Wobbles on HS2 business case

It is expected that tomorrow George Osborne will embark on a

different journey planner to justify HS2. The core business justification is expected to shift from reduced travel time to capacity and regeneration.

Set this against the backdrop of MPs recent confidence of having their collective voices heard over military intervention in Syria and you may say this shift of emphasis is very brave - it could actually be stoking the fire for those against the whole project.

I have discussed HS2 many times but it has struck me, from early on, that there is a need to get the basics right in communicating HS2 benefits. I'm not so sure that a good communications strategy for a procurement of this size is to be unclear what the key benefits are.

From a procurement perspective, the key question around HS2, and any other major spend, should be 'what is the problem we are trying to solve?' The answer to that question should then lead to options being generated to solve the problem. Only then can the options be appraised. If the problem to be solved is capacity and regeneration it is highly likely that you would generate different solutions than if the problem to be solved is shifting people and things faster throughout the country.

If HS2 is to get on the right track, my suggestion is that we need to build consensus on what is the problem which needs to be solved - it is a mistake to start from the position of saying "HS2 is the solution, now what is the problem?".

Can procurement learn from the vote on Syria intervention

I'm not going to discuss whether or not I agree with the idea of military intervention in Syria, but yesterday's Commons vote was clearly a setback for some. It was also something of a triumph for what the UK believes is worth fighting for, namely, that democracy and the voice of the people.

We heard of lessons learnt from the past - which must be a good thing. We've heard commentators declare that the vote is also a vote on the PM's judgement and that confidence in that will be irreparably damaged. Sadly, there was also a 'bad loser' syndrome, obvious after the vote, with some of those who failed to win over hearts, minds and votes denying the value of our treasured democracy and instead railed about the international implications. While Cameron said he "got it" the post-debate debate may have made us wonder which particular part of the message our leaders actual did get. However, I think there are some lessons from last night which are relevant to CPOs, particularly when they want to sell a new procurement strategy:

1. Make every effort to learn from the lessons of the past - what's gone wrong is unlikely to have been forgotten and the legacy needs to be addressed before you can go forward;
2. Regardless of your academic and professional pedigree, you need humility and excellent communications to bring key stakeholders to a position of accepting your strategy if it is to be adopted and implemented;
3. You need to bring people with you and be seen to really, really, really listen to their fears and concerns - that means being seen to have taken those concerns on board and reducing, if not removing, their fears;
4. Remember that key stakeholders are influenced by their key stakeholders too, for example, the PM appeared to view winning MPs voted as critical, but the MPs may well have viewed their own constituents voices more precious and recognised the problems they would have selling the strategy on doorsteps; 
5. Recognise that losing credibility in your judgement will have long-term adverse impacts on virtually every piece of advice you subsequently give; 
6. It is far more important to be viewed as having the good judgement to rip up a proposed strategy which lacks stakeholder ownership than to be so precious about it that your credibility is lost;
7. Forcing through an unpalatable strategy is 'no win' as you can never predict with certainty the future and those you were against the strategy, with the benefit of hindsight, can always say, "but if only ...";
8. Don't create unnecessary deadlines for decision-making - if you try to force a deadline on people sometimes it's easier for them to just vote for 'no change';
9. If you can't sell a strategy it was unlikely you were ever going to successfully implement it;
10. If you were unsuccessful in selling a strategy there's little since in saying "but I still know best'.

A sad reflection on social care procurement

Last night's Newsnight didn't do any favours for public procurement and particularly those responsible for social services.

In summary, the report highlighted that some organisations, contracted to provide home care, only pay staff for the specific time the careworkers are in the users home (no travelling time getting between users locations is paid for) and, as a result, the carers, considering all their actual working time, are paid below the minimum wage.

For quite some time it has been recognised that it makes good sense to keep those who need care in their own homes as long as is safe - it improves their quality of life and reduces the national costs of placing users in care homes. That being the case, the aim should be to ensure good quality home care provision which also means paying for appropriate quality staff.

