Small Business Friendly Concordat and institutional memory loss

Isn't it great to hear Chloe Smith has made a commitment to bring about change in central government procurement so that it is easier for SME's, particularly in the construction sector, to gain business.

Not so great that no-one actually briefed Chloe that what was being said had little new. Not so great that Chloe wasn't briefed that much of what was being championed had been committed to in the 2001 'Smaller Supplier ... Better Value? Not so great that Chloe wants local government to follow her example, without having been made aware that many council's have already signed the 2005 Small Business Friendly Concordat.

What we really need Chloe to tell us, isn't the old, old story of commitment to ..., but a new story of accountability for implementation, what's going to change to ensure her commitment is acted upon, and whether the Government are prepared to be measured against this commitment in May 2015 election.

Bring on the Procurement Star Chamber

There's something quite remarkable about the concept of the 'Star Chamber' which seems to have been lost in today's political dumbing down and popularising of the approach - it existed until 1641 to enforce laws against those so powerful that the traditional courts would never act against.

Consider the Opinion piece in today's Times, a great deal of which had already been discussed in this blog in the context of the evidence given to the Public Administration Select Committee inquiry into public procurement. Now it is clear to me that some very lame excuses were given to PASC justifying poor implementation of procurement policy and strategy. After all, if those charged with implementation can't deliver, why on earth did they, or their predecessors, not make it clear when the policies where being drafted that there was neither the readiness to change or the skills necessary to 'make it happen'. The PASC was just too chummy and lacked any real sense of personal accountability - I don't believe for one minute that much will change in the duration of this parliament.

However, I would like to pick up on one aspect of the Opinion piece and suggest a way forward:

Some mandarins are refusing to renegotiate IT and procurement contracts to get a better deal. "It's all about saving face ... they've signed off rubbish contracts and they don't want to admit it".

1. Are the mandarins actually refusing to renegotiate bad contracts?
2. Is there the scope to renegotiate the contracts anyway? Basic contract law reminds us that there is no obligation to enter into only good contracts and if you enter a bad contract, it is still a contract;
3. Is the real constraint face saving?

If we really want to bring the transparency to public procurement and accountability we need to expose and explode these myths if they are not true. But if they are the truth, we need to find a way forward so we are not replaying this discussion in another decade.

There has been a long history of 'the great and the good' of business being asked to provide their opinions on what is wrong with public procurement - it's easy to throw those stones. Yet, in almost thirty years that has delivered little change - that model just doesn't work. However, why don't we just use that type person and deploy them on Procurement Star Chambers. Let the Procurement Star Chamber sit in judgement over the implementation of public procurement policy and strategy, let it be linked, at the very least, to the civil service performance management system too. Let the Star Chamber establish if bad contracts have been entered into, where there is scope for renegotiation, and whether the  reluctance to do so is based on face saving? Bring on the Procurement Star Chamber if you want to get beyond the rhetoric and 'make' change happen.

24 hours to get your communications plan ready

It seems this weekend was a good time to bash public procurement and that the attack will continue on Monday night with Channel 4's Dispatches programme. I make no defence for public money wasted and am ashamed of some of the poor public stewardship exhibited. But the headlines can be misleading, the sound bites are easily digested and create barriers for hearing the truth. But procurement can see the media attention as an opportunity, to do that you need to think about what will be 'heard', how to respond and how to create a constructive platform for moving forward. These few days public procurement bashing can be very healthy and provide a useful opportunity for strategically repositioning procurement, if you want.

So, let's recall, Saturday's public procurement bashing centred around the Taxpayers' Alliance publication of the Bumper Book of Government Waste. The headline figure was £15bn of procurement waste per year. You can read my blog on how I believe the headlines were flawed. To me, if you are in public procurement, you need to have a quick refresh of the content of Towards Tesco, understand the key arguments, set out the pros and cons of your own organisational structure (acknowledge there is no perfect structure), be clear how you can maximise the benefits of collaborative procurement internally and externally, and set out your collaboration strategy.

Monday night's Dispatches programme provides a second bite of the cherry. In anticipation of that you should try to read the Sunday Times procurement bashing articles. Expect a revisit of Sir Philip Green's flawed report - you could read my critique. To me the focus of the bashing will be on pCards - now I've dealt with those before. You should understand the benefits of procurement cards, particularly how they can help local SMEs at the present time with cashflow problems. Also be clear about the transaction cost reductions and, contrary to the bashing, the increased control and visibility they provide. The Dispatches programme here is your ally as it highlights visibility which may not otherwise have been available. Make it clear that pCards were not the problem but inadequate governance, controls and procedures.

The timing of the media procurement bashing is also fortuitous - if the newspaper articles hadn't have been over the weekend, CEOs may not have had time to consider them. Your challenge now is to seize the opportunity and prepare a briefing paper for your CEO so that you can use media procurement bashing as part of your procurement communications strategy.

Taxpayers Alliance procurement assertions are flawed

Today's Times makes great play of The Taxpayers' Alliance, Bumper Book of Government Waste. Not only does public procurement get a bashing on page 4, but also in an Opinion piece from Matthew Sinclair (Chief Executive of the Taxpayer's Alliance) on page 26.

When I read that £15bn a year could be saved through better public procurement naturally I looked for the evidence. That led me to the source being cited as the Institute of Directors. But the Institute of Directors hadn't identified £15bn could be saved, their source was Colin Cram's report, Towards Tesco.

Now I have deliberately stayed clear of the procurement family spat on Towards Tesco, not least because I like and have great respect for those presenting the opposing arguments. However, we have to remember that the Towards Tesco was based on big assumptions too - it also stated there was an absence of reliable data.

