Readers’ comments – on Capita and the procurement centralisation debate

We haven’t had our usual round-up of readers’ comments for a couple of weeks now, but let’s get back into that today.   And somewhat to my surprise, our post on Capita drew a lively debate.  We asked whether their claim that they win two-thirds of all contracts they bid for was a sign of a failing market?  We weren’t having a go at Capita really, but they got defended by some of our readers.

Let’s start with Final Furlong.

I have a view. And I have seen many of their bids (and their competitors) over the last decade. They have an excellent bid management team. They put ticks in boxes within boxes that didn’t exist in the ITT, and know how to score the maximum points in any evaluation criteria, the principle means by which all public sector contracts are won. Secondly, Capita (I recall) are very selective when bidding for contracts. I know that one of the key drivers is ‘bid costs’, but I am also aware that they have a very robust process (a committee perhaps?) for deciding which contracts they have a significant chance of winning (taking aside attractiveness of the client and contract ie: £s).

Richard Scott agreed.

Surely the right questions are:
- do the notoriously rigid public procurement rules create barriers to entry for public sector markets?
- do Public Sector clients have the right sourcing capability to manage complex sourcing projects and markets?
- do Capita compete in a fair, compliant and commercial manner?
- once Capita (or any other provider) win the contract, do they deliver?

Blaming a provider (a successful British provider no less) for running a successful sales team and robust qualification process (I am with Final Furlong here) seems a curious approach

I wasn’t blaming Capita Richard! Honest…

“John Landseer” said this :

Capita do some things really well and some things exceptionally well, viz:
-  they understand the OJEU process really well and exploit it to their full advantage (you have to question whether other companies do this…)
-  they really do answer the full question (ATFQ) when bidding – you would be amazed at the number of clowns.. er, I mean companies who don’t.
-  they qualify hard (if you are going to spend 4-5M GBP on a bid – you better win)!
-  they forensically play to VfM and MEAT criteria
- they don’t gold-plate – suspect they don’t offer compliant +
-  they offer economies of scale
Finally – they really do understand the work for which they are bidding. I’m struggling to work out - what’s not to like or admire in their approach?

Fair enough. But wouldn’t it still be good if we had some other companies who could do this, so Capita had a bit more competition?

Bitter and Twisted said;

If you input the tenders against a variety of differently weighted criteria, would Capita still often win / be well placed, or, do they have the special knack of hitting the sweet spot?

Secret Squirrel on the other hand took a more ‘robust’ line;

You’ve got to admire the bid team. But they’re not known as Crapita because of their excellent delivery…

(That’s a Private Eye term, for those who aren’t regular readers of that fine journal).

We also got some interesting responses to our piece launching a new Spend Matters briefing paper concerning the thorny issue of how to organize procurement - centralise or de-centralise?  (The paper can be downloaded here).

Alun from Market Dojo gave us a long and interesting comment – this is just the conclusion, which poses a good hypothesis..

In all honestly we would wholeheartedly agree that this seems to go in cycles. The change between centralisation and decentralisation seems to be as much about change bringing efficiencies as anything else.

Alan Holland brought technology into it.

Centralisation versus devolved control is likely to be an unending disquilibirum until procurement officers begin to adopt technologies that can address market failures at opposite ends of this spectrum.

And we’ll finish with Mr Squirrel again.

I’m not sure it gets resolved ever. It must be a consequence of broader organisational strategy and design and how you intend to serve the customer, which drives the right design for procurement.

Thanks as always to everyone who comments – much appreciated by us and our general readership I know!

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Voices (2)

  1. johnlandseer:

    Peter – you write:

    Fair enough. But wouldn’t it still be good if we had some other companies who could do this, so Capita had a bit more competition? –

    I think this is a bit chicken and the egg – the govt market craves competition – when someone like a Capita comes in, learns and plays by the rules and starts to win deals …..remind me, the problem is? Could be said that G4S and Serco too played this game until recently.

    My point is…..think it’s a case that we Brits love to makes things difficult for ourselves and, when someone does do well (by dint of hard work, investment, blood, sweat and tears) it’s all to easy to say strop – change the rules (again) and start afresh – not sure real life quite works this way.

  2. Graham Smith:

    Perhaps the cyclical nature of procurement centralisation vs de-centralisation and how this manifests itself in organisational design is due to neither being the definitive approach. My experience suggests a hybrid model often works better than either. On the other hand it could be argued that the change from one to the other is often precipitated by the reccruitment of a new CPO and his/her need to be seen to ‘make a difference’.

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