Does Cameron understand procurement strategy?

A few months ago I drew attention to the imbalance of power between the Ministry of Justice and the legal profession, specifically the threat relating to changes in the Legal Aid system. The changes to Legal Aid mean a 30% reduction in Legal Aid cut in fees paid to barristers.

Yesterday we saw the ironic court scene of Alexander Cameron QC, the Prime Minister's brother, arguing that the trial of a £4.5m fraud case should be delayed as a result of the inability of the defendants to access lawyers prepared to defend them under the new Legal Aid rules. Barristers have effectively said, "if that's what the rate is, no thanks".

The drama is even more bizarre in that Alex Cameron had decided to argue that the case could not continue, without charging for his fee!

From a procurement perspective this reminds us of three strategies:

1. Poistioning relative power of the buyer/supplier relationship. The barristers have the power to sell their services outside the Legal Aid system, so they can walk away without great pain;
2. A focus on price reduction can compromise delivery. The suppliers in this case have said to MoJ the price you are prepared to pay is not attractive enough for us to deliver; and
3. Achieving 'preferred customer' disorts the market in favour of the buyer. In this example, Alex Cameron delivered his services free of charge.

While the MoJ case is of interest and relevant to procurement, there is a real danger we are approaching replication elsewhere in the system. For example, think of the threat of the Care Quality Commission to penalise those who on deliver 15 minute home visits to those with dementia. The buyers should of course specify for longer visits based on outcomes to be delivered as opposed to inputs, and in turn pay a rate which is affordable for the providers. But what would happen if the threat continues and the care providers say "if that's what the rate is, no thanks"? Well, I suspect the health and social services commissioners would be in crisis, the Department of Health have no means to deliver the care, there are no longer sufficient places for public sector residential care in either hospitals or homes. Visualise the political impact if these services started to collapse the week before the election?

Procurement Tsar for NHS

The Health Secretary has announced the NHS will have its own Procurement Tsar. The Tsar will be responsible for a new 'central list' of hundreds of items, harnessing the purchasing power of the NHS - those of you with reasonable short-term memories will recognise that is not a million miles away from what PASA created and it seems to echo some of what the Crown Commercial Services aim to do too.

Will the Procurement Tsar report to the Health Secretary or Francis Maude?

We all know that the problem is not setting up 'central lists' but in changing the culture so that the lists have the ownership of users, particularly clinicians. I'm not clear who the Tsar will be, but they will need to have remarkable influence, change management expertise, leadership and tenacity. Will they also need to have procurement expertise or will they merely act as champions?

Will the Health Secretary act as the primary champion of the change and the Tsar take on the role of 'enforcer'?  I don't think we've had such a Tsar in the past and it will be interesting to observe, not only who is appointed, but the strategy they adopt - will it be a carrot or a stick?

Of course the Tsar could claim an easy victory if they chose their battles with adminsitrators as opposed to clinicians. A 'central list' which includes toilet rolls, reams of paper, printers, laptops, water coolers, etc., would still be a 'central list' but the Tsar will need to demonstrate success in the areas which have been most resistant to change over the last 20 years otherwise they can expect a short life and difficulties in justifying their own value for money.

If they are successful we can expect a new model for public procurement - I wonder will they need the CIPS Licence too?

Moral hazard, counterfeits and procurement

I recall reading a great book on Isaac Newton about his little known career at the Royal Mint trying to outsmart a counterfeiter- it's well worth a read.

Yesterday's Times carried two reports which resonated with that book. One of the reports was concerned with supposedly vintage wine,  at £10,000 a glass, that a 'wine detective' claimed "on some of the bottles that are supposed to be centuries old, the labels were printed by computer", other causes for concern were the corks, label glue and the type of bottles. Had the buyer been victim of a fruad?

The second report was concerned with counterfeit £1 coins - not a million miles away from the problem Newton was trying to crack.

Both the reports remind us of one of the challenges which face procurement: 'how do you know you get what it says on the tin (or specification)?'

