Gove turns his guns on procurement and programme management

One time thought to be a contender to become PM, former Secretary of State for Education, and Secretary of State for Justice has set his sights on public sector procurement and programme management professionals today, in a Comment piece in the Times. I will watch with interest the Letters section to see if CIPS reply.

Gove does a fine job of cataloguing procurement and programme management disasters. Indeed, many of the cases he cites are those I have blogged about in the past and/or used as case studies when training.  I will spare you an echoing of the cases; the average man or women on the street is familiar with many of them anyway.

While it is interesting that Gove has put pen to paper on a subject dear to many of us, what is particularly interesting is who he considers to blame - the 'Sir Humphrey's but not the Ministers.

Gove calls for a shift to weekly reporting on progress to Parliament of procurements and programmes. Would there be enough Parliamentary time and, if there was the time, would we see any interest from MPs?

Controversially he also wants to

see the names of civil servants responsible for these programmes to be published, their explanations for failure (or success) recorded and those who've failed be removed while those who can demonstrate clear, measurable, success get promoted. I know this concept- let's call it accountability - may be somewhat revolutionary for our civil service.

This is an interesting notion but isn't Gove missing the point about why we have Ministers in charge of government departments?  It is the democratically elected politicians who have to call those in their own departments to account.  It is the democratically elected politicians who have to rein in the pursuit of unrealistic political timescales.  It is the democratically elected politicians who have to develop the skills to scrutinise and manage professionals to ensure that they deliver on their objectives. Yes, perhaps civil servants need to use a louder voice in explaining to politicians the risks of pursuing some projects. But you can't just point the finger at the civil servants without recognising a failure of political performance management.

Also worrying is the implication that civil servants are being influenced by lobby groups. Can he really believe that, and if he does, why doesn't he blow the whistle on what really amounts to corruption.

This, one time, very influential political may well have lost a lot of his power, but should he ever regain it, CIPS will have a major problem if they don't educate the former Secretary of Education now.

  

Brexit preparedness and armoured vehicles - what's so hard about that for procurement?

Just in case you wondered why I hadn't blogged recently, it is quite straight-forward, I've been very busy on my day job and haven't found much to say or add to the current procurement debates. I've also been really frustrated with obvious lack of preparedness to the Brexit vote - I wrote an article in Public Money and Management in March 2015 which warned:

... there is growing discomfort in many countries with their membership of the EU.  Those working in public procurement policy and practice would do well to consider the 'what if' scenario if the threatened exits from the EU materialize as there would be significant repercussions. (PMM, Vol 35, #2,  March 2015, p.95).

Well the news this week certainly suggests my warnings should have been heeded more widely across the UK public sector.

However, excuse that bit of "I told you so" - what do you make of the story in today's Times: 'MOD accused of sham contest for armoured vehicles contract'?  The gist of the story is that there are insinuations that the MOD is engaging in a procurement process while already having made up its mind what the outcome will be.  Apparently, the "preliminary market engagement" has been worded in such a way as to reduce the options to one, even though, functionally, it would appear there are significantly lower priced alternatives available!  The process is underway at the present and this stage closes on Tuesday coming.

I wonder how the MOD assessed the risk of this procurement exercise? What will happen in the rest of the procurement process?

If it turns out the potential alternative providers chose not to bid, then the media and those bidders will say it was a fix and the tax payer may have lost out - we would never know.  If the competing products don't match the needs of those on the frontline but because of media attention is awarded anyway, the frontline users suffer and also the best provider misses out on their competitive advantage. If the alternative providers do submit the required responses and then subsequently aren't shortlisted, it will be perceived as a fix and a very costly fools errant for the bidders.  If the alleged preferred supplier wins, at what is considered to be an inflated price, there will be questions, perhaps even allegations of corruption.  If the process is scrapped ... I could go on but you get the gist.

This procurement has all the hallmarks of not being a CV enhancer - why on earth can we not think procurement risk and manage it?

Black Box Thinking - book review

How many times have you heard it said "lessons will be learnt" - the mantra often used instead of just saying "sorry, we got it wrong", yet rarely seems to result in any action.  Syed's remarkable book truly addresses, through many examples, the need to learn from when things go wrong.  Syed provides fascinating insights into how different professions tend to address failures, on the positive side, learning and improving, while on the negative side, denial and cover-up. I find myself contrasting this with excuses.

The key message is that if we want to drive improvement and innovations we need be more honest and critical of failures.  We need to understand what happened and what needs to be done differently based on that learning.

Some of the case studies are nothing short of scandalous and yet, I suspect few professionals are entirely innocent. Particularly eye-opening is the example relating to latex gloves and the bravery of the anestistist in challenging the surgeon. The book is also a call for bravery and the need to intervene when it is clear to you a mistake is being made. I will not spoil the book by saying more.

For procurement professionals this critical reflection could address why a key stakeholder didn't seem to welcome your advice, whether a negotiation could have delivered a better outcome, whether the sourcing strategy was optimal, and even if the last interview.  Within the profession we talk a lot about innovation - to me this is a practical book on making innovation happen.

