Holmes and the Mystery of the Procurement Tender – part 2

Several hours had passed since Holmes left Baker Street. As I had heard nothing from him, I set off south, and after a bracing stroll of some 45 minutes, arrived at the Westminster Arms, an ale-house near Whitehall frequented by both the leaders of our noble country and some of the less salubrious denizens of society. I intended to enquire as to Holmes and whether he had been spotted in the vicinity, but before I could draw my first sip of ale, I was approached by a filthy, limping beggar.

"Spare a penny for an old soldier" the wretched creature cried.

"Be off with you"! I retorted. But then to my amazement, the beggar's voice lowered and I recognized my old friend, Holmes, through his disguise.

"It is me Watson! I cannot tell you what I have had to endure today to pursue my mission. But finally - I have it! The tender for Office Supplies. It took all my cunning and skill, but look - it is here"!

And with that he pulled a torn and stained document from beneath his waistcoat and presented it to me with obvious pride.

"But Holmes, I have a copy already. I just printed it off the TED website".

Holmes deflated visibly. "Curse the technology! Never mind, let us take a look".

We must have made a strange couple, I dressed in my tweed suit and Holmes in his beggar's rags as we hunched over the table, studying the document (available here).

"There is still a mystery here, Watson. Look. The contact given is Buying Solutions, at their address in Liverpool. Yet the email address given for that contact is Her Majesty’s Revenue and Customs;  OperationsSupportTeam@hmrc.gsi.gov.uk”.

“That does seem strange. Do you have an explanation Holmes”?

“Not yet, my friend. But I will, Watson, I will…..”

"And one more thing - does the term 'purdah' mean anything to you? No, I thought not. It is the state before an election during which time members of the civil service have to be very careful what they announce in case it is perceived as having political implications. Such announcements  could be seen as interfering with the election process, they say. So, given we are but weeks away from the municipal elections, it may be this is one explanation for the lack of information emanating from Cabinet Office".

"Clever, Holmes - very clever!" His incredible deductive powers had dazzled me again...

(possibly to be continued, unless we get fed up with Holmes for now...)

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Voices (7)

  1. Final Furlong:

    Again Barry, an excellent point.


    Presumably(!), in the specification – as you would find in many best-in-class organisations firms who embrace effective demand management – the supplier will be expected to provide their pricing against a very tight, mandated, standardised catalogue of circa 300/440 items (max) – and any access to the full catalogue (circa 22,000 items) will be severely restricted to a handful of super-users per Department.

    Additionally, this will extend to consumption management, where, as you say, there will be effective controls at the (stationery) point of need.

    Multi-functional devices (managed by secure pin-code) will dominate floor plates, removing the need for any local desktop printers. There will be no expensive colour output devices because there will be no demand to present to each other, internally, in colour. Any multi-functional devices will be paid for on-demand via a total cost per copy commercial model, avoiding any requirement for lengthy purchase leases on the capital equipment. It should include paper so if the device ‘chews up’ a ream of paper every hour, users don’t pay for it. Users pay for what you use – suppliers take on the (commercial) risk of demand…

    1. Dan:

      MFD’s are an interesting one. Given UK Government’s penchant for IT outsourcing, I’m not sure there would be big take up here, as buying from a supplier other than the outsourcer can cause integration issues in terms of security, testing costs etc (it really depends on how cooperative your outsourcer is at any point in time if its going to be effective).

      Hope this framework allows for the customer to point the IBM’s, Fujitsu’s and HP’s of this world to use this as the ‘preferred leverage point’ for government?

  2. Barry Henniker:

    Firstly I applaud the observations and comments from Final Furlong but would like to run the flag up on a couple of other things. My reading of the contract notice was that the destination for this procurement journey is a framework – the use of which will be mandated on designated departments and optional for other listed bodies. And yes the scale and supply side risks will inevitably precipitate a plethora of new and untested consortia and alliances beating the door down – which in turn embed greater commercial and contract management risks. But then in order to use the framework (which one can only assume will contain catalogue based tender bid prices) presumably mandated departments will avail themselves of a further competition in order to get best prices predicated from an e-auction event. So in what sense is government acting as a single customer and reducing the burden and administrative costs of suppliers?

