous? What if Russia now starts to co-operative with a different partner, one which shares its longer-term view? Wouldn't those scenarios be detrimental to the US?

Calculating total acquisition costs: the case of the aircraft carrier.

Every good procurement person knows you should calculate Total Acquisition Costs and they need to be included within the business justification. But whose responsibility is it to identify all the potential costs and factor those into the business case and options appraisal? Equally, whose responsibility is it to identify the various dependencies which will impact on a successful delivery?

For example, when Northern Ireland recognised the need for a better Dublin to Belfast train, it was quite late in the day they discovered the platform in Belfast's new station in the centre of the City was too short to accommodate the train and many of the bridges en route too low for the train to go under - that leads to significant extra costs, which add to the costs of the procurement.

As much as that may seem impossible to believe the MOD appear to have given us another example, had it been two days later you may well have suspected an April Fool.

Aircraft carriers are big cost, in this case the budget cost has now risen from £800m to £6.2bn, yes, billion. But aircraft carriers don't just stay at sea. In this case the idea was that the carrier should be based at Portsmouth. Unfortunately the new carrier won't fit into Portsmouth harbour. To make the hole fit the ship £40m needs to be spent on dredging a new 30 foot deep channel. Fine, but then we discover that the dredging can't be carried out more than a year in advance because the harbour would silt up again - hold on a sec., does that mean that dredging, at £40m isn't a 'one-off' cost but a running cost?Who picks up that tab? In addition to the dredging, the jetty needs to be strengthened. Then there are concerns about the demand on the local electricity supply when the carrier is in port - can the network handle the demand or will additional investment be required there too?

How on earth could Procurement have been expected to know those costs? I think most would agree they wouldn't. But then someone has to ask the questions about dependencies and costs, and if Procurement don't ask those questions, we can't assume anyone else will.

Hodge should demand even deeper transparency on public procurement decision making

I am a great admirer of Margaret Hodge's forensic examination of public procurement - she seems to have honed the skill of extracting the information others don't seem able to. So I read with interest today's the report in the Guardian which claims she has suggested the DWP may be on the verge of meltdown major contracts and has called for greater transparency.

The article is definitely worth a read, particularly if you are a public sector procurement practitioner who "simply have to up their game and get a grip" - a sentiment which Francis Maude seemed to agree with in his parallel interview on Radio 4's Today programme (start to listen around 2:21).

Hodge appears to be calling for greater transparency on contract management, particularly with major contracts. Personally I think that falls short of what is needed. I think, for major contracts, we should see greater transparency on the pre-award decision making and options appraisal. Let me explain.

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.

The Queen, Dredging, Potholes and short-term procurement

The news over the last week has highlighted some of the false economies of short-termism in procurement decision making,

The residents of Somerset Levels claim that the recent flooding could have been avoided if there had not been a cut in river dredging operations. They have good cause to be angry as no doubt their property investments have become almost valueless (would you buy their property?). If you follow the trail of cause and effect from the alleged short-term decision to cut dredging,  then that contributed to the flooding, which in turn led to damaged property and farm crops, which in turn leads to loss of access to insurance, increased fresh produce prices, potentially farmers exiting from their businesses, which in turn leads to the to claim benefits. Then if people move from the area there will be a depopulation and questions as to the sustainability of local schools and remaining local businesses! Do you honestly believe those who suffer the impacts, and their families, will not blame their politicians, through the ballot box, for many years.

Separately consider the problems with potholes.

Scepticism, the pursuit of happiness and procurement

I remember, around 20 years ago, insisting I signed-off a consultant's report before it was presented to the major decision-making body for approval. The budget holder was aghast and saw me as being awkward. Then we discovered the consultant's recommendations were flawed and, had their recommendation gone through, the wrong choice would have been made. Sometimes the CPO shouldn't be too deferential.

There was a terrific example of the little guy being proved right in last week's Guardian. A leading academic in the field of mathematics of happiness, had the smile taken off her face when a Master's student exposed a flaw in her argument. Now the text books need to be rewritten.

This isn't the first time Goliath's of academia have been laid low by a sceptical David. You may recall a not dissimilar case last year when the highly influential, Reinhart and Rogoff, who had supposedly cracked austerity had flaws in their analysis exposed by a postgrad student.

The next time you encounter someone presenting a strong argument for some procurement decision which you don't feel quite comfortable with, I suggest you remember, Brown and Walker - the two Giant slayers of academics - and recognise that even those who expect deference can be wrong and if they are right, surely testing the robustness of the argument is something the CPO should do anyway.

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?

HS2 recruits butcher, baker & candlestick maker for business justification

I trust you were all riveted by The Times letters today which included a letter from freight company leaders. This appears just the latest attempt at creating the ever increasing HS2 business justification - recently it had become about capacity and regeneration too. I hope I am not breaching any copyright laws by quoting from the letter:

Building HS2 will free up much needed capacity on the West Coast Mainline which is a vital freight artery. That is good news, not just for us as freight companies, but for consumers. It could remove up to 500,000 lorries a year from our motorways. With fuel and road costs predicted to increase the costs of running lorries by 36% by 2040, additional rail capacity will ensure that food and drink continues to reach our supermarket shelves, at affordable prices. It will also, crucially, allow our exports, such as automotive components, to continue to reach European markets.

I have taken the liberty of emphasising some of the clues of how desperately weak this business seems to be - grand statements which lack certainty and also fail to consider that there may be alternatives. HS2 may not free up the West Coast Mainline. HS2 may not remove 500,000 lorries from our motorways and perhaps the lorries could be removed in a different way. The prediction of a 36% increase in the cost of running lorries by 2040 assumes an absence of innovation and any change in fuel taxes. The statement of affordable prices is a nonsense if you parallel that with the reality that currently many just can't afford weekly food bills at the present time. Then to cap it all we think that the market wouldn't be able to deal  with getting automotive parts to Europe.

In a nutshell, this latest intervention highlights the lack clarity on what problem HS2 is trying to solve and that we don't seem to understand why the HS2 investment is being made.

Could this whole HS2 debacle, linked with the rail franchise fiasco, be a Michael Gove orchestrated conspiracy to add business studies to the core curriculum?  

Wobbles on HS2 business case

It is expected that tomorrow George Osborne will embark on a

different journey planner to justify HS2. The core business justification is expected to shift from reduced travel time to capacity and regeneration.

Set this against the backdrop of MPs recent confidence of having their collective voices heard over military intervention in Syria and you may say this shift of emphasis is very brave - it could actually be stoking the fire for those against the whole project.

I have discussed HS2 many times but it has struck me, from early on, that there is a need to get the basics right in communicating HS2 benefits. I'm not so sure that a good communications strategy for a procurement of this size is to be unclear what the key benefits are.

From a procurement perspective, the key question around HS2, and any other major spend, should be 'what is the problem we are trying to solve?' The answer to that question should then lead to options being generated to solve the problem. Only then can the options be appraised. If the problem to be solved is capacity and regeneration it is highly likely that you would generate different solutions than if the problem to be solved is shifting people and things faster throughout the country.

If HS2 is to get on the right track, my suggestion is that we need to build consensus on what is the problem which needs to be solved - it is a mistake to start from the position of saying "HS2 is the solution, now what is the problem?".