I found the book really easy to read, excellent for the holidays and really thought provoking - it will not be going to the charity shop but added to my 'must keep and re-read'.  I recommend.

Lessons for procurement change from the Common Agricultural Policy Delivery Programme

The Public Accounts Committee has just released its report on The Common Agriculture Policy Delivery Programme which could be the basis of an episode of 'The Thick of It' on change management. Indeed The Times uses the wonderful headline: "Civil servants' row with Mr Fancy Pants costs millions".

The report is short so you can quickly read it but some salient points are:

1. If you want a programme to be delivered successfully you need clarity, consistency and ownership of vision. Those supposedly driving this programme had competing objectives which hampered progress.
2. Make sure those bringing about the change and the leadership of the organisation to be changed can work together. 
3. Make sure the organisation is ready for the change. It appears the department concerned were neither ready nor adequately supported in the change.
4. Make sure the approach is pragmatic. A digital solution was being pursued even though the users lacked the skills and even the required broadband coverage.
5. Sometimes you need to go native. In this case the mistake was as basic as the change agent turning up in a very formalised setting dressed as if they could have been going to a beach party - the old saying 'clothes maketh the man' may sound trite but sometimes an unnecessary explicit culture clash can be perceived as arrogance and work against success.   

Let's remember that the failure in delivery cost money, £60m.

Are there any lessons for those seeking to bring about procurement change/improvement, yes, don't make the same mistakes!

A family affair or a weak procurement strategy?

Sadly the Queen's 90th birthday party has needlessly got off to a bad start. Not only is there criticism about the plan to charge £150 to attend the picnic, but there are also questions about the procurement of the event organisation. The problem isn't that the event is being organised by the Queen's grandson, but that her grandson's company are charging a fee for organising the event.  

Why on earth have those representing the Queen's interests not warned about the probability of a perceived conflict of interest and sought to avoid that criticism. Transparency of a competitive procurement would have helped. Alternatively her Grandson could have acted as a specialist advisor to a different provider free of charge.

It makes little difference to the perceived conflict of interest that the event will be run on a not-for-profit basis since there is no means of demonstrating that the costs are reasonable.

But there's another procurement angle; whoever delivers this once-in-a-lifetime event will gain unrivalled commercial gain from the ability to sell services to future clients on the strength of the demonstrable experience gained.  Given that value to potential providers, those procuring the event could have asked, "Is it really necessary to pay someone to organise this at all, would good providers see it as having such long-term value they'd have done it for nothing or even paid for the privilege?"

It never ceases to amaze me how often perceived conflicts of interest in procurement make the headlines when they could so easily be predicted and prevented. It never ceases to amaze me that there's an assumption you always have to pay?

PS. 10 February 2016: Queen's grandson quits birthday charity due to conflict of interest!!!!

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.

Belfast City Hall 'fleg': Lessons for negotiation and change management

Few of you probably realise that just as I was starting my procurement career one of my 'any other duties' was sending out details, to those responsible for Belfast City Council buildings, when they should fly 'the Fleg' (as they say where I come from). I worked in Belfast City Hall right through the worst of 'the Troubles' and the daily threat of bombs - indeed I clearly remember a bomb going off a few metres from my office during a meeting with one supplier. Heaven forbid that we ever return to that dark past of daily atrocities. I left the Council in 2000 but I still live in Northern Ireland.

It may come as a surprise to you, but I think the whole 'Fleg' fiasco, like the Julian Assange fiasco, can teach us some lessons for procurement negotiations and change management.

The average man in the street could have predicted that a decision to instantly change from 'business as usual' of flying 'the Fleg' would have provoked anger and resistance.

2012 marked the centenary of the signing of the Ulster Covenant by 471,414 men and women - many signed the Covenant in their own blood in the same City Hall (see picture) - so timing of the change was not particularly sensitive. The fact that there were protests outside when the decision regarding the 'Fleg' was to be taken should also have signalled problems - clearly there were those not ready for change and quite vocal in their resistance to the change. The reality that there was a large continental market taking place in the grounds of the City Hall, with traders from across Europe, could also have indicated that the decision's impact would travel far and risk compromising so many positive Belfast stories of recent years. Risk management, stakeholder management, communications strategy and timing don't seem to have been considered in a way that would have minimised the resistance to change. It just doesn't appear that Belfast had reached the right stage of change readiness.

On Social Impact Bonds

Social Impact Bonds are quite an innovative 'payment by results' approach which includes up front investment - you can find good explanations of SIB on the Social Finance and  Young Foundation websites

However, you could paraphrase SIBs as: 'PFI meets Big Society'. Similarities being the drawing in of investment to drive an outcome-based delivery which, had the public sector not been starved of cash, would normally have been public sector funded and managed. They should encourage innovation and be user focused in design (something which we have discussed over the last few days).  Of course investors expect a return, which they are due if the designed intervention works. That return can be a long way away.  Some big issues must be that:

PRM: stepping in where banks fear to tread

I've discussed SRM a lot lately - more often than not about the vulnerability of firms which do not take it seriously (you can pick up on the previous discussions here).  So learning of Rolls Royce and GlaxoSmithKline stepping in where banks have feared to tread, by providing supply chain financing, impressed me quite a bit.

