CBI Public Procurement Report – some positives, some concerns

The second Public Sector Procurement Report from UK business  organisation the CBI was published today. It is somewhat disappointing news for the Cabinet Office and public procurement in general, with a few bright spots but overall a message that CBI member firms are not seeing the general improvements in public procurement we might have hoped for. But there are a few caveats before we get into that.

100 firms responded, which given the CBI asked 450 member firms to participate, seems a disappointing response rate. And as always, we suspect that those who are dis-satisfied have a higher propensity to reply to surveys than those who are basically positive. Secondly, we might wonder how sure the firms are of their facts. Most strikingly, 67% said they believe “lowest cost is still driving most contracting decisions, with only 2% saying contracts are decided on whole-life costs”.

I just don’t believe this. I still see tender documents fairly regularly, and indeed many are now available online. And I can’t remember when I last saw an evaluation methodology that was based purely on lowest cost. In 100% of the cases I’ve seen, other non cost factors (whether quality, service, social value, whatever) are always in the evaluation mix, often with a pretty high weighting.

But even with these notes of caution, the results are not good for public procurement. Bright spots include a slightly greater perceived use of pre-procurement activities, which will be music to ‘procurement Minister’  Francis Maude’s ears , as that is one very worthwhile goal he has been pushing. And  the Mystery Shopper service, which we complimented earlier this week, is perceived positively, although too many firms still don’t know of its existence, let alone use it. There is also an improvement in the information about new contract opportunities provided to the market, particularly from the Government Procurement Service.

However, firms are not impressed with efforts to standardise procurement processes, or even to speed up those processes – which surprised me as certainly central government has made some strides here. Most firms are seeing no change in commercial skills and if anything, the perception is that the quality of procurement workforce is declining, not improving . And 35% of firms say they are facing longer pre-qualification questionnaires, despite efforts to address this area. Indeed, overall, more firms feel that the ‘ease of doing business with government’ is deteriorating rather than improving.

Plenty of food for thought here, so we’ll come back with a deeper analysis in the next few days – in the meantime you can read it here. CBI 2014 Procurement Survey.

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Voices (2)

  1. Justin Lambert:

    Thank you Dan for this insight, I work in the private sector, have done all my working life but I have met many public “procurement professionals ” over the years and they all seem to be people who as you say do a job and do try to do it well given the rules that they have to work with. The private sector can be equally single minded in some of its methods of procurement, recently I overheard a senior director of another company stating how insular procurement is and that they only work on their agenda, wonder how true this is in all large organisations..
    In my humble opinion nothing is going to change in the public sector unless the “culture” is addressed, you can change and add as many processes as you like but at the end of the day people drive these processes, a fundamental shift needs to happen, or am I misguided..

  2. Dan:

    The problem is that really there is no such thing as a ‘procurer’ in the public sector.

    You have procurement people, who deal with the writing and evaluation of tenders and know the ins and outs of procurement law, but these are just the tip of the iceberg. There are whole teams of people involved in the procurement process who are just not engaged by the suppliers or government policy.

    For example, the equality and diversity people. Their role is to ensure that procurement helps deliver equality of opportunity for the local area. To that end, they put questions in the PQQ and ITT and ask for reams of paperwork and policies from tenderers. This makes things more difficult for smaller suppliers, but they don’t give two hoots – its not their remit. They’re just doing their job and making sure that the procurement process delivers maximum benefits for them. They aren’t asked to consider what impact they have on the process, and generally don’t.

    Then you have the legal people. They want to protect the organisation from contractual risks, and insist on high indemnity levels and insurance levels in the contract. Again, this makes things more difficult for smaller suppliers, but they don’t give two hoots – its not their remit. They’re just doing their job.

    Then there are the health and safety people. They want risk assessments, policies and CRB checks, all in place before they’ll consider a tenderer.

    Then there are the environmental people….. You get the idea.

    And yet, whenever someone considers public procurement, they never look past the procurement team, as if they are solely responsible for the turgid mess that appears before suppliers.

    When is the last time you saw some guidance for E&D people about how to do procurement? The closest we have is guidance for procurement people about how to do E&D better – usually written by a special interest group solely concerned with E&D. The same goes for the rest of the examples above.

    Rant over….

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