    Secondly, as Final Furlong has pointed out there is no indication in the contract notice about the key role and cost of the logistics operations needed to support this, nor on the processes and costs in ordering and managing localised inventory. How many “stationery cupboards” (rooms) have you seen stacked with printer cartridges, copier paper, post it notes, boxes of highlighters etc. These two factors taken together is where the real cost of office consumables lie, not in the price paid for the product.

  3. Dan:

    I think I’ve solved Holmes’ mystery.

    It was the Committee wot done it.

  4. Final Furlong:

    On the subject of ‘named authorities’, a whopping 10 bonus points to the big brain who can come up with with an answer to this question. (Perhaps someone in ERG could answer it…)

    Taking aside the LDA, there are three members of the GLA family, Transport for London, the Met Police and London Fire Brigade. The latter two have entered the race…but why hasn’t TfL? What caused this horse to bolt before the race even started?

  5. Final Furlong:

    ERG’s first major procurement launch – launched out of Buying Solutions (Liverpool branch). A contract value of between £250-£400 million – £40 million of which will be a ‘minimum commitment’ – guaranteed!.

    The lucky winner (or winners) of this race could be providing up to £228 million of general office products and £172 million of electronic consumables.

    Still, at least it’s electronic – so no more ‘scenes from Mad Max’ where 30+ motorbikes would race each other to Norwich to meet a noon deadline on a Monday (as they did when the OGC launched the tender for External Resources…).

    And what a fascinating OJEU it is.

    As you’ve mentioned Peter, it’s been launched through the Open procedure, so no PQQ. The client-side team is going to be busy (even though it’s automated). No doubt, they’ll need some help, so it’s fortuitous that Buying Solutions is currently recruiting a few extra heads (several ‘Heads of Sourcing and Category Management’ in fact, at £85,000 a pop, to be based in Liverpool – while other central government commercial teams are shedding their commercial and procurement headcount). Though it begs the question you asked: isn’t Office Solutions one of the categories being procured out of HMRC? (Who said designing an Operating Model was easy.)

    The category team leading this one must have had a ‘wobble’ when shaping their strategy. There are two lots in this four-year ‘framework’ contract. While one lot (for general office products including paper) will be for three years with an option to extend for a further year, the second lot (for electronic consumables) will be two years with an option to extend for one year, and a further option to extend for another year after that (just in case? Just in case they’re the same supplier and they’re performing well in both lots? Just in case, the same supplier takes receipt of a single order requiring the delivery of electronic consumables on the same van to the same floor of the same building as the stationery, and it would be inefficient to unbundle them at the end of year three?). Belts and braces, I guess.

    As you mentioned Peter, there will clearly be a ‘cut-off’ on turnover. It’s a massive contract aimed at the equally massive existing market players. There may be a consortium, but there will have to be a ‘prime’. So no SMEs on this one. It will also incorporate a supply chain dominated by large Far East manufacturers no doubt. Logistics will be UK-based (obviously!) so at least a few extra jobs here (mostly in Liverpool…).

    However, there will be an online auction, so, ultimately, the focus will be on price – suppliers will cut their throats let alone their prices to secure this one.

    Finally (for now), to my favourite section. Due to the new regs, one has to name each authority in the OJEU that may want to participate in the procurement. There are 47 additional buying authorities stated in the OJEU, the vast majority, if not all, are down South. (Someone client-side, from ‘down South’, obviously hates travelling…at least ten authorities are based in Essex, so what does that tell you…). However it states…“The aim is that this arrangement, once awarded, will be used by all central government departments, their executive agencies and non-departmental public bodies”. This means that in respect of all of the additional authorities mentioned, it will be ‘optional’ whether they choose to go with the contract or not? “We’d like to see what the pricing is like before we commit…” Of course they wouldn’t be able to see the final pricing unless they were in the procurement. (At least it will provide some reasonable benchmarks.)

    This sets the standard for the remaining eight categories.

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