Local Authority Procurement – An Uneven Playing Field for SMEs (part 2)

(We're delighted to feature a guest post from Jim Lynch of PLC Leisure Consulting  - more about him at the end of this piece. In part 1 yesterday we heard about the hurdles Lynch's firm had to jump through to bid for a small piece of local authority work).

It’s clear that at this council at least, procurement processes and systems have been put in place not to get the job done but to protect people’s backs against future problems.  In a risk adverse culture no-one was either able to or prepared to challenge the “professional” system in case of difficulty down the track.  Lazy management at a number of levels meant it was easier to send out a standard PQQ and to use a standard assessment than to identify what was actually needed and edit the PQQ accordingly.

Most legislation and associated systems, such as H&S, have a large element of appropriateness and proportionality built in. Why doesn’t procurement in the public sector?  Why the obsession with standardisation and process rather than simply getting the job done?

In the old days it was far easier for an SME to win consulting work.  You simply had to put the effort in.  When a council or public body issued a brief we’d take the trouble to make an appointment to meet the prospective client. In the light of this meeting we’d do further research and then write a proposal setting out our approach, our expertise and our fees.    The council would then choose their preferred consultant in the light of several proposals, perhaps backed up by interview and after having taken up references.    By taking the commercial risk of putting in effort up front we’d have a better chance of identifying key issues and thereby develop a competitive edge.

Nowadays, the system encourages sloth and discourages effort.  Councils are reluctant to meet beforehand “in case you get an unfair advantage”; they usually require that queries are in writing and answers are circulated to all bidders, thus reducing the chance of an imaginative approach; they emphasise processes and systems over expertise and knowledge, thus automatically favouring large companies with bid writing teams over SMEs. We can see why some of this might be important for a £100 million capital development but for a playing pitch strategy contract worth < £10k or as in another case study recently a £4k training course contract!?

Why cannot the procurement industry acknowledge that one size does not fit all and approach contractor selection with a degree of flexibility and common sense?   Why not look at what is actually needed to fulfil the contract successfully and then select accordingly?   If you are looking for building contractors, emphasise the health and safety procedures, if you are looking for a security firm look at their fairness and capability of their recruitment systems, if you are employing a catering contractor look at their hygiene processes. Don’t ask all companies about everything.  We were recently involved in a library project where one of the standard selection criteria was the quality of catering!

North Ruralshire wanted someone to produce a supply and demand analysis for football and rugby pitches – what had an equitable recruitment policy to do with this?  Their consultant had to assess the quality of grass and changing rooms – how could this possibly lead to an insurance claim for £10 million?

So let me ask a number of questions: -

  • Does CIPS, the government and the profession recognise the problem?  Because, if not, SMEs are in deep trouble.
  • Is there recognition that the additional compliance are simply recharged to the client through enhanced fee rates?  So the process actually achieves worse value for money for the procuring body.
  • Are there any moves afoot to introduce concepts of appropriateness and proportionality at a senior CIPS, Government level or elsewhere?
  • How will you go about adopting a common sense approach to the recruitment of consultants and other service professionals?

And as a forthcoming attraction – the work of the devil that is procurement portals!!

Jim Lynch

Ploszajski Lynch Consulting Ltd 

PLC is Tony Ploszajski ex Sport England and former Cambridge athletics blue and Jim Lynch who comes from a leisure management background.  We’ve been going for some 12 years during which time we’ve developed an expertise in feasibility studies, funding applications, playing pitch strategies, market research and sports development plans.    We’ve got a track record of over £40 million of successful funding applications, carried out playing pitch assessments for two dozen councils and never in 12 years had a contract terminated. 

Voices (4)

  1. John:

    You have clearly experienced some very poor treatment and poor practice. I’m not sure why you have concluded that this is the standard practice across local government?

    Whilst I accept that there are too many examples of poor practice, most of your questions work from the assumption that the examples you have given are an accurate description of standard practice.

    I have to disagree with Dan’s comments too. The legislation is based on precisely the proportionality principle that is clkaimed to be absent. Procuremnts are only regulated tightly above a threshold way above any of the examples given in Jim’s piece. Most, if not all, local authorities have their own rules governing processes for “below threshold” contracts which provide exactly the type of flexibility you want.

    Given that you have 12 years experience of winning work with two dozen councils suggests to me that, from your point of view, those 24 Councils probably weren’t setting irrelevant or excessive requirements. |The examples you give are clearly bad practice, the question is, how prevalent is that problem, and how do we eliminate it.

  2. Market Dojo:

    This mini-series of articles reverberates strongly with us. We recall one public sector tender we were involved in where we presented no less than a 90% saving against their previous contracted price as well as that of the winning bidder. Across the year, that saving could easily have saved a few heads in the council.

    However, we were unsuccessful due to the slightly innovative nature of our bid, in that we suggested the council would not need as much of a service element as they thought *.

    Nevertheless, we moved on to work with a neighbouring council, granting them a similar % saving, and they gave us such complimentary feedback from their decision to use us that they are proudly displayed on our Testimonials page. It is a shame that not all councils are so progressive.

    [ * For background, this was a tender for the provision of e-auction software and as such, the council was expecting the need for significant supplier training on how to use the software for each and every tender. However, in the thousands of tenders that have been run on our software in the last few years, involving many, many thousands of suppliers, training has been required….once (for a complex Japanese Auction with a major retailer). Sadly our proposition was disregarded, based on their experience with a legacy software provider. The council we were successful with discovered that we were 100% correct and hugely benefitted as a result.]

  3. life:

    Really did enjoy these very open and provoking articles and thanks.

    My favourite sentence, though, is:

    “In the old days it was far easier for an SME to win consulting work. You simply had to put the effort in.”

    Thank you thank you thank you this is simply priceless!!! It is, to the current grinding long-haul and uremittingly bleak nature of SME management, what “yeah we tried that in the seventies and it didn’t work out” is to change programmes. Absolutely made my day – I’m just going to give up now, although obviously that was easier etc…..

  4. Dan:

    Answers:
    1. Yes, yes and yes. Not that it matters because the rules are created and enforced by the EU.
    2. Yes.
    3. Yes, but local government is different. Its independent from central government and accountable to the local electorate. So concepts of what is appropriate and proportionate differ at each authority depending on the risk appetite of the organization.
    4. Common sense has nothing to do it when there is a risk of challenge by lawyers. Challenges heard by the courts are up by 20% in the last couple of years. This doesn’t include those that were settled out of court or otherwise dealt with. And these challenges aren’t about corruption or undue influence or anything. Its where procurement staff have made an innocent mistake. Or worse, where they didn’t make a mistake but the law is just an expensive grey area and the court interpreted it in the suppliers favour. In this situation, are you surprised that procurement staff err on the side of caution?

    I take your point, and there a lot of questions and information requests that are inappropriate. Most authorities are moving to a category management model, and this (in theory) should help (the example of the catering question is a case in point). It would be interesting to see if North Ruralshire operates on a category management basis.

    I prefer to think of this as ‘having your cake and eating it’. Procurement staff rigidly follow the process because of the increasingly likely chance of a challenge by tenderers who are overjoyed that they can challenge procurements and that the system is so weighted in their favour. At the same time, those same tenderers are complaining about the fact the process is being followed so rigidly; Cause = Effect. I don’t think you can have it both ways.

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