Grenfell Tower: Could procurement help reduce the current risk?

Few could fail to be affected by the tragic disaster of Grenfell Tower. Understandably there has been a clamour for a quick response to reduce the risk of a repeat, but I wonder if the potential use of procurement as a speedy risk mitigator is being overlooked.

Attention is being given to having the cladding on something like 600 tower blocks tested and fire inspections carried out.  While that will provide some comfort and be politically expedient it there may be faster ways in providing reassurances to those potentially at risk.

Let's face it for cladding to have been installed there needed to be a specification, a contractor and a completion. Would it not be possible to use make use of that trio for providing a quicker response:

1. Each landlord checks the specification for cladding to see if, with the benefit of hindsight, it satisfies today's safety requirement; (If landlords don't have the capability then perhaps some central support could be provided to QA the specification);
2. If the specification is considered 'fit for today's needs' we then ask the contractor for a written undertaking as to whether they fitted the specified cladding. Failure to give that undertaking could be place the contractor on a 'naming and shaming list' and potentially be taken into consideration in the award of future contracts. Health & Safety legislation and Contract Law could be used to address those who feel short in delivering the specification;
3. If the specification is no longer acceptable then at least we have a short list to progress for further prioritisation;
4. Where the specification is appropriate and the contractor provides an undertaking that they complied, then you can provide some reassurance to residents and move those site visits further down the queue;

If I am correct, this strategy could provide reassurance in hours rather that weeks. Document analysis and quality assurance is at its core rather than the much slower inspection and testing. Is what I propose over-simplistic or have I missed something?

I'm not suggesting there will not be a need for a comprehensive response of testing, inspections, and review of Building Regulations, but that can happen against a background of the proposed prioritisation

Of course, the finger may well be pointed at construction procurement anyway, for example, poor specifying, poor contract supervision and management are obvious potential vulnerabilities, as will be allegations of fraud and corruption!

Trump's Procurement policy dividend?

Trump and Brexit have certainly reinvigorated the old PEST analysis and no doubt are yielding plenty of university assignments at the present. From a procurement perspective there's plenty to think about.

It's a few months since I last discussed Trump's procurement strategy. Whether it is a clever strategy is yet to be judged but today's New York Times carries a report that Indian company Infosys will take on 10,000 US hires to deliver to US clients.  This is directly linked to Trump's Hire American Policy.  It demonstrates the potential power of procurement, but while it may make short term political sense and play to the gallery, does it really make good business sense?

Clearly Infosys have decided it is expedient to be seen to be doing the right thing and making noises about hiring American.

The reality that non-US companies have been winning contracts in the past suggests that they have had a competitive advantage, most likely to be in price (labour being the main cost) or quality.

Assuming that US staff will not be prepared to work on the same rates as their Indian counterparts delivered on, will that not lead to bid and contract prices rising.  In the service economy, will US citizens and organisations be prepared to pay the additional costs?  Could the US start to see double bids from companies, one US labour based with a parallel non-US based labour price?

Are the necessary skills available in the US market and is there sufficient capacity to match the demand. We are led to believe that Indiana has offered Infosys $500,000 in training funds and tax credits for new jobs. Of course that is attractive but the implication of the need for investment in training is that the skills do not at present exist.  There will be a lead time in training.

Let's assume that some US citizen now takes up the training - will they be handcuffed in some way to remaining in the US or will they find their new qualification is there ticket for seeking out pastures new, in which case is that not a loss to the US?

Of course, it may well be that Infosys' announcement is opportunistic and they would have been hiring local staff anyway.  That would make more sense to me - take the grants, make the announcement and do what you would have done anyway!

While I do think this is a useful example of procurement demand driven policy change, which I have long advocated in terms of sustainable procurement policy, I don't see this as being a clever strategy for the US economy.  Equally, for the average US citizen, I don't think it will create any new job opportunities, but increase their costs.

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?

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 

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".  

Weathering the storm of justifying the need to buy at all

We are told the BBC are progressing through a tender process which means they will break their 93 year relationship with the Met Office since the Met Office haven't got through to the final stages. Already the advocates of a continuing BBC/Met relationship have started to cry this is bad value - the UK weather just can't be understood by 'foreign forecasters'!

It seems strange that critics of the likley procurement outcome refuse to recognise that if weather forecasting is a science, then suitably qualified forecasters, regardless of their origin, should be able to predict objectively.

