Preparing Perfect Tenders - Leeds, 4th November 2015

Been on holiday, and so not much notice for this one.http://www.passprocurement.co.uk/topics/preparing-perfect-tenders/

Ideal for me because it is just around the corner in Leeds.  And about one of my favourite topic - how to win tenders.

Bit late but still room for any latecomers.

One day on Project Management in London

Tomorrow (21st October 2015) I shall be running a one day course in London for LMC covering some issues in Project Management.  A bit late for booking for this course (sorry) but they do have a lot of other interesting courses available at their website www.lmcuk.com

And now I shall retreat back to fuming about my bank declining my card for my hotel in London because "hotel transactions are sometimes fraudulent".  Indeed, but as a frequent traveler they are also rather essential.  My hotel took the opportunity to decline my early (discounted) booking in favour of more lucrative clients.  Luckily I have found a replacement that is only a bit more expensive. 

Procurex Scotland- Tuesday 6th October 2015

Pretty much straight after the weekend I shall be going to Glasgow for the annual Procurex Scotland event, on Tuesday 6th October 2015 at the SECC.  Some very interesting talks - which I may well miss because I shall be presenting in one of the Key Event Zones.  You can't say you haven't been warned.

Hope to see you there - always an interesting event.

If Scotland is a wee bit far there Procurex events in 2016 in Wales, Ireland, and the North and South of England (some of which I shall not be at, so you can pick and choose).

Power Corruption and Lies: Volkswagen compliance

The Volkwagen cheating on emissions testing scandal is not on the face of it a Procurement issue, though it is rather similar to an old Procurement problem: lying about compliance.

Suppliers can and do fake certificates of compliance.  Part of the job of Procurement is working out when it is worth doing our own investigations into compliance.  Sometimes it is, and sometimes it is not.  Sometimes the non-compliance is just cutting corners...

This is not.  This is a deliberate and calculated fraud.  VW has already allocated $billions to the anticipated fines and law suits.  Is this enough?

In Procurement we would find a deliberate fraud a good reason for blacklisting the supplier (if such a thing is allowed, and let's be clear probably even it if is not).   Who could trust such as supplier ever again?

Standards and certification are sometimes seen as job killing and industry damaging.  Surely the market will deter bad behaviour?  In reality they are there to protect us all and prevent a race to the bottom in a (generally positive) drive for profit.  And so wrong doers are fined.

However the fines are not enough.  For a business they are a cost of doing business, and can be set against the profit and loss account.  They are, in short, a calculated gamble.  If it pays off and you don't get caught great - if you get caught, pay the fine (or in the case of Goldman Sachs agree to pay a fine without ever actually admitting to wrong doing).  That is not enough to deter fraudsters.  Not nearly enough.

We look at some of the great business scandals (Enron, Lehman, Libor, VW, Goldman Sachs, RBS) and can ask how many people went to jail?  Not many.  Literally on the fingers of one hand (mostly from Enron).  With those odds we are not detering wrong doing - the balance of risk and reward is too strongly weighted to doing whatever it takes.  Handing back your knighthood is not a risk of consequence.

If we want to change the risk balance we need to ensure that more corporate fraud is dealt with by jail time.  A nice cozy jail no doubt, but still jail time.  Nothing else will make managers think twice (and it will not make all of them do so either).  This needs to be a regular result too, not just a one off. 

We have to make managers aware that there are real personal consequences - not just corporate ones.

Bidding for HS2

The Chancellor, George Osborne, has attracted a bit of flak for inviting Chinese companies to bid for contracts for the High Speed 2 rail link from London to Birmingham.  A figure of £12bn has been bandied about, and there are complaints that he is being cynical in talking to potential suppliers before the legislation has passed in Parliament and that he should be promoting these opportunities to British businesses rather than Chinese.

Well, he is a very political beast and so we can assume that this is part of a bigger political plan (which appears to be to build better links to China).  From a procurement point of view it probably makes sense.  This is a very big project.  The Chinese have great expertise, having built far more miles of high speed rail than we have in Britain.  However they may not be aware of a decent project possibly happening on a small island on the other side of the world.  I cannot believe that there are any British (or European) potential bidders who are not aware of the project.

So it makes sense to do a bit of pre-market engagement, and effectively fire the starting gun for the competition.  A competition that will no doubt follow OJEU procedures, which will give an advantage to EU companies used to complying with them.  But it will remind them that there are competitors.  Competitors who now will have time to consider whether they would like to be involved when the time comes.  And whether a Chinese company could actually win.  The Chancellor must hope to convince them that they can... whilst fervently (and powerlessly) hoping that they don't.