We have discussed some of the implications of when care provision goes wrong in the past.

Bad as that is, the real disappointment was in the interview with the social services (ADSS) spokesperson. Her analysis was that bidders could choose what price to bid at and the conditions of employment. If that was actually her justification it is seriously flawed. Those procuring social care need to recognise the risks of contracting at rates which are unsustainable and cannot deliver the level of service required. There needs to be much more due diligence.

All together the Newsnight report was not good for those who procure social care, but worse it was not good for those who are dependent on that care if 'lowest price' regardless is the strategy now being pursued.

Lean or anorexic procurement

If you cast your mind back to 1993 you may recall the seminal book by Richard Lamming on Lean Supply. It wasn't actually called Lean Supply but 'Beyond Partnership'.  That was closely followed by Peter Hines' 'Creating World Class Suppliers'. Many other discussions at the time were indicative of a paradigm shift in procurement thinking. These were more than conceptual ideas, they were based on the hard evidence of what worked. The key change was a recognition that 'adversarial' relationships were not always appropriate, that while there was plenty of talk of partnership, there was a need to go 'beyond partnership' and adopt 'lean'. You may well ask which procurements would be most appropriate for 'a lean strategy' - well, in general terms, those procurements which are strategic.

Fast forward 20 years and we hear the rhetoric of 'lean sourcing' within UK government as the panacea to all woes. Yet have they really understood what 'lean' means. Lean is more than taking costs out of the system and drawing closer so that innovation can flourish. It also requires an entirely different approach to buyer/supplier relationships and contract management.

We have the theory and gospel of 'lean' in government procurement and we can set that alongside the practice, for example, the transporting of prisoners and tagging services. Let's consider Serco, who would have been assumed were a strategic partner of the government but now appear to have fallen from favour on both those contracts - the MoJ have called in the police to investigate claims of fraud in prisoner escorting and there are parallel claims of overcharging for tagging 

This does not exemplify lean on either side of the dyadic. The notion of calling in the police to investigate fraud, claims of overcharging and even allegations of some questionable contract management are an anathema to lean.

It would be possible just to throw stones at Serco. It would also be possible to throw stones at MoJ. Both those approaches may bring short-term solace for one party but wouldn't really help public procurement as we approach the economic recovery. However, we could consider this an opportunity to adopt a more strategic approach and find out what went wrong in melting pot of the theory and rhetoric of lean, the current cost reduction focus and the day-to-day breakdown of contract confidence. Either way we need to revisit the implementation of lean within the UK public sector during a time of 'bust' as opposed to a time of plenty. 

What does capping HS2 spend mean?

There's a peculiar paradox with HS2 - while the proposed costs just keep on taking from the public purse, for a blogger the whole saga just keeps giving.

I first highlighted problems in the approach away back in January and there's been a steady stream coming down the track since then. We also had the high profile reporting of the Institute of Economic Affairs expectation that the real cost is likely to be £80bn, even though Steve Ashcroft had blogged to that effect early in July. This week there appears to have been confusion among key stakeholders what the budget comprises: the Transport Secretary says £42.6bn, the Chief Executive charged with the implementation says there's an extra £7.5bn for rolling stock, and the Treasury are reported to be working on a figure of £70bn.

Now we have learnt, amid nervousness in the Labour ranks, the Shadow Transport Secretary wants to cap the spend at £50bn. What does that mean and what are the implications?

1. There needs to be clarity what the budget is supposed to cover. While there is clearly confusion already regarding the budget, if Labour propose to cap at £50bn, then what is counted within the £50bn needs to be made clear, otherwise if they come into government, they risk being castigated when the first pound over £50bn is paid.
2. What is the agreed categorisation and split between capital/revenue costs? If that isn't clear there is a danger of reallocation to mask overspend.
3. Are the consequential costs of expert opinions, compensation to those adversely impacted, the costs of legal challenges, etc., also to be met from the £50bn allocation?
4. What are the likely consequences of spending £50bn and then saying 'no more'? Will £50bn be viewed as sunk/wasted?
5. If the budget is to be capped at £50bn, what is the most appropriate way to sequence the investment to ensure, if the plug is pulled, that the maximum benefit can be achieved from the £50bn spent and how will that scrutiny be provided?

