What better procurement processes could mean to the public purse
A New Decade for Procurement
“If you read one thing in papers this weekend, I suggest this by Mike Bracken from Public Digital about Fujitsu, the Post Office, Horizon and how £20bn of savings is a light estimate of how much better procurement could contribute to the public purse. If I was an incoming govt of any colour I would put a laser sharp focus on this - you give yourself options by doing so and doing so well…
On 9th February 2024 there were 38 comments about this Linkedin post. The word ‘procure/procurement’ was mentioned 16 times - ouch.
Ouch maybe, but those prods all seem genuine. Genuine in context, genuine in feeling and genuine for many users of procurement services.
This should come as no surprise to those who read the UK Civil Service Digital Skills Survey 2022, by the Central Digital and Data Office and Adam Stewart/Google Cloud, which identified that nearly half of those involved in DDaT procurement (48%) say that procurement is significantly holding them back from using digital to improve public services. The same report also found that, “when asked what is significantly holding them back from using digital to improve public services, half of respondents highlighted legacy technology that is no longer fit for purpose (50%).”
Andrew Smith commented “These monolithic IT projects never end well, and yet we seem to keep going back to the cookie jar…”.
So, why are we still having the same debate we were having in 2012 ten years on? This is wrong on many levels. Are we still in a place of distrust and dislike towards procurement and the belief that legacy technology is holding back the modernisation of public services? I would hope not. Things have improved. In fact this is more likely about the fact that key issues are not being resolved.
Contract data
Government should publish the list of large problematic contracts, those that are too big to fail, and publish the plan to rectify these. One of the principles of public contracting legislation is ‘openness’- we need to see more of this.
Using readily available government data to identify where these contracts are (and which ones are bigger and uglier than others) should be easier than it is. Especially where there is an expectation that outsourced providers will effect some kind of digital transformation for service users, and the services are critical. It should also be easier to see the contract values, the terms and the extent to which KPIs are being met.
Market engagement throughout
Everything from tech services to health consumables, construction works to office supplies (basically everything we buy), have nuances in the way they are supplied and therefore sourced and contracted. This requires specific knowledge. The shared ground is around market engagement, fit for purpose relationship and contract management, not only covering pre-procurement, but the full end to end commercial lifecycle - including service delivery and supplier exit.
Supplier management and supplier exit (during or at the end of a contract) is just as important as supplier onboarding. Without this suppliers cannot be held to account and there is every chance that the next generation services, and the procurement of them, will be hampered by a botched expiry process. Maybe adding a question into all business cases around “how will you manage these ‘things’ in a live environment to ensure strategic objectives and performance levels are met and how will you efficiently and effectively exit suppliers at the end of the contract?” would help.
SMEs
Framework Agreements are the staple for government contracting but they are designed for commoditised items. Plus the (more often than not) “once in every four years” opportunity to apply for a place on one makes it hard for SMEs (let alone the amount of forms to be filled). In 2012 there was a positive movement to avoid contract lock-in and letting contracts that were too big to fail - this was led by disaggregation and adopting a more user centric approach. Has this continued or has the pendulum swung back?
The Digital Marketplace identified the need to attract innovative ideas from SMEs so iterated Framework Agreements every six to nine months. There were huge benefits in iterating in this frequency; enabling new, micro, SME level and established firms offering new services access to public sector contracts (and vice versa). This frequency also ensures public sector workers develop their digital industry skills and knowledge. This enabled suppliers (and government departments) to be more accountable with their deliverables.
Start small, it works
Spending years developing procurement activities and documentation for a ‘big bang’ approach is not an effective use of public money. Stakeholder engagement is important, but so is understanding user experiences and user journeys. Starting small, shipping products regularly for user testing, and facilitating truly open ‘Show and Ask’ sessions all help hold both supplier and buyer to account. This is especially important where some kind of service transformation is being undertaken and buyers and suppliers are on a mutual voyage of discovery.
The alternative is a half baked vision of transformation that gets written into a big contract in the naïve hope that innovation and service improvement will appear like manna from heaven when in fact nothing happens. Blaming suppliers for a programme's underperformance will always, often wrongly, take place, but ensuring the public sector delivers on its own contract obligations (on time, to the required standard, in the required way) will help lower the chances of underperformance of both the supplier and therefore the public sector programme.
Cultural fit
Cheapest price works for procurement reporting. It works really well in fact for this. However, more often than not, especially if it is a complex project, the cheapest will fail. Evaluating technical ability is a good positive step. But the key one in our Curshaw Commercial opinion is evaluating ‘cultural fit’ and the appetite and ability to work in both multi-vendor and multi-disciplinary environments. Throwing in a dash of agile contracting to ensure everyone is on the same (and right) page is key. This increases the likelihood of success by opening up transparency channels, truly lowering risk and developing the right momentum at the right time to ensure the right success. This approach is one way of helping to address the “suppliers always get paid” view and often reality, and can also help reduce the likelihood of the public body paying suppliers to fix a problem that could have been avoided.
Use paper and pens first
Prototyping does work. And it works even better when paper and pens are used at the first stage. So much money is poured down the drain developing a big well polished theoretical product or service that rarely works in reality. Bringing potential suppliers in to help test and offer ideas and remarks is a very sensible idea. If a product or service seems like a good idea then start to build a small part (as small as possible) of the product or service. This limits exposure on many levels: financial, user experience, reputation, morale, the list does go on.
Diversifying the supply base requires a new skill
Public sector contracts need a diverse range of suppliers, from big to small, established to new, theoretically focused to delivery focused. Without this progress will not be made.
This will require a new approach from public commercial-procurement professionals.
Part of this is arming (training) commercial-procurement professionals to be able to truly assess whether big is better and how to test a target operating model to meet business and user needs.
New decade for procurement
Traditional functions that were trained and qualified to focus on spend reduction and supply base reduction need to modernise. In fact, let’s not just modernise, let’s train commercial-procurement professionals to be fit for the next decade covering, at least:
Contract management - to ensure both parties are fulfilling their obligations)
Supplier exit - on time and to the right standards)
User centred needs - getting out of the office and conducting user research)
Two way market engagement - e.g. not just “publishing a contract notice” on some complicated and hard to use ‘eProcurement Portal’
Using the right procurement regulations and procedures - not just Framework Agreements “cus that’s what we do”
Contracting for delivery - which is likely to mean multivendor and multidisciplinary team delivery
True transparency - doors fully open, drains up, no hidden gigs.
At Curshaw Commercial we are on a mission to help public bodies stop doing the same (wrong) things over and over again - the very definition of madness. We look forward to sharing more of our experience and welcome opportunities to speak to public officials and private sector leaders who want to drive real change in public procurement.