More on UK Government procurement announcements

Having considered the supporting material issued last Friday, what have we discerned that wasn’t immediately obvious around the formation of “Government Procurement” (GP) and the other  UK government procurement announcements?

The overarching headlines include the plan to “create formalised agreements between GP and Departments to deliver centralised procurement and to improve capability, with a focus on Policy, People, Processes, Technology and Results”.  The target is to “increase centralised spend through GP by Departments and by Category from <£2.4Bn to >£10Bn”.

The overall ‘enabling technology’ model looks sensible. The front end is a ‘Government Procurement Portal’ which will be the first point of contact for government and suppliers.  A Spend Analytics and reporting engine will link to an eSourcing tool – that capability for those two areas will be provided after a procurement exercise which is ‘being planned’.

Then the SME registration system – and some sort of quotation ‘engine’ for sub-EU tenders (don’t fully understand that), as well as the ‘front end’ eMarketplace with catalogues for common goods will be powered by ProcServe.  We understand that business is being done under a current but somewhat re-negotiated ProcServe contract.  There will also be ‘specific category tools’ – punch-out, integration with supplier sites etc. The Marketplace feeds into the various departmental ERP / P2P systems.

But we’re still not totally clear how the interface between Government Procurement and the departments is going to work.  GP looks largely like Buying Solutions, but does now appear to include some people from DWP Norcross, HMRC Salford and Home Office Newport, and Supply Management talked about 30 staff transferring from departments.  So perhaps the 30 represents staff in the nine GP categories from those 3 Departments?  And does this mean that all the other departments will be cutting heads across the GP categories? That would seem to be the likely outcome, but the exact shape of the ‘people’ strategy is still a bit of a mystery.

In terms of funding, GP will operate on a similar basis to Buying Solutions in that providers will pay some small margin to GP. Any surplus will then be ploughed back into training of procurement staff – both in GP and in departments we believe.  That’s a neat idea; but GP will have to be careful as to the level of surpluses, as departments will object if they think they’re being used as cash cows to fund fancy training courses!

The concept of a ‘licence to operate’ for staff is still being developed – the idea being that procurement people will have to go through some structured and ‘intense learning’ programme before they’re let loose on procurement or contract management tasks.  There’s talk of a ‘virtual academy’ with webinars, online tutors, course books, e-learning etc. Which all sounds very leading edge.

CIPS is involved here at the moment in the conceptual work, but we’ve been assured that the intention is to go to market if and when this turns into a commercial requirement.  That must be right – while CIPS is obviously a strong option for delivering this sort of programme, PMMS, Positive Purchasing, Accenture, IIAPS and probably others would feel they should have a chance to pitch for the work.  (David Noble, CIPS CEO, also sits on the Procurement Executive Board which is steering this programme, so I’m sure everyone is well aware of the need to avoid the perception of conflicts of interest here).

There’s some good stuff here without a doubt. But there are also some fundamental issues that can only be addressed when the programme is really up and running.  For instance:

  • How do you get commitment baked into the deals so they really are market-leading from a value perspective? (See our recent series on the pros and cons of framework agreements and our White Paper here).  And how strong is this ‘mandate’ for all departments to participate? The programme could be undermined by suppliers saying directly to departments “I can offer you much better value than the GP deal”.  You’re going to get some of that whatever you do, but it has to be minimised by the quality of the contracting process.
  • How do you balance the drive for using SMEs, innovation, or localism, with the likelihood that large, national suppliers are going to come through on large, national tenders?  It’s very clear from the first 2 GP tenders in the market – Travel and Office Solutions – that they won’t be won by SMEs!
  • How do you move quickly and pursue lean principles when you have so many disparate stakeholders; we’ve seen the danger of contracting without getting stakeholder buy-in (the NHS IT programme for instance). On the other hand, GP can’t move at the speed of the slowest participant, or nothing will ever get done!

So, it’s a professional and confident approach from Collington, Smith and co, and conceptually it all makes a lot of sense.  But they’ll be the first, I’m sure, to acknowledge that the test will be in the outcomes - the savings generated, the customer and market acceptance. But it’s a good start.

We’ll come back tomorrow to the SME action plans, which were also released last week, as they deserve a post to themselves.

Voices (11)

  1. Final Furlong:

    New riders, but same old race, riding the same old horses, governed by same old officials, applying the same old rules. Some new hurdles.

    1. Knackers Yard:

      Expecting the same old result?

  2. Epoch:

    Christine, I’m amazed that no one could tell you that the IDeA marketplace OJEU scope was only for Local Government, just as the eProcurement Scotland OJEU scope was restricted to Scottish Public Sector organisations. Zanzibar would never have been sourced if the eProc team in OGC at the time had been able just to piggy back on either of those deals.

    1. Christine Morton:

      Nope – and I’m referring to the technology side, rather than the contracts on them. Are you saying they couldn’t use the same software?

      1. Epoch:

        Not at all, Zanzibar did use some of the same software as the other public sector marketplaces.

        1. Confused:

          I’m a bit confused (and maybe a bit simple) – instead of multiple marketplaces why not one single platform containing every contract available to government bodies.

          Aggregate all the spend, drive down costs.

          Seems simple. What holds this back?

          1. Christine Morton:

            People.

  3. Christine Morton:

    Ahh.. having read another article I now understand that Buying Solutions is being “subsumed” into this new Government Procurement body – apologies I missed that bit!

  4. Christine Morton:

    I must also be getting old. GP and Buying Solutions – two organisations with very similar remits and same funding models, but both part of the public sector…

    This reminds me of when Zanzibar was debuted, and no one could tell me why government had spent its money on another marketplace when the IDeA marketplace had already been developed with public sector money. Public sector bodies were confused by the mixed messages.

  5. Elephant in the room:

    Am I the only one feeling somewhat concerned that all this change is being proposed and delivered by the same people that created the ‘problems’ in the first place. This seems to be exactly the routine that has been followed by central government over the last decade with a successsion of reviews, big improvement projects, and talk of big savings coming to very little indeed and then inevitably leading to yet another big strategy to sort it all out……around Gershon time procurement spend was about £100bn and now it is over £200bn…..where are the real savings?

    I don’t doubt this is jolly god news for keeping people busy in Whitehall but when does the poor old tax payer get some relief ….

    I guess we just need to sit back and watch what happens over the next couple of years, but my hopes for radical reform across the WHOLE public sector, not just a fragment of spend in Whitehall, are not high.

    ….and it’s only Tuesday!

    1. Stars and Stripes:

      ‘Elephant in the room’ makes some very good points. Same people shuffling deckchairs whilst the boat bobs along – Collington et al are focussing on 5% of public sector procurement spend – who is worring about the 95%? This is not transformation. You do not transform anything by doing what you did before – even if genuinely trying harder – with the same people responsible for delivery.

      When the Labour government got us into a huge financial mess we kicked them out, but this only changed the people at the top. The people on the ground who created the frameworks for spending all the borrowed money are still around, doing the same jobs with slightly different reporting lines. How about moving to the American model – when a new President arrives everyone resigns and he gets to appoint a whole new delivery team?

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