Exclusive! Major Government procurement exercises to include “bureaucratic” assessment of supplier performance

A new UK Cabinet Office Procurement Policy Notice was published last week, without great fanfare. It looks at how central government organisations should take into account past performance of suppliers when running procurement exercises and awarding contracts.

“Departmental Bodies should in future procurements include minimum standards for reliability based on past performance”.

As usual for a PPN, it is thorough and well constructed. It only applies to contracts for information and communications technology, facilities management or business processing outsourcing with a total anticipated contract value of £20 million – or frameworks where there might be call-offs of that value.

So that is a small percentage of total procurement activity, but nonetheless this could be a significant development, as it may lead onto its application more widely. It’s also one that not only procurement people but also supply side firms need to note – and take action. For procurement people, there are a whole host of necessary steps (laid out in the Policy Note) to make the process legally compliant.

Buyers will ask bidding suppliers to provide a list of major contracts for the last three years  and “certificates of performance” for those contracts. Those certificates ideally will come from the appropriate previous customers; if the supplier can’t get them, they can self-certify their performance.

Where the customer is another government body, they should provide certificates when asked and should also send a copy to the Cabinet Office who will be “establishing a central repository of Certificates and other information which will enable Departmental Bodies, where appropriate, to verify the information provided by bidders to show that they meet the minimum standards for reliability”.

Where a Departmental Body can’t certify that the supplier has performed satisfactorily, then they need to give the reasons why performance was not in accordance with the contract.  Buyers should then check the validity of the Certificates – by some random (but fair) sampling of those self-certificated contracts, for instance  – to see if they stack up against real performance.

I have mixed feelings about this whole initiative. Any private sector procurement executive would think it crazy not to take past performance into account when awarding new business, and this has long been discussed in public sector contexts, so, all very good and sensible to try and include past performance in the evaluation. I’m right behind the principle. However, and sorry to be the voice of doom here, but I have a horrible feeling that the law of unintended consequences is going to kick in.

  • Will suppliers bother asking customers for certificates? Or will the default be a (potentially meaningless) self-certification?
  • Verifying self-certification will be a legal minefield – I can imagine a supplier challenging on the basis that their certificates were checked more thoroughly than another bidder’s. Buyers will have to be very careful here.
  • Another area of potential challenge will be when government customers refuse to certify good performance;  “The Departmental Body may also find itself considering a difference of views between a customer and a bidder as to whether performance of a previous contract was in accordance with its terms (for example where there is a continuing dispute between the parties)”. Indeed! That’ll be fun…
  • And if I’m a customer (government or other) called by a contracting authority, to check on a self-certificate, I might be very cautious about criticising a supplier, knowing that they might then challenge my comments, possibly in the courts!
  • Whether or not the certification is meaningful, this certainly adds yet another layer of cost, time and bureaucracy to the whole process of major procurements, counter to some core principles Cabinet Office has been pushing (reduced time / complexity for procurement).

On the positive side, perhaps this will force suppliers and buyers to be much clearer about just what delivery “success” looks like. If there’s going to be a certificate, it has to be founded on some objectivity around the contract delivery. So there is now an incentive for suppliers to push their customers into better contract and supplier performance management perhaps.

So, overall, this may be worth a try, and if it does drive suppliers into better performance, then of course it might all prove worthwhile. But I suspect the market will perceive this as another bureaucratic burden, it will discourage some suppliers from even bidding, and it may lead to even more dominance from the “usual suspects” in some government markets.

And advice for suppliers - get your Certificates sorted out with existing customers asap – don’t wait until there’s a live procurement and you’re depending on rapid responses.

 

See our new Spend Matters search4 procurement website with great procurement job opportunities here!

 

Voices (5)

  1. Cicero:

    Let’s assume the scheme is extended to other areas of outsourcing. Such as court interpreting. Right, let’s sound out those foreign nationals who have been released on bail when no interpreter turned up at court from ‘Capita Translation and Interpreting’ (formerly ‘ALS’).
    ‘Uh, not available, they’ve disappeared into the ether’ (No, really?).
    Ok let’s sound out instead those foreign nationals who weren’t released on bail when no interpreter turned up.
    ‘Uh, 99% dissatisfaction’.
    Ok let’s ask the solicitors or barristers whose day (and/or journey) was wasted due to no interpreter (or the wrong interpreter) turning up for a sentencing hearing.
    ‘Uh, 99% dissatisfaction’. (NB when it’s a major trial, that figure goes up to 100%).
    If you ask any other ‘customer’ involved in the court system, you’ll probably get
    ‘Well, don’t matter to me, mate, I get paid anyway’ (some Crown Court Judges and District Judges excepted).
    I certainly can’t imagine G4S protesting at having to make a wasted journey from Aardvark Prison to Zebedee Magistrates’ Court. Could be wrong of course.
    Incidentally the ‘innovative’ online booking portal means that the ‘linguists’ who are willing to work for peanuts can book themselves for a string of hearings in different courts, all on the same day. They do this to supplement their paltry fees with travel expenses. Of course they rarely make it past first base. Clearly Spend Doesn’t Matter at the MoJ.

    Capita, who will be good at self-certification, will tell you they’ve now got 95% of court hearings covered by interpreters. Yeah, right. And what about the quality of that ‘95%’? What percentage can really interpret, or are vetted, or assessed? Come on, Capita, tell us do. Question: ‘Quis custodit custodes?’ Answer: ‘Capita’.
    If you want to certify Capita yourselves, have a trawl through the litany of stories available on linguistlounge.org. Not for the faint-hearted. By the way, Capita/ALS couldn’t get an interpreter in April for an Abu Qatada hearing. But I digress. But then there’s so much to digress about. Have a look at http://www.thelawyer.com/interpreting-error-leads-to-25000-retrial-costs/1012204.article, not omitting the second last comment which provides a wonderful in-a-nutshell dramatisation of the problem with government procurement in this country.
    Juvenal, the author of the Latin quote above, also said ‘It is hard not to write satire. For who is so tolerant of the unjust City, so steeled, that he can restrain himself…’. As Nick Buckles would say ‘I couldn’t disagree’.

  2. Ian Heptinstall:

    Mmmmm, it is also a good idea to ask a previous employer about the employment history of someone you are taking on…however the drive for risk aversion has resulted in these being meaningless (“Yes they worked for us, between then and then, and in that role. Errr, that’s all I can say about them”). In our private lives we are quite happy to give open feedback as Sam mentioned on eBay & Amazon, but at work, far too often, we are not allowed to!

    This could be a great and long-overdue way to get rid of the cowboys and those suppliers who exploit the public sector system – lets hope the detailed implementation and any associated regulation protects the ability to give an honest opinion, and to then use it in a selection process.

  3. Sam Unkim:

    Do you know this could be relatively painless?

    If they created an adequate scoring criteria table on Government’s Contracts Finder (pre award) with the ability to choose from a list of criteria & apply % weightings etc.
    This table could then flip over, post-award, to be the contract management certification …..
    Contract Managers would be required to re-score the contractors performance against these original criteria periodically (as they should be doing anyway)

    Enquiring by supplier, on GCF, would allow the user to browse through the CM-Scored tables in date, value or compliance order.
    Ebay couldn’t exist without similar (user feedback) data.

  4. Dr Gordy:

    Is this the next iteration of LinkedIn Profile endorsements coming over the horizon?

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