We examine the tender for procurement of prison food

We’re featuring a set of posts this week around the UK Government’s progress on procurement related matters.  But if you want to see the gap between aspiration and the reality of implementation, consider the recently issued tender for Prison Food.

We’ve seen the core document, and there are very good aspects – someone knows how to write in an engaging fashion, and the description of the role of food in prisons is very helpful and readable for instance. But in two areas, it seems to run counter to declared best practice from Cabinet Office.

Firstly, the requirement is being tendered on a national basis. While there are references to the Prime Contractors involving local and smaller firms, the fact remains that there are three national ‘lots’ each of which will require a very large, national supplier. (The three ‘lots’ are all food for prisoners, food for staff / visitors, and ‘baked goods’ – bread etc.)

Now there are many other ways in which the tender could have been structured to promote the opportunity for SMEs. A range of suppliers and perhaps the use of frameworks? A regional basis for supply would have been very feasible. So would a national approach but splitting the requirement into smaller sub-lots (fruit and veg, frozen, chilled etc.)

But I’ve no doubt there is a category strategy document sitting behind this – the Prison Service are in my experience one of the better procurement functions in government. And I suspect that strategy has come to the conclusion that aggregating supply will lead to greater economies. I’m far from certain that is true (see our previous thoughts on that), and, as I wrote for OGC some time ago, “aggregating demand does not necessarily mean aggregating supply”.

The document also says:

“Due to Government Guidelines the total value of products bid should not exceed 20% of the bidders’ turnover”.

So this rules out firms without a probably £100m plus turnover – and by the way, that statement about the 20% is incorrect as far as we know.  OGC guidelines do not say this at all – here’s their Financial Appraisal Guidance:

The key objective of financial appraisal in the procurement process is to analyse a supplier’s financial position and determine the level of risk that it would represent to the Authority – having regard to the contract requirement and value, criticality, and the nature of the market. The assessment of risk should be based on sound business judgement rather than just the mechanistic application of financial formulae

Applying an arbitrary and illogical 20% of turnover 'rule' is the easy way out - it avoids having to think about risk or look properly at suppliers' situations.

So my personal opinion is that this is a missed opportunity to promote SMEs and potentially get better value.   (Also it would have been a contribution of course to the 25% target we featured here).  But that is debatable.   The second concern about this tender strikes me as less arguable, and seems simply wrong; the contract is being let under the EU ‘Competitive Dialogue’ (CD) procedure.

Competitive Dialogue is supposed to be used where the requirement is unclear – here’s the OGC (you remember OGC...) guidance.

“The Competitive Dialogue procedure can only be used for “particularly complex contracts” where at the outset the contracting authority:

  • Are not able to define the technical means...capable of satisfying their needs or objectives; and /or
  • Are not objectively able to specify the legal and / or financial make-up of the project.

In addition, the Contracting Authority must consider that the use of the Open or Restricted procedure will not allow the award of the contract.”

For goodness sake, this is a contract for supplying bread to prisons! I cannot see for the life of me how CD applies based on those criteria here – do we really think the ‘Restricted’ procedure would not allow the award of the contract?

Why does this matter? Because, as well as the legalistic issue of whether it is within the ‘rules’, in most cases, CD adds to the costs and often the time needed to let the contract. It is more onerous for the Authority and also for the suppliers.  And do you remember the ‘lean procurement’ report (“Accelerating Government Procurement”) that came out just a couple of months ago to a fair bit of fanfare from Cabinet Office? That identified widespread misuse of the CD procedure (30% of the cases they looked at) and proposed a decision tool to inform those decisions. I don’t know if anything has happened yet on that, but this seems a classic case of inappropriate use.

I’ve sent this post directly to MoJ and Cabinet Office for comment, and we’ll let you know what response we get. Comments, as always, very welcome. Are we being unfair? Are we missing something?

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Voices (10)

  1. bitter and twisted:

    No its nonsense. If a supplier can provide the range of foods a prison needs then they must be able to supply a range of qualities as well.

  2. Guy:

    Putting aside the SME angle, the other outcome of the lotting strategy is a significant reduction in the competitive market place. I don’t know the food provision market, but I bet this approach takes you down to just 2 or 3 capable suppliers.

