Nuclear fallout in procurement award process

Forget the Hinkley Point procurement process for a minute and let's reflect on the procurement process for the £7bn decommissioning of the UK's first generation of nuclear power plants - yes, they got it wrong!  Well at least that was the judgement of Mr Juctice Fraser at the High Court; now the Nuclear Decommissioning Authority "are considering [their] legal options".

So what went wrong?

1. A bidder, which should have been excluded from the process due to omissions in its submission, was allowed to progress to the next stage;
2. Bidders were not treated on equal terms - allegedly one tenderer was disadvantaged in the scoring;
3. "Experts" evaluating the submissions manipulated their calculations to arrive at their preferred outcome; 
4. The wrong consortium were awarded the contract.

All fairly basic breaches of procurement good practice and yet potentially this would have gone unnoticed had one consortium not challenged the award.  

Were no concerns expressed by the evaluation team? Were there no whistle-blowers? Was this just incompetence or perhaps something more sinister? 

Let's remember that the wrongful award appears to have had a significant detrimental impact on the wronged bidder. There will now be compensation costs and possibly significant delays to completion of the work which needed to be completed. And of course, significant reputational damage to the Nuclear Decommissioning Authority and its procurement advisors. Not a good CV entry and not a good look for the profession.

Massive amounts of money being spent are no excuse for not getting the basics right.

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?"

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?

Procurement S.O.S.

What would you do? You have three bids and one is 20% more than at least one of the others (NB we don't know whether it is 20% more than the other two or just one of the other bids). You have recently been the subject of major criticism based on how you handled a previous procurement evaluation. The bidder, which is now 20% higher, had previously been identified as preferred bidder in an earlier bidding round.

If the facts, as reported in today's Financial Times, are correct and this is a true reflection of the procurement of the helicopter rescue service, that happens to be the dilemma faced by the DfT.

I don't know all of the facts but it is just possible that the higher bidder is the correct price and the remaining two are wrong? Yet the DfT are thought to have rejected the higher bidder based on the price differential. Ironically that is the bidder which, in the previous round, was the preferred bidder. The previous bidding round was set aside due to allegations of corruption, yet the outcome of that investigation is not yet known. What happens if the bidder, who has been rejected from this re-run, is exonerated?

Numbers that lie

Last week I commented on the problems associated with a typo in a contract of employment.  In that case a decimal place positioned wrongly led to a court case over an offer of either £2m or £200k.

Then Saturday's Times introduced an new twist to the ongoing investigation into the curious death of a GCHQ mathematical whizz kid.  Ironically the contractor analysing the DNA made a mistake in that "two numbers were put in the wrong way round" on a computer.  As a result somewhere in the region of 18 months investigation into his death were misdirected.

If nothing else these two examples highlight the need quality assurance when dealing with numbers - not just the calculations but the transposition. While the numbers may not have lied they were just the wrong numbers!  Yet as I observe procurement practice I rarely come across that checking even though I have seen mistakes in 'inputting the figures' and the calculations prior to inputting.

However, for a long time I have been concerned about the professions blind acceptance of evaluation matrices.  We appear to assume numbers introduce some form of objectivity while forgetting that many of those numbers are a completely subjective allocation.