Saturday, 14 May 2011

The government procurement conundrum: a possible solution

Governments are duty bound to spend their taxpayers' money wisely. This means that procurement processes must be sufficiently fair, open, clever and conducted with due probity to ensure that only most competitive and competent suppliers win tenders. This is right and entirely understandable.

However, this appears to have led to an exponential growth in the procedures used to achieve these goals. Pre qualification questionnaires, framework contracts and tenders themselves are becoming so extensive that only large organisations (with the capacity to employ specialist bid staff) or small / medium sized organisations (which hire in specialist bid writers or who can 'spare the time' to fill in the huge forms) are bidding.

This is skewing the market and is, I would argue, putting in place inflationary pressures. The result is often, despite the best & most worthy intentions of government procurement staff, the purchasers are often either paying over the odds or contracting with sub optimal providers, or both. (There is also a growing body of evidence that the thresholds and requirements being placed upon bidders, such as having disproportionate levels of indemnity insurance, is compounding matters, and skewing the market even further.)

I have blogged about this in several places before such as here and here. And now it seems we have a government that has woken up to this conundrum and wants to do something about it. (See report of a meeting with the PM and Francis Maude here). Hurrah!

But... what is to be done?

There is much talk of doing away with PQQs and Frameworks - and opening all tenders to all bidders. Aside from the likelihood that this will take some time to achieve (and can the economy wait while this happens?) - is this goal even possible?

The danger is that government bodies seeking to procure a new service will put out an open tender and then be inundated with bids. This will slow decision making down and stretch procurement resources to breaking point. Also the providers will spend possibly even more time writing these bids.

A possible solution:

When the government body has clarified its requirement in terms of what service or change it is seeking assistance with achieving, it should publish four documents:

  1. A clear statement of the requirement (with some information about the context)
  2. An outline budget for how much they wish to spend (this would seriously help bidders do quick calcs and work out if this job is for them or not)
  3. A statement of what the successful bidder will be expected to have or be (eg 'sufficient' indemnity insurance rather than specifying a particular level, 'good health and safety practice', rather than requesting an 'off the shelf' H&S policy etc) 
  4. An invitation to bidders to submit no more than two sides of A4 as to why they should be invited to submit a fuller bid

This will keep the process of assessing bidders down to a minimum for the government agency. It will make it very clear to all the potential bidders whether they should or should not bid. Whilst it will be tricky to boil their outline bid down to two pages, the best providers will be able to do this, I would contend.

What do you think - would this work? Would such an approach match the needs of all those involved and create a more level playing field where the real winner will be the taxpayer?

Would anyone like to test this method through some sort of controlled trial? (Ben Goldacre has written an excellent piece about the critical importance of such trials in today's Guardian: click here.) As I have said before - the whole field of procurement seems distinguished by its lack of any evidence based practice. (But in the spirit of the scientific method, I would be more than happy to have my theory disproved...)

And if you do use this method already (or something very similar) - I would love to hear the details about well it works. Please share.

And... if this is a new method, and it works well, please just remember you read about it first here... Thanks.

Friday, 13 May 2011

Creative justice?

Just came across this story:

"A US man who helped persuade an English man and a Canadian woman to commit suicide after finding them online has been given a jail term in Minnesota..."

So what is interesting about this...?

The detail that caught my eye was the later point:

"The judge ordered him to spend an initial 320 days in prison and then for the next 10 years return to jail on the anniversaries of his victims' deaths." [my highlight]

For a whole heap of reasons, I think there is something poignantly just about this part of the sentence: that for two days each year, the offender will have the 'inconvenience' of being made to go to gaol and think about the crime he has committed.

This got me thinking about what other crimes this might suit - dangerous driving comes to mind - certainly where someone was injured or even killed. What do you think?

But then I got to thinking about creativity in not just the criminal justice system but in the broader public services: what conditions need to be in place that would allow for such creativity and innovation?

So - what conditions do you think need to be either boosted or established - so that we can continue to have such creative thinking (and more) in the delivery of public services - including community justice?

Wednesday, 11 May 2011

If PQQs were the answer, what was the question?

Recently, I was invited to a meeting at the Treasury as a follow up to the earlier larger meeting hosted by the PM and Francis Maude (see my report of this meeting below at this link). This was a small meeting designed to assist the team who are tackling the whole issue of how to go about making Government procurement more SME friendly (as I describe it). Despite the people present being from quite a wide range of industries, I was struck by the similarity of our experiences of procurement.

In a nutshell, it would appear, that more and more SME people (me included) are simply giving up the will to live (almost!) when confronted by the increasingly convoluted Pre Qualification Questionnaire processes that are being used to sift, select and short list suppliers for the next phase of procurement processes. 

It is not my job to record the outputs and proceedings of the meeting - but I did want to share the questions that I took along with me to the meeting to record some of my thinking on this subject: 
  • What evidence is there that PQQs really work? 
  • What do PQQs set out to achieve - and what do they actually achieve? 
  • How do PQQs skew the market place - and do they skew in the direction of better value for the taxpayer or not? 
  • Who are the best a) Government and b) Private sector procurers? 
  • What can we learn from these organisations (assuming we know how to identify 'best')? 
  • What does good procurement look like? (I had my stab at this before - see here
  • As a method of managing the scale of the task (of identifying the few key suppliers who can do an effective and economic job) - what options apart from PQQs are available? 
  • If PQQs and Framework contracts are going out of fashion - what are the best tools to replace them with? 
  • Do PQQs result in the best suppliers being selected to do a job, or do PQQs tend to select those who are just very good at... writing PQQs? 
And finally if PQQs were the answer - what was the question?

I would be genuinely interested in what other suppliers think but especially what do clients and procurers think about my questions? Do you have any answers? 

Please post below. Thanks