I have serious concerns about the pragmatism of the centralisation argument and I'm not even sure if Colin's argument has been correctly interpreted. But we have reached a dangerous stage when a hypothesis presented by Colin, who is clearly committed to public procurement, is being misinterpreted and used by the Taxpayers' Alliance. We need to end the rhetoric and move to robust peer reviewed evidence to get to the most likely outcome. In the meantime, perhaps we should take all the other Taxpayers' Alliance assertions with a pinch of salt.

Are we ready for naming, blaming, shaming & taming procurement

What do you think about the Health Secretary's plan to expose health consultants who want to opt out of performance tables?

I'm in favour. In fact I'd go further - I want to understand the outcomes achieved, problems encountered in the operating theatre, proportion of NHS/private work, the proportion of their career spent on my particular area of concern, and, what's more, I want to  have the option of seeing that information on an NHS validated webpage or when I am sitting in my GPs surgery discussing a referral. Why? Well, I have had a number of operations which have had complications in theatre, serious infections, and conflicting opinions. I have also been given, what other consultants convinced me was inappropriate treatment and inappropriate advice. I also want to see the cloak of aloofness removed from the consultant so that they also remember I am the focus of their attention.

While I'm on that rant let me share just one of many bad experiences. I waited quite some time for an appointment to see a consultant. I then waited long after my appointment time to be admitted to his inner sanctum. While I was waiting, of course there were the signs prohibiting the use of mobile phones. I was duly informed I could be seen. No sooner was I in the throne room than his mobile phone rang, he said, "excuse me I have to take this call". Believe it or not the call was from his son and they discussed his performance on the rugby pitch. Not that surprisingly the child had more of the consultants time than I had. Did I feel I'd experienced patient centred care?

Thankfully, I have also experienced absolutely world class care. On at least one occasion having to be reassured they had not mistaken me for a private patient.

Remove the cloak of mystery and I can make informed decisions as to whether or not I trust the consultant. Remove the cloak and I can see beyond the hot air. Remove the cloak and I can opt not to go near the poor performers.

Now if we adopted a similar position in public procurement things might change too. We might learn who is in the wrong job, who doesn't implement procurement policy, whether centralised contracts are justified. Let's forget about massaging the data overload and opacity of contracts let. Just let us know which procurement departments achieve agreed objectives. If they don't use the central contracts, just let them tell us why - we can then make an informed judgement as to whether the 'centralised contracts' are at fault or the procurement leads. If we see enough CPOs saying the contracts aren't used because they aren't fit for purpose, then maybe that is useful for reviewing the strategy. If procurement policy initiatives are not being implemented then maybe we have the wrong CPOs. Are we ready for naming, blaming and shaming in public procurement? Perhaps we're content with the cloak of opacity.

The need for procurement risk management

I've a new debate piece in Public Money and Management which aims to raise awareness of the need to address supply risk management amongst key decision makers. We all recognise that risk has raised the profile of procurement in the media over the last year. Horse meat, supplier credit leading to cashflow problems and business closures, car recalls, and, more recently, the Dhaka factory disaster have placed procurement in less than a favourable light. The public sector also needs to avoid muddling through on procurement risk and develop a more strategic approach. Here's and extract from the paper and my suggestions for those who have decided to become proactive in the strategic management of supply risk.

The first stage should be a clear allocation of responsibility for supply risk management to a named and accountable individual. 

The supply risk owner should be responsible for the completion of an audit. The risk audit will be helped by spend analysis, a comprehensive contracts register and vendor rating. The audit should be then lead to a risk assessment and profiling.  For strategic procurements, regardless of the value, the risk assessment needs to go beyond first tier supply and include a trace to source through the various supply tiers.  

The completion of the risk audit should include key stakeholder input, it is too important to be left to the supply risk owner alone.  Nevertheless, it is unlikely that one person would be able to consider the many facets of supply risk.  Key stakeholders should also be active participants in the development of mitigation plans. 

The risk register needs to be critiqued and sign-off by the Top Team, who in turn agree the level of risk tolerances.  Management by exception is unlikely to be sufficient, instead, for strategic supply, a regular agenda slot needs to be allocated; in the current climate, that reporting could be expected to be monthly.  

If you would like to read the full piece there are a limited number of free access eprints available through this link.

Intriguing procurement: BGT, Twitter-gate and PRISM

What have the Britain's Got Talent egg-thrower, Twitter-gate and PRISM got in common? Well the answer is they are all had contractors who behaved inappropriately, and brought embarrassment and loss to their client.

Last week I posted a blog on Dark Procurement which was previously a guest post on Spendmatters - it was fascinating to read some of the comments on the Spendmatters' post. I think it is fair to paraphrase the comments as saying, 'CPO's should act in line with their personal beliefs and conscience even if those personal beliefs are in conflict with those of their employer.

In BGT, Twitter-gate and PRISM we see examples of the contractor acting on their judgement/conscience as opposed to the clients - I'd really like to hear from CPOs who believe that's acceptable performance of a contract? But isn't the argument that CPO's should act on their conscience something similar?

What these examples highlight is moral hazard. When you're dealing with individuals who provide some form of personal service you face the risk of 'will they do what they're supposed to', which isn't easy to protect against. So we have Simon Cowell with egg on his shirt; Newsnight resignations; loss of Booz Allen Hamiton's share value;  NSA, GCHQ and the Foreign Secretary all being diverted from what they should be doing and paying a high cost due to a maverick contractor.

It really doesn't matter whether or not you believe the maverick was 'doing the right thing' if you were the CPOs who bought them but it does matter if the CPO didn't demonstrate due diligence.