I can only assume that the BBC have been following a robust, transparent and objective process. Have the Met Office been complacent in their bidding or are there genuinely better qualified competitors? If they want to throw stones at the BBC's procurement process would the critics not have been better to have criticised the selection process prior to its commencement. Perhaps the BBC should have carried out some stakeholder engagement in the process earlier and brought the advocates to the status quo with them.

Having said that, it seems logical that the Met Office would want the freedom to compete to deliver weather forecasts to other boardcasters too, without being subjected to nationalistic loyalty.  Why can't the defenders of the status quo recognise that for the Met Office to do that there has to be open competition.

However, my question is not about whether or not the weather forecast should be provided by the Met Office or not. Nor is my question about the selection and award criteria. or indeed its robustness.

To me there is a much more basic question, specifically the need for the BBC to spend money on providing a weather forecast at all. A lot has changed in 93 years. There are now so many sources of weather forecast open to the public, for example, apps on a smart phone tailored to specific locations. Just because there has been a 93 year history of the BBC providing weather forecasts doesn't justify a further 93 years of need to for the BBC to provide weather forecasts! But isn't that a common problem is procurement; a contract is due to expire so we need to relet. Wouldn't procurement improve its contribution and value by asking the much more relevant question: "Do we need to buy this at all?"

Child labour and talk are too cheap - meaningful action is what counts.

David Cameron is using a platform in Vietnam today to announce the UK's initiative to stamp out child labour in supply chains. Don't get me wrong, I find child labour absolutely abhorrent and really do believe in the power of responsible procurement. However, I doubt Cameron's initiative to stamp out child labour, based on all companies with a turnover of over £36m publishing an annual slavery and human trafficking statement, will have any significant impact.

Does David Cameron actually believe that companies have that sort of supply chain visibility or even the skills? Does the public sector have that sort of visibility and skills?

The initiative will require companies to declare what checks they have in place. What would be considered acceptable robust checks? Will Cameron's minister who leads on public procurement be in a position to be accountable to parliament and the electorate for the steps public procurement have taken - if not it is a bit hypocritical to not to lead by example. Perhaps Cameron should add this to his wish-list of EU reforms - that will be popular but then isn't cutting red tape a big issue too!

How is the initiative going to be communicated to UK companies? August is unlikely to be the best time to raise awareness.

In companies which do become aware of the initiative who will have ownership and be accountable? Will it be allocated to the Health & Safety Officer like so much of environmental purchasing, the CFO as part of their accounting statements, the CPO who control so little of the budget decisions, marketing who will want to put a good gloss on whatever the reality is, or the risk manager who is often a voice crying in the wilderness? Whoever holds responsibility will be a good indicator of how seriously the initiative is taken - why doesn't Cameron insist there's a named responsible owner?

I assume the statement will need to be audited in some form, who will do that?

What if the companies don't comply? It appears the sanction is criticism! Is that supposed to be a serious sanction? I have previously discussed reputational risk linked with supply chain abuses and how it really doesn't seem to manifest itself  in the market. I have also questioned the conviction of politicians to see some of these great ideas through to the end rather than just looking for something to say in a speech.

So, do I expect to see some discernible change in five years against today's benchmark? Actually is there a benchmark against which progress will be measured?

PS 31 July 2015 - here's a link to the relevant section of the Modern Slavery Act 2015 

Premier Foods procurement strategy going from bad to worse

Last year I wrote about the procurement strategy of Premier Foods which has suddenly become a hot topic and now looks as if the chief executive has been coerced into setting aside.

Initially the rationale of the Premier Foods procurement strategy was to supplier reduction and a focus on strategic suppliers. The objective wasn't necessarily wrong but the implementation was flawed in both rationale and implementation.

Now to add to that confusion the chief executive has said "in my view that is just one of many kinds of discounts. It's an investment on growing our business and that's entirely appropriate". That seems a massive shift in last year's justification! Did the chief executive understand the 2013 rationale? Was there any Board buy-in to the risks of what could happen and the potential fallout which has now led to adverse national press and media converage?

Gavin Darby, the chief executive, to me, has made things worse by stating:

If the optics of this scheme for some people feel uncomfortable, I'm happy to move on and move the scheme to a more traditional discount .. we would just say we have an invest-to-grow campaign, we want people to come with us to invest in our business and that would be reflected in a discount soon the terms they have offered in the past.

If Premier Foods had wanted "[suppliers] to come with us" they should have thought a bit more about how they would bring the supply market with them.

Darby seems to forget that some of last year's suppliers appear to have now chosen to opt out of supplying and some who did pay-to-stay never received any business anyway. How will Premier Foods go about negotiating the new discounts with those firms? Let's face it Premier Foods have now lost the initiative and common sense would suggest that suppliers should just refuse to budge on discounts.

