Friday Rant: Is UK Public Sector Procurement in Worse Shambles than the US?

At somewhat of the last minute, I had occasion to be in the UK for the first part of this week, timing that fit in perfectly with the formal launch of Spend Matters UK/Europe. For more on what we're planning for the new site, you can check out my post from yesterday or better yet, start reading mine and Peter Smith's new posts for yourself on the new site. Peter, my partner and lead editor in Spend Matters UK/Europe, brings a significant background in both private and public sector procurement issues. But most recently, he's admittedly spent quite a bit of time doing his civil duty as an adviser and consultant to a range of public sector organizations. When I arrived in London earlier this week, I raced from the airport to see Peter and some of his public sector colleagues speak on the topic of UK government spending at an American Express-sponsored event.

The event reminded me that despite the occasional glimmer of hope on the public sector stage (e.g., decent e-sourcing penetration in pockets of government, not to mention the very occasional use of advanced techniques such as sourcing optimization), general public sector procurement practices are light years behind the private sector. Part of the challenge in the UK is even agreeing what constitutes value in a particular tender, let alone total cost. Is value in the eyes of taxpayers or departments/individual civil servants with their own agenda (including a social component to spending)? The US faces similar Federal, state and local procurement challenges as well, yet it seems that the FAR, the rules governing Federal acquisition, spells things out a bit more clearly.

Another part of the challenge I heard multiple times on Tuesday from both past and current government procurement executives was the lack of visibility into spending. One current government executive told me that his department, which oversees (if that's a fair description) mostly decentralized spending into the billions of pounds on an annual basis, opted to pursue a spend analysis program on its own, but that it's the exception and not the norm to have this type of visibility. This gentleman's words were echoed by the former head of the OGC, Nigel Smith, who suggested that if he had an ability to mandate change, one of the top three things he would do would be to force greater spending visibility across government spending as a means to drive both transparency and strategy development.

The challenges of UK public sector procurement, however, do not stop with inadequate visibility into spending. Its many purchase to pay systems are a wreck. I know one consultant in the UK whose firm was, on multiple occasions, paid twice for the same invoice. And when he contacted the department and returned the amount of the check, it remained un-deposited for one reason or another. Standardized policy and what we often term "demand management" in the US is also a significant challenge within the UK -- and probably worse than in the US. I learned that there is no standard government travel policy (first class, coach, etc.). In the words of Nigel Smith, "everybody is special." Take that first class travel away from civil servants and you'll here cries of "we can't do work so close to others because of its sensitivity."

On the train ride back from our launch event Tuesday night (in coach, I might add), Peter Smith told me that when he worked in the public sector, one person on his team (who was lower down on the pay scale) was surprised that Peter rode in economy when all of the other colleagues he managed rode first class on the same train. In the private sector, this would make for a very awkward moment. But in the UK, the trains keeping rolling down the free spending track, always with at least one first class car that's often contains public sector workers who never even considered economy/coach class as an option -- even when their cost conscience boss is sitting a few cars behind.

Jason Busch

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