PLC Public Sector reports:
Benjamin Franklin may not have had public procurement specifically in mind when he set out this maxim, but it is certainly an approach which proves its validity on an ongoing basis. This post looks at some recent news stories that highlight the potential pitfalls of an inadequate planning stage in the public procurement process.
Search and rescue helicopter procurement in a spin
In possibly the most high profile public procurement failure of 2011 (so far!), the MoD cancelled its £6 billion procurement for search and rescue helicopters and called in the police after the preferred bidder owned up to having accessed commercially sensitive information. Philip Hammond, the Secretary of State for Transport, stated that:
“The irregularities included access by one of the consortium members, CHC Helicopter, to commercially sensitive information regarding the joint MOD/DfT project team’s evaluations of industry bids and evidence that a former member of that project team had assisted the consortium in its bid preparation, contrary to explicit assurances given to the project team.”
It is possible to take a view that this was unavoidable and that it is impossible to plan against the actions of one individual, however, this was a £6 billion procurement, on which the various parties will have incurred several million pounds in the procurement process. Yet it appears from Philip Hammond’s statement that a member of the project team with access to highly confidential information was allowed to go and work for one of the key bidders part-way through the procurement process on the back of an “assurance” that they would not pass information on.
If this is the case it should not have been allowed to happen, in any procurement the project team (and in particular those who will be involved in the evaluation process) need to be identified early and appropriate measures need to be put in place to prevent any conflict of interest arising during the course of the public procurement.
Take two for the DfT shared services centre
The recent confirmation from the Department for Transport that it will be launching a competitive tender for running its shared services centre allows us to revisit one of the most criticised procurement exercises in living memory. In December 2008, the Public Accounts Committee published a report on the manner in which the DfT had established its shared services centre. The report reads as a “how not to conduct a procurement” guide with particular highlights being:
- To save time the Department used an existing framework agreement for the development of the centre, rather than carrying out a competitive tendering process; as a result it did not specify what it actually needed.
- The Department had “thoroughly inadequate” project management staff lacking the necessary skills and experience.
- Within two months of the project starting, the Department knew that it’s initial assumptions were incorrect but did not deviate from its procurement timetable.
The key lessons for the planning stage are obvious:
- Most importantly an authority must adequately research and specify the services it actually needs. It is this specification that must then drive the procurement – not the availability of a seemingly easy option.
- A procurement project must be adequately staffed (in terms of numbers and skills) from the beginning with plans in place for extra assistance at appropriate times.
- Finally, having a timetable in place does not mean that it must be religiously adhered to when it becomes clear that things are going wrong. Good project management means that plans are kept under review throughout the procurement process and if there are good reasons to adapt them, then this should be done.
Outsourcing mustn’t mean completely deskilling
David Clarke, the CEO of the British Computer Society, has recently warned Parliament’s Public Administration Select Committee that, as a result of outsourcing deals, public authorities have not retained the necessary expertise to deal with the private sector in the IT sector on a level playing field. The results of this are that:
- Contracts cannot be properly managed.
- When contracts draw to a close they cannot be properly re-procured because authorities do not have the knowledge to ascertain what they actually need or what can be delivered.
- Public authorities have become overly dependent on the private sector.
To reduce the risk of this happening authorities outsourcing anything for the first time need to consider the whole project life in their planning and not just the procurement phase. Who will be responsible for managing the contractor? Who will have responsibility for the contract at senior management level? What will the exit strategy be? How will the success of the project be measured? These are all questions that, along with many others, need to be asked at the outset of the procurement phase, not when a contract has been signed.
A final thought
It is easy to look at what can go wrong with a public procurement and become obsessed with planning for every possible eventuality. This is counter-productive, there will always be risks, but these can and should be managed. Good planning does not mean procrastination and is not an excuse for complete inertia. The important thing is that an authority takes the time to assess what it needs, the risks involved in delivering those needs and then moves forward in the manner that best mitigates those risks, rather than ignoring them.
PLC Public Sector will also shortly be publishing a podcast on planning a public procurement featuring Kirsten Maslen of PLC and David Gollancz of 11 KBW.