The Met’s procurement process under the spotlight

The engagement of Neil Wallis, the ex News of the World journalist, by London's Metropolitan Police in October 2009 was one of the catalysts of the whole newspaper hacking crisis. And Dick Fedorcio, their director of public affairs, has now been referred to the Independent Police Complaints Commission over his relationship with Wallis. So the workings of the Met’s procurement process is now a major issue in this whole affair, and we learnt quite a lot about it during the Home Affairs Select Committee on Tuesday. Did what we heard ring true, and was that process sound?

Fedorcio was the budget holder here. He decided he needed some help – call in a consultant, was the cry. Not an uncommon cry in major organisations, although much less common in the public sector since the 2010 election.  He already knew Mr Wallis – and it was interesting he called him a “business colleague” when he first mentioned him, which indicated a reasonably close relationship.  He thought Wallis could do the job, and wanted to engage him directly (without competition). But the procurement team at the Met said, no you can’t do this.

What we don’t know is how procurement found out what Fedorcio was planning – perhaps there is a formal purchase order system that needed authorisation? Anyway, full marks to procurement for pointing out that “you must get 3 quotes for all contracts over £10K”, or words to that effect.  I know many organisations in public and private sector where procurement would not be involved at all in such consulting assignments and Fedorcio would simply have gone ahead with a direct contract.

But then Fedorcio was allowed to choose himself two potential suppliers to bid against Wallis. We only know the Wallis was “the cheapest”.  Well, it is very easy for a budget holder to ensure that their supplier of choice wins in these cases. You just approach the known most expensive providers in the market to provide the competition; or you can suggest to them that the specification is a little more complex than you’ve told your preferred supplier. Then – surprise surprise – your favoured supplier wins the “competition”.

This happens all the time – I’ve been a beneficiary of it as well as a victim in my time as a consultant, and it is rife in many organisations and across many areas of expenditure.  It pays lip service to the policy, and to true competition or fairness, but it does just about keep everybody within the rules.

Of course, this may not have been the case here. But this risk of perceived unfairness in the process, ineffective use of the organsation’s money, or even fraud,  is why, ideally, a procurement team would keep some involvement to ensure that the three quotes process was carried out fairly. But few procurement teams in the public or private sector are well enough resourced to be involved at that level of spend (£25K), so budget holders can easily “game” the system.

It’s also likely that the Met had a policy that would have required a full, open tender for spend at a higher level, up to a full EU type competition. But based on what we’ve heard, the indication is that procurement at the Met worked in a fairly typical manner - and was probably stronger than at many organisations, but not absolutely leading edge.

(And I should say that since these events, the Met has appointed a new Procurement Director – someone I know well and who is first–class).

However, Fedorcio told the committee he asked John Yates (an assistant Commisisoner) to do the “due diligence” on Wallis, which was a little odd. That would be for the procurement or finance teamto do for a major contract, and even for a £25K contract you might have expected some basic checks on a new supplier’s status, finances and so on.  But I’ve never heard of a budget holder delegating responsibility for that task upwards to a more senior line manager!

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