A Public Procurement Parable – The Two Butchers (Part 2)

Part 2

(Part 1 is here)

The Wilson’s started putting their “supermarket defence” plans into action. One idea on the list was looking to grow their work supplying local schools, council offices and other public sector customers. So, a few weeks later, Martin Wilson called the chief buyer at Farnberley council.

“I just wondered when your meat supply contract was coming up for tender”?

There was a pause and an embarrassed cough.

“Um, we’re not actually putting it out to tender this year. Jones, our local firm of butchers, did a pretty good job last time on the meat supply, so we’ve just given them the work again. For the next three years actually”.

“But I hoped we would at least have the chance to have a go”, said Martin. “We’ve got some great ideas about how we can give you better service and value this time”.

“Sorry. It wasn’t my decision. I’m just the buyer. This came from above”.

Furious, Martin called his own local councillor in Camborough and told him what had happened.

“Right”, said the councillor. “We’ll make sure you get the Camborough council contract anyway, Martin. If that’s the way Farnberley want it… two can play at that game”

Martin was calmer now, and he interrupted.

“Hang on. I know I was complaining – and I still think this is unfair . But when I think about it … no, I don’t want you to do that. I want you to give us a chance, so please run a competition, but we should win it on our own merits. Look, if we can’t win the contract to supply our own town, then we can’t be much good, can we? We’ve got some advantages in terms of transport costs anyway, so really, we should be able to win that”.

Sure enough, that summer Camborough ran a tender and the Wilsons won it comfortably. Meanwhile, over in Farnberley, all was going well too. Jones supplied good quality product to the council, and the 50 or so local people who had committed to the regular scheme were happy.

But it wasn’t long before the Farnberley buyer noticed something. The prices were creeping up – he checked, and yes, chicken breasts were £5 a kilo last month, now it was £5.50. So he decided to leave the office early one day and pop round to see Jones on his way home. When he arrived at the shop at 4pm, he was surprised to see Jones starting to close up the shop.

“Off home already”, he asked?

“Yes, well, it was a pretty quiet day. Sales are still down you know, that supermarket has really hurt us. But thanks to our deal with you we’re staying afloat”.

“You didn’t win the contract to supply Camborough, I see”

“No, we didn’t bother bidding actually. Lots of forms to fill in, all this stuff about health and safety and social value. Couldn’t be bothered really. One of my lads is spending more time with his guitar, writing songs, so we’re a bit short staffed – but he reckons he might be the next Ed Sheeran, whoever he is”.

“So, I’ve noticed some of the prices you charge us have risen. Why’s that”?

“It’s the market really. Feed prices are up, and oil, so pressure is on the meat producers. They pass it on to us, you know, and we have to pass it on to our customer unfortunately ”.

The buyer frowned. “Well, yes, but couldn’t you look for different sources, keep the pressure on your own suppliers”?

Jones looked blank. “No, we don’t really do that. Anyway, as I said, our sales are down, so we have to spread the overheads over less volume, so we have had to put a couple of percent onto your bills to cover that”.

“Well, we can’t just accept anything you throw at us, you know”.

“Don’t worry, that should be it for the next few months anyway. Now, can I give you a few sausages to take home for dinner…”?

(To be continued...)

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