Whats happening with Government Procurement Service? (Part 2)

In our post yesterday describing the change programme at Government Procurement Service, we discussed the focus on data.  Getting suppliers to submit their monthly returns is a bit of a crusade for David Shields, their MD – he says "if they don't even do that, how can we possibly manage them properly"? So suppliers are being pursued to get the appropriate data from them in a timely fashion – something that certainly didn’t always happen in the past.

We also mentioned savings measurement approaches – the focus now is on delivering real savings across Whitehall. The methodology is clearly going to be more realistic than previously, although the detail is still work in progress. But as an example of the principle, if Government Procurement Service encourages use of a lower specification item, their revenue from that category may decline, but they will have helped user organisations save money. So the savings measures need to take that sort of occurrence into account. Indeed, their whole raison d'etre is now based around getting control of designated categories and delivering savings to Departments, rather than simply increasing overall turnover.

In terms of their own costs, Shields has already reduced running costs (as required of pretty much all parts of Cabinet Office and indeed central Government), and staff numbers will be down by 53 through a voluntary redundancy scheme. He's also looked critically at priorities; identifying one area for instance where large sums had been spent on external contractors, without any tangible outcomes.

Sticking with people issues, there's a drive to increase professionalism in the team, and if Government Procurement Service does make a surplus (it will be funded as previously by a small percentage fee from suppliers), that will be re-invested in training, not just internally but throughout central government procurement.  It’s not just a training thing though – recruiting the right people is key. For instance, in the Energy category, energy traders have been employed as well as more traditional procurement people. Their corner of the office looks like the trading desk in a commodities firm, with screens giving real time market information and pricing data.

They are also recruiting a Director of Sourcing – a management top team role - to manage the whole category contracting and supplier management process. That is obviously a really key appointment so we'll watch that with interest.

Again, measurement and data are key themes at category level - being able to prove that this works and delivers value. I mentioned a previous NAO report that, although it was quite positive about Buying Solutions’ and OGC's energy work, was not able to report evidence of tangible savings. “We've got to be able to show auditable savings - it's essential” was Shields' comment.

On the commercial side, there is a focus on re-shaping agreements to get better value through mechanisms such as cost breakdowns in contracts. There’s an interesting debate to be had of course about every category strategy, and I’m sure we won’t agree in every case, but from talking to a few of their category people, there appears to be a positive attitude to looking at different ideas and options.   We talked about SMEs and Shields believes that in some categories there will be contracting strategies that are more positive for smaller firms than we've seen so far in recent Print and Office Solutions categories. But there's little doubt that delivering value and savings is the prime motivation here.

On the customer facing side of the organisation, Helen McCarthy, ex NHS PASA and a highly respected senior manager, is in charge, and new measures of customer satisfaction are in place, based on a "panel" of key stakeholders. Again, there is an admirable focus on realism in the data. The new measure shows  satisfaction ratings of aorund 60% - not bad, but a long way short of the previous rating. But the new process is a lot more realistic and meaningful, and they will be aiming to improve service and aim for the 80s and 90s.

Shields has a refreshing attitude to working with other collaborative bodies, particularly the Pro5 who focus mainly on the local government and education sectors.

“They can use our agreements without worrying about paying any commission – I just want to avoid us all duplicating work, wasting tax payers and suppliers’ money” he says.  While they're no longer marketing themsleves as actively to the wider public sector, “we will publish our agreements, so if they're good, then other public organisations may want to use them”.

There's a lot more to be done of course - we'll make a couple of suggestions that may be worth considering in a subsequent post.  However, it is clear that this is not merely a cosmetic re-badging of Buying Solutions – this is a genuine and significant change, or set of changes, and they're being approached with drive and energy. Whether the end results will live up to expectations, we'll find out over the next couple of years. But at the moment, given the start they've made, my money is on a successful outcome.

Voices (4)

  1. David:

    Without more closely managing the commercial practices employed by some public authority based organisations who act as procurement bodies, how can you possibly proclaim that tax payers money is not being wasted? I have come across a number of questionable practices that should be of real concern and yet were ignored by the former OGC when brought to their attention, highlighting that the process of collaborative procurement was more about creating a power base of spend than delivering actual value. What also bothers me is that every few years the way organisations like Buying Solutions operate, the mandate from a central procurement policy driver and the services provided changes, with the new approach slating the previous offering. So how can and why should public sector buyers have any real confidence that the latest offerings will actually deliver value? This is particularly poignant when buyers have had no real choice about who they can work with during and now that the centralisation process in certain categories has taken competitiveness of service delivery providers out of the equation. The fact is that if public authority and other government based procurement providers and associated framework agreements were actually good, supported by excellent end-to-end service delivery, there would have been no need to shoe horn public authorities into them – the authorities would have been compelled to act according.

  2. Final Furlong:

    A buying authority in the wider public sector won’t be able to use any agreement where it hasn’t been listed as a named authority on the OJEU (remember the Office Services tender – the first one out of the blocks – it listed all of the Authorities).

  3. Dan:

    “While they’re no longer marketing themsleves as actively to the wider public sector, “we will publish our agreements, so if they’re good, then other public organisations may want to use them”.”

    This is slightly worrying, as the wider public sector spends a huge amount of money, and its effectively being left to its own devices. With the abolition of the RIEPS, this will mean that it will up to the various purchasing consortia (of which i feel there are too many – the regional consortia, PRO5, PfH, Fusion21, Consortium Procurement….) to drive collaborative purchasing.

    What I’m starting to notice is that this is not true collaborative working, but simply the establishment of more framework agreements, as there is no overall leadership (though i’ll admit that this view is based purely on my own observation).

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