    Different lots for Prisoners and Staff. Makes sense to me, is it not possible that the quality and range of choice will be different between the two groups? Also, according to all the prison related films and episodes of Porridge I watched, don’t the prisoners work in the kitchens, cooking the food for their colleagues. Cant imagine the Head warden would want to eat food prepared by ‘Knuckles’ 🙂

  3. eSourcing Sensei:

    One of the interesting points here is the lack of flexibility the MoJ are goingto get by not breaking this tender up more than the three category groups (and I have to agree with bitter and twisted when he/she questions why staff and prisoners food is classed as two categories – maybe it’s because they sit seperately).
    Anyway one of the greatest advantages the MoJ have with the eSorucing tool they are using (Emptoris) is the very advanced Optimisation functionality that tool has. Again for anyone with a good working knowledge of that element of the tool will know that you gather in as much information as you can breaking it down into reasonably small pieces and then alow the Optimisation functionalty to drive a miriad of analysed outcomes.
    Yes that means time taken in the event build and time creating the Optimisation Scenarios but, the potential to create fantastic results in savings far outweighs the work taken “up front”.
    And here is another piece of “food for thought”. I have been involved in eSourcing for over 13 years, from the days when such technology was in its infancy and nothing much more than a glorified spreadsheet. I have seen events transition into huge regional or continental or global tenders done that way so often because the tools are now technically capable of allowing the buyer to run events that sioze, and it “saves time” to get it all out there at once. However I believe this has begun to reduce the competitiveness of many of these events as suppliers are either limited becuase of their capability to service such a large tender, it reduces there focus because they have so much to respond to or sort through, and it increase dramatically the time they need to effectively respond to such an event.
    I am not saying you never do “large” events, but I am working with teams at placing more effort and time into the “lotting” strategy or actual event size in some cases so that you can allow for a greater range of suppliers to participate – yes those “local” guys who just may be able to rpovide the same as the muti national but are more likely to value your business and provide you greater service – allow suppliers to focus on particular areas where they can service your requirements and reduce the amount of time they have to spend. It may come as a surprise (shock horror) but yours (the MoJ’s) is not the only tender the supplier is participating in, but make yours more streamlined or attractive than another tender and the supplier is more likely to take the time to respond to your event.
    MoJ team (some of whom I know) my message is – crap in then crap out – (not good when you are talking a food contract) – if the event build is not right the event result will not be either.

  4. bitter and twisted:

    Prisoners food and Staff food is a different “lot” !? That makes no sense.

    1. Final Furlong:

      You’ve been watching Brubaker!

  5. flog:

    Perhaps the use of CD is to allieviate specification problems which appear to now be the focus of a current legal case – see http://www.bailii.org/ew/cases/EWHC/TCC/2011/1160.html

    It’s a pity to e-auction element has been judged out of time

    1. Peter Smith:

      I wasn’t aware of this I confess! I’m sure you’re right. Yes, the e-auction bit would have been interetsing if it had come to court. So presumably this case is proceeding?
      thanks so much – may feature this fully next week.

  6. Final Furlong:

    Rejecting the restricted or open procedure in favour of competitive dialogue for prison food procurement must surely have left a bad taste in someone’s cake hole.

    Perhaps they’re not sure what to feed them, and they’re looking to the market for ideas? Should muffins have icing upon them? A cherry on top for those who are behaving themselves? Perhaps they’re implementing ‘client dining’ options for the seriously hard core elite – a key deliverable in one of NOMS’ commissioning ‘pathways’. Someone is a couple of sandwiches short of a picnic on this one.

    Surely they know the key ingredients by now? They’ve been feeding staff and prisoners for decades, and you’d have thought they would be in a position to specify exactly what, how, when, and how much.

    I wonder if prisoners will sit upon their procurement board and evaluation panel? Sweeney Todd would have been an obvious choice. Mind you, if he (or someone with a similar profile) did sit on such a panel, some of their food choices would cost someone an arm and a leg….

  7. richard:

    Another CD to examine is Business Coaching for Growth Team 112706 being run by BIS. Service is to find 10,000 high growth SMEs out of the 2,000,000 in England.

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