What’s the next big issue in public sector procurement?

So, as we wait for more information to emerge from the reviews of the West Coast Rail franchising problems, and the protesters with their placards reading “Free the West Coast Three” gather in Horseferry Road, we’re launching a new series here. We haven’t got a good title yet – well, not one that won’t get us banned by Google – so any ideas, gratefully received.

But the idea is to look at other UK public sector procurement issues that might hit the headlines over the next few months, for whatever reason. Although let’s be honest, we’re probably going to feature stuff that is high risk or appears to be in some danger. However, we will also feature upcoming events or projects that could turn out to be huge successes.

We’re not doing this to knock the public sector, I would stress. We’ve been sometimes lonely supporters of public procurement through various ill-judged politician’s remarks and other criticism. Rather it’s that we believe the more light is shone on projects and procurements, as early as possible, and the more debate takes place, the less likely we are to have another NHS IT disaster or Fire Control fiasco.

Now this Government has generally been good in terms of transparency and openness, but they have not allowed publication of Gateway reviews, for instance, which they said they would – we’re still waiting for some summary information which is now promised. So we feel there may sometimes be value in raising a few issues we’ve come across in our research, Googling and the odd conversation in a bar somewhere...

So here are today’s three interesting areas to watch out for in the next few months.

1. Rural Broadband – a project with £ millions in public funding, to provide broadband networks to rural areas of the UK, now under the auspices of the Department of Culture, Media and Sport. Not a Department with a great depth of procurement expertise, we might note. A framework contract was let which required  £3 million of consultant and legal fees (so much for clamping down on consulting spend...)  and ended up with just  BT and Fujitsu on the list. The intent was that local councils could use that to choose a supplier to install the broadband services.  Now apparently Fujitsu are not bidding for the “mini-competitions” – is that related to the Cabinet Office blacklist? Or because the contracts aren’t large enough for them? Or because they think BT are bound to win? Whatever the cause, not a good situation though in competitive terms, with what is in effect a monopoly supplier, and now we’ve seen a “whistleblower” sacked after information he sent to councils to help them get better value for money (and wasn’t very favourable to BT) was leaked to a blog. Curiouser and curiouser.

2. It didn’t get much national publicity, but the decision (or the “likely decision” to be precise, as some of this was reported in advance of formal announcement by the Trade Union representing the staff involved)  by the Home Office to award the Disclosure and Barring Service (DBS) contract at the Criminal Records Bureau  to Tata Consultancy Services rather than Capita, the incumbent, was surprising and bold.

“A brave decision, Minister” as Sir Humphrey might have said.  The contract is worth something like £60 million a year in revenue according to some estimates.  Tata are clearly not to be under-estimated, as one of India’s largest and most successful firms, but this is a little bit new for them, and it’s pretty high-profile stuff!  We’ll keep our eyes on the switch-over and implementation here – the contract with Capita expires in March next year.

3.  If you enjoy blood sports, read the Public Accounts Committee (PAC) minutes here of their review of  the Ministry of Justice (MoJ) Language Services contract, used mainly to provide translators and interpreters in Courts. This was in follow up to a fairly critical National Audit Office review. It’s hard not to feel a bit sorry for the civil servants involved when you read the transcript, and also I wonder how Vincent Godfrey, the Ministry of Justice Commercial / Procurement director managed to avoid appearing. Ann Beasley, the Director General Finance and Corporate Services, who I assume is his boss, took the rap instead for what the PAC certainly considered to be procurement failings.

It’s an interesting case, in that a large contract was awarded to a small firm, ALS, who then had issues with engaging the staff, generally independent contractors, that the courts needed. Ironically, MoJ didn’t apply the old “don’t give a firm a contract worth more than 25% of turnover” rule to ALS – I’ve always encouraged people to use judgement rather than applying set rules (I have even written guidance for Government on that). But in this case, the PAC argued MoJ should have followed the “rules” because unfortunately ALS struggled to meet the client requirements, and were then bought by Capita (not a small firm).  Anyway, this looks like we may be past the worse, but it only needs a couple of high-profile court cases to be stopped due to lack of interpreters and it could be back on the front pages.

More later in the week....

Voices (3)

  1. Cicero:

    You seem almost sorry for the MoJ over the interpreting & translating fiasco. Words like ‘unfortunately’ and ‘blood sports’ come close to evoking sympathy for the dramatis personae in this Greek tragedy. Yet these civil servants were advised by their own consultants to give ALS no more than £1 million of business. So why did they give them £42 million worth (see PAC transcript quoted above)?
    In practical terms we professional interpreters both were and are already outsourced as individuals. We are all self-assessed tax payers. Did we or the MoJ need a middleman to take a huge cut leaving us as no better than breadline agency temps and leaving the MoJ with an even bigger bill than before? And will the SME statistics be double-counted? As individuals we individuals are apparently looked upon as so many SME’s (see the recent Police Procurement Consultation (2)) but then so is ALS as a company (now conveniently rebranded as ‘Capita Translation & Interpreting’).
    Large-scale procurement savings are a nonsense as BBC’s File on4 showed last week. And when you say ‘unfortunately ALS struggled to meet the client requirements, and were then bought by Capita (not a small firm)’ you are peddling the same spin that Francis Maude was quoted as using in the Telegraph on 9.4.12 (www.telegraph.co.uk/finance/newsbysector/supportservices/9193978/Minister-defends-small-firm-contracts.html). He said “They [ALS] clearly miscalculated,…Look at what the consequences are: the service is still being provided; the failing company has been taken over by a competent operator [Capita] that will put whatever is needed into it to make it work.” If you check your facts you will see that Capita had already absorbed ALS by 23rd December 2011. So Capita did not step in when the contract faltered. They were already at the helm when roll-out of the ALS contract started on 30th January 2012. Oh, and only one of the reasons it has faltered is that professional, qualified interpreters will not work for a pittance. Surprise, surprise.

    We interpreters can understand your interest in procurement on a business level and as a business concept (of business, for business, by business). In our case however, on a human level, the word ‘procurement’ stands for the results of monopolistic activity in the court system, namely broken trials, wasted costs hearings, professional careers destroyed, defendants kept in custody unnecessarily, and the implication that interpreting is not an aspect of one’s core business. Is Justice not part of the MoJ’s core business?

  2. Rob:

    The award of the contract to Tata by the Home Office is indeed bold. However, the one which was far bolder (in my view) was when, prior to this, the Personal Accounts Delivery Authority (subsidiary of the Department for Work and Pensions) awarded a massive contract (circa £1bn?) to Tata for Pension Scheme Administration. Notably, for the DWP, most jobs went offshore.

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