How many times in the public sector when presented with a procurement project is the first thought “is this compliant?” rather than “is this delivering true value for money?”
We seem to have forgotten that the intention of the EU Directives is to ensure there is equal opportunity for all across the EU, and this is driven by applying a set of standards to ensure processes are open and transparent and offer a consistent set of timescales to ensure everyone in the EU has the same opportunity to respond. They are not there to provide the basis for a blossoming legal feeding frenzy on dotting ‘i’s and crossing ‘t’s.
With Brexit the UK has the opportunity to review our public sector procurement regulations and processes with a view to continuing to practice those elements of the processes that we believe are good practice, but recognising we now have the flexibility to apply pragmatism, common sense, and maybe even some commercialism. We can still apply very similar standard processes e.g. UK Restricted and UK Open, but with a total focus on the best outcome for UK plc. For example Procurers should work closely with the subject matter experts, drawing on their knowledge of the market to set realistic, pragmatic tender process time scales that ensure tenders deliver the outcomes required without unnecessary padding or wasted time…because it’s time it was recognised that commercially time equals money.
Three areas where I believe a healthy dose of pragmatism would be very welcome are detailed below. All of these are currently being successfully practised in the Channel Island of Guernsey, which lies outside the EU Public Contract Regulations regime:
- Exception to Tender – Although I agree we should maintain financial limits that trigger specific procurement activity, we should also allow officers to present a brief business case if they believe there are exceptional circumstances that mean going to tender would not deliver the best outcome for the organisation. Procurement Policies should have a paragraph that states something along the lines of:
The [Organisation] has a duty to consider and deliver best value when undertaking any procurement activity. Best value is understood to be a balance between price and quality in recognition that cheapest does not always deliver the desired whole life outcomes. This policy expands that consideration and definition of best value to include as a mandatory requirement the wider ‘quality’ aspects of local social and economic benefit. These wider aspects should include for example sustaining local employment, uplifting local skills and retaining revenue flows within the region through various mechanisms to maximise the local multiplier effect of spend and re-spend within the local economy.
So by taking an holistic approach to procurement, and being mindful that within the region there may be limited resources, it is recognised there are times when it simply doesn’t make sense to tender when the market rate is known, the capability of a potential local supplier is known, and more importantly, the quality and experience they can bring to the project is known. Of course before an Exception to Tender is authorised the officer must first convince his senior manager to sign off the Exception to Tender request, and then it must be authorised at the appropriate level by the Head of Procurement, professionally (so for example Head of IT for an IT related request) and financially.
- Local Only Tender – This flies in the face of the EU requirement of ‘equal opportunities for all EU members’, but commercially and from a Local Authority aspect makes absolute sense. Remove the EU requirement to advertise to all members and this door swings open. The objective of the tender remains the same – to seek the best value for money solution for the requirement, but if this can be achieved and evidenced through utilising local resources only, then why wouldn’t you? Again this should require a Business Justification Case, but where it can be shown the region has sufficient Competition, Capability, and Capacity (the 3 Cs) to deliver a quality value for money outcome, then why would anyone want to spend money outside of their local economy and lose the local multiplier effect?
- Structured Check of Requirement Understanding Meetings (SCRUMs) – Experience has shown that often the usual procurement process is to develop sometimes quite complex specifications, issue them to interested/appropriate bidders who may have responded to an Expression of Interest (EOI) request, then wait for the bidders to ask questions on anything they don’t understand. It’s only when the tenders arrive that it is discovered that the bidders thought they’d understood something but actually hadn’t. It’s the classic “I know you believe you understand what you think I said. But I am not sure you realise that what you heard is not what I meant.” One of the things learned in a previous career was that when you give a briefing, you should always check understanding at the end of it.
Wouldn’t it make sense to do just that? So issue the tender specification, allow a suitable period of time for reading, and then invite the bidders to a SCRUM. These can be run in a similar manner to EU Competitive Dialogue meetings with a minute taker and full digital recording to ensure the integrity of the audit trail. Essentially you ask the bidder to tell you what they think your requirement is. This is something that is being done in Guernsey with very positive feedback from Suppliers; and at the time of writing every SCRUM they had held had revealed at least one aspect of the specification that had been misunderstood or misinterpreted by a bidder, and it was usually a different aspect, so it wasn’t bad specification writing! It simply shows that no matter how obvious it may seem to you because you know what you’re trying to say, other people invariably find a different interpretation.
It’s quite alarming just how, in the public sector domain, good procurement people become conditioned to focussing on compliance at least as much as, and often more than, achieving the best value for money outcome for the procurement project to hand. It doesn’t take much however for full service to be restored with procurement fully focussed on driving value for money outcomes that bring benefit to the whole of a region. Some common sense and pragmatism – is it too much to ask?