Francis Maude speech on public procurement (part 2) – the bad & the ugly

So on Tuesday we featured what we saw as the good stuff from Francis Maude’s speech last week – now the “bad” and the “ugly”...

"Bad"

  • The speech demonstrates considerable confusion around commissioning and procurement – (as delineated here by Dr Murray). The Maude speech  seems to see Commissioning as the bit of procurement that comes before you start the formal tendering process – but then you wouldn’t have an “Academy” just for that part of the process? And the wider public sector uses the term very differently anyway, where Commissioning has a very broad scope, and arguably procurement is a subset of commissioning rather than vice versa! Confusing at best.
  • The “presumption against competitive dialogue” seems contradictory in terms of other goals and initiatives, such as closer engagement with suppliers. It has been over-used as a procedure, but used properly, it does give the chance to engage in a more constructive manner with suppliers during the process, which can help get to innovative and outcome based contracts. What is ironic is that for the first couple of years after the procedure was introduced, Treasury (OGC) were worried it wasn’t being used enough.  Now it’s apparently used too much. What’s the betting in a couple of years time...?!!
  • In future major procurements should only take place after we have spoken informally to our potential suppliers. So we can make swift off-the-shelf purchases where appropriate or quickly choose the right supplier for the job”. We commented on this last week – it’s a charter for corruption and certainly doesn’t help SMEs – which suppliers do you think are going to be queuing up for the ‘informal chats’? It won’t be the SMEs, it will be IBM, Accenture, Capita.. etc. The other problem is sheer resource. Does anyone really think procurement teams (or budget holding areas) have the manpower to respond to every supplier who wants a chat prior to the procurement starting? Of course it’s a great idea in principle, but it just won’t happen, so we risk dashed expectations here.

"Ugly"

  • The “anti-UK bias” in public procurement claim in the speech seemed incredible, flowing from the fact that a mere 3% of UK public sector spend goes to “foreign” suppliers! There is of course no logic in that analysis whatsoever. And how do we define “non-UK suppliers”? Presumably IBM, Accenture, Siemens, Fujitsu count as “UK suppliers” because they have offices here? It’s all pretty meaningless.
  • As we said at the time, the criticism of public procurement seems overdone for a number of reasons. Firstly, UK public procurement is well regarded around the world – talk to people in the Middle East for instance and ask whether they would rather model themselves on UK or French practice. I’d like to see the evidence behind the comparisons of costs between the UK and France, and the example given of a charity spending £800,000 before they could even compete seemed .... interesting let's just say!
  • The intent to support and increase business with SMEs,  innovative suppliers, mutuals, joint ventures etc is fine but there’s still a real lack of detail around just how this might happen. The creation of Crown Commercial Representatives, the exchange programme with large suppliers, and giving large firms a Ministerial “buddy” – these tangible initiatives all seem to work in the opposite direction to the intent around SMEs.  Eliminating PQQs as we’ve said before doesn’t necessarily help SMEs if all the questions just get rolled into a single huge “tender” document.
  • We need to see more creative yet tangible steps if Maude is serious about innovation and SMEs. I am unsure whether he really is or whether it is lip service - there was nothing to give a clear indication of a serious commitment here.  How about breaking up large contracts (mentioned but only very aspirationally)? An “innovation launch pad” but with real contracts at the end of it? And what’s happened to the single registration system for suppliers?

So in the final part of this series, published early next week, we’ll sum up, and put our head on the block with some thoughts on the way forward..

Voices (3)

  1. Dan:

    “commissioning” is generally used by people who think they are too important to be merely ‘procuring’

    Too cynical?

  2. flog:

    I seem to recall in the distance past that when publishing an EU award notice there was a field that asked about where the product was manufactured – perhaps this should be brought back then we’d really see where the business (profits) are going – the UK agent/subsiduary or elsewhere.

    Regarding the charity spending the £800k – maybe they were using Alix (or someone like them) to ‘help’

  3. Philip Orumwense:

    Peter – well articulated. Reducing the Procurement timescale, early enagement wih the market, eliminating red tapes – PQQs etc, introducing innovative contracting methodologies – Mutruals, JVs, Third Sector engagement, Localisation etc, the SME engagement agenda, introducing a virtual Academy and the License to Source can all contribute to the extensive cpability and competence that already exists within the UK publc procurement domain.

    However – it is worth noting that the procurement process itself is only a minute part of delivering a procurement outcome as you and I know it. the interative process of defining the requirements, specification, outputs, outcomes and key deliverables and the perpetual revisiting and changing of already baselined positions during the procurement process extends beyond the realms of procurement professionals. For these initiatives to be trully effective, they must be directed at the entire organisation – otherwise the house that jack built may well become compromised.

    Similarly – there appears to be a contradiction on value delivery through best shoring – defined simply as products or service acquisition from the most optimum shore – on or off shore, especially when balanced against the need to keep UK jobs secured in the UK – the Siemens/Bombardier episode being a critical case in point. Open Borders whilst creating access for improved value for money delivery may well lead to the relocation of UK jobs over seas – this contradiction will require some clear dilneation especially in policy terms as both positions appears to be at odds with each other .

    Sincerely,

    Philip Orumwense

Discuss this:

Your email address will not be published. Required fields are marked *