Rolls Royce have stepped in to lend £500m to small suppliers as a result of banks failing to do so - prior to the Global Financial Crisis there had been no need to.  It's not clear how much GSK have lent. Honda haven't actually lent any money but they have spoken up on behalf of their suppliers so that they can obtain bank finance.

This has to be a strong demonstration of true partnership working.  I would like to hear the government had learnt from this and were going to do similar.  However, it may be more pragmatic if the government introduced an incentive for others to do likewise by under-writing some of the risk the buyers have taken on.  If that were the case, and the offer was extended to public authorities too, I could see this being just the type of initiative which could encourage SME investment and accelerate the UK recovery - let's wait and see if the Chancellor or Business Secretary think so too, mind you I'll not hold my breath.

Is it wise to announce a lack of confidence in your vital statistics?

Some months ago I wrote a cautionary and fictitious blog on a future Procurement Litigation Agency. Today we may have seen the first signs that may become a reality with the government effectively announcing a lack of confidence in its own financial models.

You will recall the recent  Rail Franchise fiasco, which led to the Minister having to admit, that despite previous reassurances as to the robustness of the procurement process, the vital statistics just didn't add up. The permanent secretary put it down to "a lack of proper quality assurance"! Clearly the Franchise has set the 'cat among the pigeons' and, so low must be the level of confidence in government calculators and spreadsheets that, an urgent review has now started to test the reliability of the Government's key calculations.  Not just procurement calculations but also the accuracy of the models relating to climate change, income distribution, benefits claims, and farming subsidies. Quite honestly I have never heard the like of it before in my life!

I would like to hear what scenario planning and risk assessment has been completed on the initiative? What will happen if one, never mind the majority, of the key models prove to be defective?  What will happen if key policies have been launched and introduced on the back of flawed models? How much will all this cost?

Nearer to home, which key procurement models will be tested and what will happen if they are considered weak?  While politically a U-turn can be painful, the might of the Remedies Directive and the Freedom of Information Act may lead the government walking into a potential Procurement Litigation Agency scenario having to address an abundance of FoI requests and procurement challenges.  What will be the impact beyond central government - could the localism powers be extended to enable a referendum to be called for a review of all procurement models and decisions in an area. We are only too familiar with a war having been started on the back of flawed assumptions and 'reported facts' but that doesn't mean we can turn back the clock.

Of course the need for the review may be considered politically expedient, however, what I would advocate instead is a U-turn. Instead of a 'rear-view mirror' analysis, review the effectiveness of  scrutiny, gateway reviews, risk management and quality assurance - particularly for procurement decisions (this blog has highlighted many examples where that has proved ineffective). Such a review of the protection mechanisms will help in the avoidance of future fiascos. That will encourage honesty while the current review can only be expected to encourage defensiveness and a hiding in the sahdows, particularly given the backdrop that mandarins we now be penalised for not implementing government policy.


 

pCard or not pCard, that is the question: Considering the evidience

The Government Procurement Card (pCard) was introduced in 1997. Its primary purpose was to reduce the transaction costs associated with Low Value Orders when it was assumed the cost of the transaction was more than the actual purchase price.  It was also believed that pCards would deliver better control and reduce fraud.

On 1 June 2012 the Public Accounts Committee (PAC) published its report on the use of pCard’s in central government. While the PAC report highlights the need for strengthening controls and a refreshed business case. This blog is not concerned with the key content of the report but instead considers some of the oral evidence reported verbatim in the report. The oral evidence discussed reveals some matters of relevance to all those concerned with reducing procurement transaction costs, regardless of whether or not they are based in the UK, engaged in central government or the wider public sector.  While concurring with the PAC findings and recommendations, the significance of some of the key issues debated appears to have been missed in the key body of the PAC Report.

Greening, social benefits and procurement?

Social benefits clauses have been the subject of much discussion over the past decade but in an interesting development today the UK government is said to have claimed they will award the new Crossrail contract taking into consideration the wider benefits to the UK.

Justine Greening, the Transport Secretary, claims:

"This includes a 'responsible procurement' requirement that means bidders will need to set out how they will provide opportunities for training, apprenticeships and for small and medium-size businesses."

I wonder if this is another case of Greening misinterpreting advice? We considered an earlier faux pas some weeks ago. Is it not the case that a non-UK bidder could deliver and possibly exceed the delivery of social benefits yet the beneficiaries may not be in the UK?  If that is the case Greening could find herself having to eat humble pie, again.

Of course, Greening could find wiggle room by saying that she really meant the procurement itself (Crossrail carriages) will benefit the UK and that earlier delivery, better functionality and lowest whole life costs were really all she intended to take into consideration at the award stage - they are certainly benefits to the UK.  I wonder will she?

Nevertheless, this will be worth watching as it is difficult to see how awarding a contract based on UK specific social benefits are not discriminatory and therefore in breach of the Public Contracts Regulations.

Either way, the contract will provide useful learning for the rest of us.  It would be useful though if