It is quite easy to make a statement of capping expenditure but I fear this could come back to haunt the Shadow Transport Secretary.

My own personal prediction is that we have not heard the last of HS2 procurement, by a long shot.

Make 'em laugh 'cause shortlisting is no joke

Saturday will see the announcement of who wins the Foster's Comedy Awards. Thursday's Times carried a brief story on the shortlisting for Foster's Comedy Awards which I'm sure brings a smile to the faces of many in the procurement world - the shortlist is normally restricted to five or six, but this year the judges ended up with seven. The judges had two rounds of voting and six hours of arguing before deciding the shortlist should be longer.

Like all good procurement evaluations the method was set out in advance and communicated but it does not appear to be as robust as you would expect in a procurement. How do they protect against claims that someone is dropped in the early stages just to make it easy for a judge's personal interest in another competing joker and giving them a clearer run? Of course comedy is in the ear of the beholder - some of those shortlisted would not bring much of a smile to my face. So it must be very hard to bring some sort of objectivity to the gruelling task of listening to non-stop funnies for three weeks.

I don't get the impression there was any form of weighting and scoring. Nor does there appear to be any numerical restriction on the number who make the shortlist. Convention and tradition restrict the shortlist to five or six, but this year that was increased to seven. Is that a good thing? Well in the Comedy Awards, I suspect just being shortlisted brings dividends and increased business. In procurement, increasing those on the shortlist brings additional costs to both sides.

On the plus side of the Comedy Awards, every eligible contender is guaranteed their day in the footlights with at least one of the judges evaluating their performance - that's a lot better than some procurement shortlisting I have been aware of where submissions have been dismissed without even being read.

When the winner is duly announced there may well be some critique in the culture world, but it is unlikely to end up in a costly court case. However, the judges clearly didn't find shortlisting as easy as they would have hoped. Six hours of arguing - can you honestly recall that level of debate in any procurement shortlisting discussion?

It's hard shortlisting potential service providers, as the Foster's judges will have discovered. It does strike me that procurement professionals need to consider how others, beyond the profession, manage shortlisting and evaluation - I'm not joking, we may pick up something useful.

Supply Wars: Spain v Gibraltar

I've decided to return to the theme of Supply Wars but from a different tack. It's now a fairly daily occurrence hearing news of the diplomatic abbess between Spain and Gibraltar. Today's news was slightly different in that we are now seeing public procurement becoming one of the chess pieces.

In a nutshell, Gibraltar had ordered 10,000 tonnes of sand from a Dutch company but less than 3,000 tonnes has been received. The Spanish have intervened and halted the supply in response to a claim from an environmental group that the sand being supplied is from a protected area.

Gibraltar claim they have taken every step to ensure that the sand has been legally extracted and that the Dutch provider says it has provided copies of the relevant licences. I have insufficient understanding of the specific procurement to comment on the efficacy of the procurement.

To me this has the hallmarks only of a first skirmish - an end of season shortage of wouldn't normally make the news. However, skirmishes generally fit within a bigger theatre and that's what should be the focus. Procurement has been demonstrated to be both political and tactical, my suggestion is that it also needs to be looked at more strategically.

I if were advising both countries I would suggest a mapping of the existing and anticipated trade using Kraljic's matrix. If I were advising Spain I would target, for supply chain disruption, those procurement's in the 'Bottleneck' quadrant. If I were the UK and Gibraltar, on the other hand, I would now start to put in place risk management strategies and alternative sources for those 'Bottleneck' categories. This isn;t protectionism, this is pragmatism.

Of course while I'm talking about strategic procurement at a state level, there is also a need for those in the UK and Gibraltar, who procurement from Spain and it's sympathisers, to also carry out a risk assessment and put in place mitigating plans. This could get very messy in the supply chain world.