Setting all that aside, we have yet another example of procurement damaging brand value and I assume adding to remedial costs associated with retrieving reputation.

Then we have the issue of do they really understand the concept of strategic supplier management? Sadly, I fear, Premier Foods are working to their own recipe and it has a remarkably bad taste.

Ed's pledge on government procurement

Today Ed Miliband set out his six national goals for a Labour Government. Within the speech was a commitment that Ed will make it a requirement for every firm awarded a major government contract to offer apprenticeships. We have seen the creation of apprenticeships being part public sector contracts before, largely in local government, but will this commitment deliver?

First, we have a problem of definition: what is a 'major contract'? Will it be defined by the EU threshold or a definition of the service? If you are an SME you would have a different difinition of what is a 'major government contract' than, say, a large out-sourcing organisation.

Will the requirement be solely on central government contracts or will it also apply to devolved and local government? Will it be for services, supplies and/or works?

But then again, what is a 'requirement to offer apprenticeships'? Doesn't the shaping of the offer dictate the likilhood of uptake? Will there be wiggle room for those drafting and committing to contracts?

Will there be the requirement explicity state the apprenticeships have to be established in the UK - surely that wouldn't be legal?

Does a single apprenticeship on a multi-million pound contract represent compliance? Having said that, is there a threshold of what would be an unacceptably high dependency on apprentices in the delivery of a contract?

Regardless of all those questions, won't the cost of apprenticeships increase the cost of contracts - will budgets accommodate those potential additional costs?

Central government contract management has become an oxymoron - how on earth will this be contract managed?

Great to hear that Miliband recognises public procurement has a part to play, but can public procurement play its part?

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.

Releasing procurement shackles worries for Labour

It surprises me how rarely we actually hear how procurement

will shape the next UK election manifestos. Yet today Sky News, The Financial Times,  and The Times all gave notice that Andy Burnham, the shadow health secretary, will demand an immediate freeze on new contracts between the NHS and the private sector.  The logic of the argument appears to be that Labour do not want to be shackled by 5 year contracts let under the coalition, should Labour come into government next year. If that's a prelude to the manefestos I dread to think how robust the forthcoming policies will be.

However, is Andy Burnham's call sensible? 

1. Burnham needs to provide clarity on which contracts should be ring-fenced for freezing. You clearly can't stop NHS contracting completely if you want to make sure the Service functions under a business as usual for users during a future change in political leadership, anyway it would be bonkers to suggest the NHS shouldn't have IT licences, for example, in place. 
2. The NHS contracts register should be shared with Labour, and the other Parties, so that they can have visibility of which contracts are coming up for review over the coming year. The parties could then policy access those contracts for impact and agree which can proceed As-Is.
3. Potential contracts which could be impacted by future policy can then reviewed in more detail with Politcial Advisors to ensure their interests are protected, for example, break clauses could be included and means for sharing the cost of uncertainty to providers estimated.

It strikes me that Andy Burnham couldn't possibly be calling for a blanket ban on the award of contracts but perhaps those in the NHS and his advisors need to provide clarity how to protect his interests while avoiding NHS meltdown. Pragmatism is required as opposed to rhetoric. 

is procurement a better route to peace than sanctions

Like so many I am appauled by the deaths of those on flight MH17 who just happened to be
passengers in a plane, in the wrong place at the wrong time - it would be difficult to see any justification for this slaughter of innocents.

Yet the West's response is based on a single tool philosophy, namely, apply sanuctions on Russia, even in the absence of robust evidence that Russia is directly responsible. There appears to be absolutely no evidence that sanctions against Russia work and to a certain extent the West could be both 'cutting of its nose to spite its face' or perhaps in the longer term demonstrating a lack of ability to make any meaningful impact on Russia. Is the objective to penalise or prevent perceived bad state behaviour in the future?

It is also clear that sanctions could backfire and perhaps inflict pain on the 'sanctionor' just as much, if not more, than on the 'sanctionee'.  Perhaps it is therefore time to consider other alternatives.

For centuries the tool of trying to bring about world security and avoid conflict was marriages between the Royals of potential enemy states. The days when that strategy was effective have long gone. I wonder if an alternative would be, rather than impose sanctions, to develop stronger procurement interdependence between states, for example, contracts which create greater reliance on 'buy' from other inter-dependent states who have competitive advantage rather than 'make' within a protectionist independent strategy. Surely in such a strategy state inter-dependence would increase the stakes of conflict, and the greater the inter-dependence on strategic contracts, the higher the stakes. Such a radical idealist approach to the aspiration of 'world peace' would shift from reducing inter-regional trade barriers, like those the the EU to reducing barriers across separate economic trade regions, for example between Russia and the EU, and the EU and Latin American countries.