Politics, eh?  Give me Procurement anyday.

Short Notice: Managing Innovation

Very, very short notice (apologies) but we are re-running the Managing and Developing Innovation course at Junction 25 conference centre in Brighouse starting tomorrow 9th September and finishing on Thursday.  If you are based in Calderdale this course will be free to you.  Anyone else will have to pay (don't ask me how much - not a lot)

If you are interested then we would be delighted to see you.  Run for University of Bradford School of Management Knowledge Transfer Network on behalf of Business Growth Calderdale.

The new season: Contract Management and Compliant PQQ courses in Manchester 16/17 September 2015

It's not just football that has a new season.  We always have a relatively quiet summer for training, and then things pick up again in September.  Like the transfer window a few things are usually up in the air till the last minute.

But, I can confirm that I shall be running a couple of courses for BIP Solutions Pass Training in Manchester this month
Wednesday 16th September I shall be running Drafting a Compliant PQQ - which is a rather interesting topic given the changes to PQQs this year.
Thursday 17th September it is Contract Management - which is a topic that I know I always drone on about, but has always been vitally important and given the changes in the PCR 2015 will now be even more important than before.

Both are at the Renaissance Marriot in Manchester, just off Deansgate and down the hill a bit from Harvey Nichols (in case you need any more incentive to come along), next to a multi-storey car park.

Hope to see you there.  Now where is that suit and tie?

KPIs in Education and Sport

It is exam result time, and as every year we have a strange situation.  Every year pass rates go up and (almost) every year this is seen as a sign of failure.  If the pass rate has gone up, then the standards must have gone done. 

It is hard to think of any other situation in which improvement in a key metric (pass rates) is seen as a problem.  Generally we think that if something is important, and measured, then over time the measured value will increase because there will be a focus on improvement.  This philosophy is rather at the heart of KPIs.

Of course there are complicating factors.  Newspapers tend to sell more copies when telling us that all is doomed and rubbish, rather than saying how bright and sunny things are.  This does lead them to finding some quite novel ways of highlighting the black lining in a silver cloud.

Politicians of course also have their own agendas - usually how rubbish their predecessors were and how brilliant they have been.  The spin again often has little basis in objective reality  (I note that this year the government were keen to push the idea grade inflation has stopped, when in reality more passed than last year - which in previous times was seen as a symptom of grade inflation).

One of the essential problems here is that we don't really know what we are measuring or why, and what we actually want to happen.  Are exams a way of determining the brightest and best?  Or are they about people meeting a certain standard?

If it is about meeting a standard then it is not surprising that pass rates increase over time - even if the standard itself is raised.  This is what we would normally expect in a business context - conformance increases, and output increases over time as people learn how to do their job more effectively and efficiently.  You would expect teachers to be the same.

If it is about identifying the brightest and the best, then there is no reason for pass rates to increase, and we could just be clear that it is a competition and top marks will go to the top say 5%, and so on down the bell curve.  Of course this does rather mean than only have of the students can be better than average (rather than most being so, as Michael Gove once rather optimistically targeted).  And it does mean that in a good year good but not great students will be penalised, and in a bad year poorer students will be rated higher.

Is it possible to achieve both meeting a standard and identifying the brightest and best?  Probably.  But that requires rather more sophisticated and complex measures than can be printed on the front page of a newspaper.

Which is where Sport comes in.  There is a suggestion that all athletes should publish their blood data, and Paula Radcliffe has had a few fingers pointed at her for suggesting that this is not a good idea.  No one has yet accused her of being a cheat, but there is a feeling some would like to.  I think she has a point.  The data is complex and needs considerable expertise to interpret.  My statistics are not great, but I do understand the main points that any repeated measurement has a variation in it, and that rogue measurements do occur.  Not only are 50% of measurements above the average (mean, assuming a Gaussian distribution) but 2% will be significantly above (and below) the mean - more than 2 standard deviations.  So we WILL get outliers.  Odd results.  Random high scores. 

Do you think that newspapers seeing one very odd high result will say "oh that is with the margin of error, and is probably random noise on the measurement"?  Or will they say "cheat"? 

And of course if you are a female athlete do you want your pregnancy to be announced through your drug testing results?  Particularly in the very early days when the body adapts but the pregnancy is not yet secure.