I recently spent some time exploring an organisation's vulnerability to procurement fraud. One of the areas of vulnerability was the lack of protection against a specifier colluding with a supplier who priced against a specification but delivered below specification. The problem was aggravated in that many of the materials were concealed in the building fabric and a counterfeit was unlikely to be detected unless there was an acute failure which could have led to lives being lost. Of course the failure could have been through a shorter lifespan and long after the specifier had left the organisation.

Part of the problem was the specifier was the same person who dealt with the RFQs, and signed-off acceptance of the delivery to the specification.

While that's a worst case scenario, the strange thing was that the organisation did not have mechanisms in place to protect the specifier against unfounded allegations of collusion - do you?

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.

Calvary - film review

Went to see Calvary tonight with Breandan Gleeson centre stage. I would have rated In Bruges and The Guard among my favourite films - now Calvary makes that a trilogy.

There is a trend with that trilogy of Gleeson films but if I shared that with you, I suspect it would be your loss - you'll know when you see it.

While In Bruges could have been released by the Belgian Tourist Board, I'm not so sure that Calvary and The Guard would have the same impact. Yet, you certainly get a feel for Sligo on the West of Ireland - reminded my why I like Sligo so much.

This is really a powerful film. I found it's impact more powerful than 12 Years a Slave and the audience seemed to leave both with the same sense. I honestly don't know why there's a suggestion that this is a comedy - it's not although there are a few bits which could be straight out of Father Ted.

I can't help feel that the timing of the release on the run up to Easter was deliberate. Certainly, it gets my recommendation as a 'must see'.

Procurement message of the week? PC Blakelock,Tamiflu, violins and mummies from 900BC.

This has been an interesting week and yet, to me, there is a common theme - do you agree?

1. A test with violin experts unable to detect the difference between quality;
2. The NHS said to have spent £473m on medication which appears to have had little additional benefit over lower cost alternatives;
3. The PC Blakelock trail collapsed amid disclosure that witnesses had received from the police prior to delivering incoherent evidence; 
4. An underestimate of 350,000 emigrants from Eastern Europe;
5. Medical scans used to reveal how ancient Egyptians died;
6. Oscar Pistorius claimed to have given an account which is considered so improbable that no one would believe it.

I am sure you can identify the common theme, but just in case, the message for procurement is, before you rely on opinion, regardless of the witness, look for the evidence and be sceptical.

One more time: get the procurement processes right and stick to them.

You may well be familiar with the old hymn 'Tell me the old, old story' - it strikes me there is a procurement version: 'Get the procurement processes right and then stick to them'. Time and again we find those basics just aren't adhered to, yet we hear grandiose ideas of procurement being really strategic - are there parallel universes?

Perhaps operational procurement is forgotten and the cry is that the processes must be wrong - if the processes are wrong, fix them, don't avoid them. Broken processes and worse, unadhered to processes have no place in either efficiency, value for money or competitiveness. They also create the environment for procurement fraud, bribery and corruption.

So let's think about some of the basics which Larne Borough Council, like some many, have got wrong and no doubt will be echoed elsewhere shortly:

1. If you enter into an agreement - get it signed asap;
2. If you have awarded a franchise, particularly in times when firms are going bust, invoice and get payments regularly;
3. If you are using corporate credit cards or pCards make sure you manage them responsibly;
4. Understand what good processes are, adapt appropriately and adopt them, then consistency stick to them.

In this age of 'transparency' it would be nice to see the full report on Larne Borough Council which is said to also express concerns on the award of contracts. 

Those unaware of the Northern Ireland local government may not realise that there is a restructuring of councils taking place, while there are currently 26 councils, there will soon only be 11. The restructuring provides a wonderful opportunity for procurement transformation, not only strategically but in terms of processes - it provides an opportunity for NI to become an exemplar. But if you want to get the processes right, it makes sense to understand the lessons from past failures - that can't happen when reports for investigations remain hidden. Let's hope that the Larne 'hidden' report is the last we hear of inferior local government procurement performance - what are the odds?