As I watch the daily news I feel as if we are sitting on the edge of a precipice with potential lethal alliances appearing all over the world. Sanctions have had little impact on so many of the major areas of conflict and are unlikely to have a major impact in the future. We need to consider alternatives beyond the existing toolbox, perhaps procurement and contractual inter-dependence is a tool worth considering.  

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?

What could UKIPs success mean an earthquake for public procurement strategy?

UKIP have had a remarkable electoral success over the last week. Their European Manifesto is entitled 'Create an earthquake' - perhaps it's worth considering what their manifestos say and the possible implications for procurement strategy where they have become a dominant voice.

Actually, the European Manifesto, from a procurement perspective is 'Business as Usual' but the UKIP Local Manifesto states they will: 

Make it easier for smaller and local businesses to tender for local authority contracts, and Cut the councils’ advertising and self-promotion budgets.

Now, to me this is interesting when compared with my comments on last year's Manifesto. Strangely I can no longer access the 2013 Manifesto but my comments last year suggested the following:

A very political procurement

In 2012 I published a paper on International Lessons on Austerity Strategy - one of the key lessons being the  advantages of having projects 'shovel ready' so that you could deploy procurement to stimulate the economy and accelerate the recovery. That meant planning approvals gained and availability of construction resources 'ready to go'.

If you did that you could reduce unemployment and the human trauma which accompany it, you could also shift from paying benefits to receiving tax and national insurance income.

Today we learn that more than 200 projects are being announced to rebuild Britain - all to start during 2014/15. Some would scream "why weren't these measures taken much earlier to prevent the flooding and now dangerous condition of our roads?".

Of course the cynic could also say this investment is political - designed to create jobs and have a visible impact of 'something happening' in the run up to the election.

The spotlight now moves to the procurement, project management and risk management of over 200 major projects. If the procurement is successful the next election will see a celebration of successful delivery of improvement public services, local economic development and jobs. If the procurement is unsuccessful the spotlight can be expected to be on procurement blame.

Perhaps it is timely that Locke has just been released!

I have absolutely no understanding of the preparations prior to this announcement but it will be a significant test for the Major Projects Authority too. I assume that someone has checked the capacity to deliver on what could become a very political procurement.

2014 Budget and procurement priorities

All eyes were on the Chancellor's Budget Statement today but not one mention of procurement. Should we read anything read into that? I doubt it.

We also had more views on what are procurement priorities for 2014 - this time from Hackett. I'm unable to access the report but there was enough in the WSJ to give us the core message, namely, cost reduction/avoidance has dropped to 4th place (I'm afraid I don't know what #3 is, but rolling into:

#1 is expanding spend influence, and
#2 is tapping into supplier innovation.

Other key messages from Hackett are the need to focus transformation on rebalancing supply risks, recalibrating procurement technology and tools, and reinventing procurement's value proposition.

Not a great surprise yet the more astute will realise this doesn't say "snap" with the priorities stated at eWorld Purchasing & Supply. There the big concern highlighted by two separate pieces of research appeared to be addressing the deficit - the procurement skills deficit.

Like the Budget Statement, I don't think we need to read anything into this lack of consensus - like most research, and the Crimea and Scottish independence votes, it depends on who were asked, the environment in which they were asked, when they were asked and how the questions were put.  As I have frequently argued, asking CPOs, in isolation, is unlikely to provide the most reliable answer on what organisations need to focus on.

By way of bringing both the Budget Statement and procurement's priorities together, I think this YouTube is relevant and entertaining - the key messages are clear. If you compare the YouTube messages with what many say about procurement priorities there is some similarity. While we frequently chant a single mantra of cost reduction, we shouldn't be shackled to that, the trick is what's important to the key stakeholders, and primarily the CEO, and not what CPO enjoy. Nevertheless, enjoy the YouTube. I'm off to celebrate the GO Awards and the success of some procurement which has made a difference.

Another Groundhog Day for UK public prourement

Supply Management has covered a news item that the government will review public sector food procurement with a view to reducing leakage from UK agriculture sector. Isn't this yet another Groundhog Day for UK public procurement? Back in 2003 we had the Public Sector Food Procurement Initiative. I spent many hours at meetings and training days which were aimed at strategically using UK public procurement to deliver UK farming benefits.

