£2 Billion Consultancy Framework for UK Government Launched – Where Does Procurement Advice Sit?

One of the biggest UK public sector framework contracting processes has recently been launched by the Crown Commercial Service. The new Management Consultancy framework covers various types of consulting services, and is being advertised in the European Journal (OJEU) as having a potential value of £2 billion - £3 billion over four years.

The new contract will replace the ConsultancyOne framework, which was let after a fairly tortuous process in early 2013. (I did a small amount of consulting, giving advice on their bid to one of the big firms, so I saw the tortuousness from the supply side). There were quite a few delays, but the final lists of firms across 15 “lots” (including five that were finance- and audit-related) weren’t bad, with a reasonable blend of the large firms and smaller more specialist players.

However, and somewhat ironically, the “procurement” lot was one of the weakest (in our opinion anyway), with some firms we’d never heard of, few of the credible blue-chip names, and equally none of the deeply experienced procurement firms (ADR, PMMS, Future Purchasing, Efficio, State of Flux, Proxima, 4C Associates etc). Instead, it seemed to be a list of mainly project management experts, who could probably run a procurement project, but would not for instance be suitable to advise on category management, SRM, or procurement change.

This time around, however, CCS has gone for a different approach. Instead of being based largely around functions – policy development, procurement, HR, economic analysis etc. – the lots are more mixed, some functional, some general and more sector-focused, as you can see here (along with the split into two phases for the procurement process):

Lot 1 — Business Consultancy (Phase 1)
Lot 2 — Finance (Phase 1)
Lot 3 — Audit (Phase 1)
Lot 4 — HR (Phase 2)
Lot 5 — Health and Community (Phase 2)
Lot 6 — Education (Phase 2)
Lot 7 — Infrastructure (Phase 2)
Lot 8 — ICT and Digital Services (Phase 2)

But where does procurement consulting fit?  We asked CCS about this approach and they confirmed that they expected procurement consulting work to “fall across a number of Lots” and that in effect “all of the Lots include procurement advice”.

So running major procurement programmes for a hospital or advising a University on new purchase-to-pay systems would fall under the appropriate sectoral lot. We guess that “business consultancy” could cover a multitude of sins too, including procurement.

On balance, we applaud this approach; it should ensure that the selected suppliers have a good chance of meeting the end-customer needs. CCS has an objective to increase its reach into the wider public sector too, so this should help with that goal. But it does mean that again, we might end up with no “deep” procurement consulting firms on the list.

So it may be the the best strategy for a procurement firm that wants to be considered is to team up in some sort of consortium or sub-contract arrangement with a sector expert – not one of the giant firms probably who have their own capability, but maybe someone who isn’t strong in procurement. That applies not just to procurement firms of course but to other functional specialists. We suspect there will be a lot of conversations going on in the consulting marketplace before the closing date of Valentine’s Day (how romantic)!

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Voices (6)

  1. Insider:

    The take-up on the previous procurement lot was low because of the woeful supplier selection. The procurement demand was funnelled through more general lots. This resulted in procurement specialists being used through the general consultancies that trousered a 10% uplift for their “effort”. This time around the specialists have been squeezed out completely and have to find a willing/needy partner. Does not look very clever.

  2. Chris Stokes:

    Procurement sits within Lot 1 which is designed for general business consultancy. Within this there are a number of core specialisms that consultancies have to offer, mainly around running complex projects and programmes, and then eleven of “service requirements” where consultancies can indicate whether they supply them. One of these is specifically “Procurement Advice”.

    I don’t think it gives it enough prominence, but understand the rationale. Finance, audit, IT and infrastructure (eg rail, electricity etc) are all big areas for consultancy and so makes sense that they have specific lots. Health and Education are specific niches – the consultancy there is not generalist but rather things like how to set up academies. HR is a bit of a strange one for a specific lot and could probably have been bolted on to lot 1 as well.

    The main issue here is that it means specialist procurement consultancies who do not have experience in change and transformation, organisational strategy, policy advice etc will not be able to bid Lot 1 so will have no way to supply going forward, and it is stacked more in favour of the big 4 type professional services firms.

    1. Peter Smith:

      Chris, That’s a very useful analysis, thanks. Supports my thinking which is procurement specialists probably need to team up with other firms. I know there is a demand for procurement support, including from Cabinet Office itself, so it would be good to see some real experts getting on the list!

  3. Dan:

    Perhaps there just hasn’t been much demand for procurement consultancy outside that project management element, so they decided not to bother with it this time? It would certainly explain a lot.

    1. Secret Squirrel:

      There’s no maybe about it. You’re 100% right. The take-up was slim at best. It’s documented here https://www.whatdotheyknow.com/request/spend_via_consultancyone#incoming-591612

      1. Peter Smith:

        That’s fascinating data – thanks. Interesting how much lower the total spend is too compared with the projection in the OJEU ad for the new framework.

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