Government Procurement Service Performance Review – focusing on efficiency

We flagged in the summer that the Government Procurement Service (GPS) had published their annual accounts, along with a very well written and clear “Performance Overview” for the first time. We’ve been meaning to come back to it, having had a closer look -  so this is finally it.

There’s been quite a transformation in the eighteen months since David Shields took over as Chief Executive. And the next few months will be interesting as Bill Crothers, the relatively new Chief Procurement Officer, and to whom GPS and Shields report, puts his ideas in place for government procurement.

But the review shows, quite directly at times, that the changes over the last year or so have been pretty dramatic. Credit should go to Shields for managing a downsizing in terms of staff numbers (from 392 in 2010/11 to 313 in 2011/12), an office relocation that has saved the taxpayer significant money, whilst (from the raw figures, at least) delivering increased output. Managed spend through GPS arrangements went up from £7.6 billion to £8.4 billion while operating costs came down from £30.4 to £22.5 million. That reduction in costs is proportionately greater than the headcount drop, mainly  because of additional savings on the use of relatively expensive consultants.

The number of procurements activities (basically contracts let, I believe) increased from 42 in 2010/11 to 60 in 2011/12 – and is forecast to zoom up to 110 in 2012/13.  This all represents a major improvement in efficiency, one which any leading edge private sector firm would be happy to boast about.

Whilst uptake of GPS contracts has grown,  it would have been interesting to see how much each Department spends via GPS contracts, ideally as a percentage of their in-scope spend (i.e. the money  they could have feasibly spent with GPS). That might be a little sensitive, but that’s an even better reason for publishing it!

I do have a couple of concerns. There are no measures of a “planned versus actual” progress in terms of  the cross-Whitehall collaborative programme – which would have shown it is well behind schedule in some areas.

And I am hearing some criticism of GPS from the market, in a couple of areas. Now you can take this as typical supplier whingeing, but it’s coming from multiple fronts. Firstly, there are stories of a lack of up-front engagement before launching procurement exercises . If true, that would be somewhat ironic as it is one of Francis Maude’s strong imperatives. And there is also a “take it or leave it” approach to contract Terms and Conditions. If you don’t like them, the suggestion is you’re out of the competition. (This is something we’re seeing more widely across the entire public sector, it should be said, not just with GPS).

Now that can be looked on as government rightly taking a strong line with suppliers – but if it gets to the point where some just won’t bid, it may be counter-productive, particularly  if the Ts and Cs aren’t actually appropriate for what is being bought.   It’s right that Cabinet Office generally is taking a stronger line with the market, but that mustn’t tip over into an arrogance that says “we always know best”.

There’s a danger that issues such as these may be driven by GPS resource being stretched, as evidenced by the productivity gains we discussed earlier. Or maybe it is “lean procurement” working in ways that aren’t necessarily good. There’s always a trade-off to some extent between cost and taking time to make sure everything is done properly. So they are perhaps warning signs that GPS needs to keep the market on board (as well as their procurement stakeholders) with what they’re doing.

But looking at the report in general, that doesn’t take away from a lot of positives to praise and celebrate. And here are the links to the Performance Review – and the Annual Report.

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