I have previously discussed the Groundhog Day approach to UK political procurement (and here). The Groundhog Day approach to procurement policy is interesting. Imitation is said to be both the best and most sincere form of flattery - there must be some agreement that these policy through procurement initiatives, conceptually at least, have some merit. They also have the potential of being good political platform announcements - when a politician makes a conference speech the concept may well resonate with the audience and few appear to stand up and shout 'Groundhog Day'. The Groundhog Day Policy must also give the person who suggested the recycled initiative some kudos.

But do Groundhog Day procurement policies not also throw up other questions. For example, what lessons have been learnt from the previous attempt at addressing this, was there an outcome evaluation of the previous initiative, why was the previous initiative not embedded in practice, will those who adopted the former strategy now have problems reselling the new strategy, are those who resist change actually the winners in Groundhog Day procurement policy?

It does strike me as strange that opposition MPs, who may well previously have led on these Groundhog Day initiatives, aren't asking questions and attempting to break the cycle. Either way, as I say, the policies, generally appear to be good, pity about the implementation and performance management.

Any suggestions as to what the next Groundhog Day procurement policy will be?

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.

When the Ministers met the CLG procurement inquiry

At last, I hear you say, we've reached the seventh, and final, oral evidence session of the CLG Committee Inquiry into procurement. The witnesses being Baroness Stowell of Beeston (Parliamentary Under-Secretary at DCLG with responsibility for procurement) and Nick Hurd (Minister at the Cabinet Office). When you recall the central government's CPO reports to the Cabinet Office these witnesses should be in a very strong position to speak with authority on the political objectives of procurement.

The Baroness took an early opportunity to volunteer her view of procurement effectiveness:

They should understand that it is not just about buying the relevant services at the best price possible but that this is also an opportunity to make sure that procurement is a way of getting the best service you can and that it is possible to improve the services that are provided locally. If we start putting a [savings] target on things, the focus then is on that rather than what I would see as the more important outcome, which is a better local service for local people.

It is important to note that this was stated in response to a question on what could be potential savings from procurement as opposed to "what would good look like". The Minister responsible for local government procurement, therefore, sees procurement as not about lowest price but better local services. It is really disappointing that the Committee didn't take the opportunity to compare that view with the Cabinet Office Minister's, as you may recall his boss, Francis Maude, told the Public Administration Select Committee in May of this year: that the "primary objective through procurement is getting the goods and services needed by the citizens at the best price". Is it just me, or are the Cabinet Office and DCLG at odds on what epitomises good procurement?

Then compare, former Local Government Minister Michael Heseltine's view, which has the implied endorsement of the Chancellor:

FoI for public sector contractors?

I have to say I was surprised today to hear of proposals that the Freedom of Information Act could be extended to embrace public sector contractors (quite possibility driven by a recommendation from the Social Enterprise UK ) .

I don't actually believe the rhetoric that such a move will force firms to compromise commercial secrets as, it strikes me, Section 43 of the Act already provides that protection. However, I do question how well thought through this potential policy is and what is likely to be the outcome?

Common sense suggests that since the Freedom of Information Act is now well embedded in the public sector it shouldn't be too hard to establish the potential value which would be delivered through the increased scope. For example, it would be useful to know how much cost has been added to the average public sector organisation answering FoI requests? It would also be comparatively easy to carry out some research with those who have made FoI requests to establish the real benefit gained? I have never actually made a FoI request but have had experience in responding. Responding to FoI requests consumes an enormous amount of time and there is a game of sanitisation taking place - a cottage industry has been created for bureaucrats. But equally many requests are just lazy, disguised market research at the expense of the public sector, it's information which isn't in the public interest but the costs are being shifted from the private sector to the public sector. Labour could place a FoI to get that information before pursuing the policy.

If the legislation is extended there will be an additional cost to private and third sector organisations just because they happen to be public sector contractors. There will then have to be some disaggregation of those organisation's work which is covered by FoI requests and which isn't. Those organisations being asked to respond to potential FoI requests will have to allow for that cost in their bids and that in turn will be passed to the public purse - those advocating the policy will need to budget for those costs. It may also be worth considering what the likely impact will be on mirco, small and medium enterprises?

However, if the issue is that the public sector isn't really on top of its contractors, then changes to specifications and contract  management may be more cost effective options.

Some months ago I discussed another Labour proposal, that of obliging all public sector contractors to pay the Living Wage. It strikes me that Labour can see public procurement is a useful political tool but I think it may be better to sit down with some sympathetic businesses and work out the most effective means as opposed to kite-flying.