The point of both of these examples is that measurement is vital to improving performance - but we do have to be very clear about what we are trying to achieve, how the measurements will support that, and how we are going to interpret those KPIs.  It is not as simple as asking "what can we measure".

So, good luck to all those students who got their results this summer.  Your lives are ahead of you.  Go and do things better than us.

IChemE Engineering Procurement 22nd September 2015

I shall be running our popular Engineering Procurement course in Rugby on 22nd September.  We have already scheduled next year's date for about the same time, though that is quite a wait if you cannot make it this time.

In one day we cannot cover everything in great depth - but I do try!

If you are interested then you can get details here.

NHS Pricing on labels

Jeremy Hunt, the health secretary, is leading an initiative to put indicative prices on all NHS medicines over £20.  Though I have been negative about some government initiatives, this is one I support - though before you swoon in surprise I have to point out that I think the strapline "paid for by the taxpayer" is cheesy and unnecessary.  (I am though quite in favour of the proposal of a chap on BBC Question Time that MPs should have to wear the same line on a badge on their suits - but maybe it doesn't go far enough and we should insist they all wear HM Parliament boiler suits branded with that as a logo.  But I digress)

People are very unaware of the costs of the NHS.  A prescription costs £8.20.  I am not sure how much of that is actually administration costs (and I cannot find it - perhaps you know?) but given that a private prescription from a doctor may cost £15, and according to CIPS a Purchase Order typically costs £50, I believe that in fact ALL that charge is administration cost (and probably does not cover all of those costs).  So we literally do not pay for the pharmaceutical at all - just contribute to the administration of the process.

Which of course leads to the usual complaints that is is cheaper to buy Asprin over the counter than to get it through prescription.  People do not realise what they are actually paying for.

Let's do some back of a fag packet assessments.  (now that few people smoke, what can we use instead of fag packets?  Just asking)

Nearly 20 years ago my wife was taken ill in the USA.  Though we had medical insurance the bills we received (and had to pay before claiming back the money) where a real eye-opener.  The initial 5 minute consultation with a doctor was $50 - he said "go to hospital".  Kerching.  We went to hospital, where my wife had a 5 minute consultation ($150), and got a prescription for antibiotics, which cost us $80 at a nearby pharmacy.  Total cost $280 plus a bit of driving around.

Recently my son broke his ankle here in the UK.  A NHS doctor's consultation (she said "go to hospital"), a 5 minute consultation with a nurse, an x-ray, 5 minutes with a doctor, plaster clinic, and loan of crutches cost us £2.50 in car parking fees.  Subsequent new rubber ferrules for the crutches, x-ray, removal of cast, 5 minutes consultation with doctor cost us a further £2.50 in car parking fees.  A total of £5 and a bit of driving.

Looking on the internet the cost to the NHS might be £4 for the ferrules alone.  (Ferrules was a new word for me, so I am getting maximum mileage from it)  Based on salary cost of £50/hour that is £25 of staff time at minimum.  We haven't even considered overheads, infrastructure etc.

Based on my US experience I would expect that the cost might have been say twice what we paid 20 years ago, so $560 or £350.  According to this website that might be the lower end of a range that could run from $520 to $1000, or even $2500.


If you get something free you tend not to value it, but to take it for granted.  The NHS is free at the point of use, which is great because I did not need to consider the cost or call my insurance before taking my son to the doctor.  However I then did not actually value the service accordingly.

Incidentally my kids were born by emergency Caesarian section back in 2002.  The average bill for that in the USA according to a 2011 study by Truven Health Analytics was $50 000.  For that operation, and a month in Intensive Care Baby unit we paid just some car parking fees.   I call that a bargain.  How much of a bargain, I only realised by doing some research.

If I had been presented with an indicative bill for that service, then perhaps it would put the complaining about the price of parking into a bit of perspective.

The illustration incidentally is for a US bill for treating a snake bite.  Ouch and ouch again.

Tender Evaluation and moderation

Stephen Ashcroft of AECOM, and Spend Matters have highlighted a recent case between Bristol Missing Link (BMLL) and Bristol City Council.  They have fuller details but in short BMLL are the incumbents and have challenged the award of a contract to a new supplier after a tender process.  The decision was close, and the court has suspended the implementation of the contract until a full hearing of the challenge.

It will be interesting to hear what the verdict is in the full case, but in the meantime there are a couple of points to remind ourselves about when evaluating tendering.

The case hinges on the scoring process, and the subsequent moderation of those scores.  Bristol's case appears to be hampered by the lack of evidence (either written at the time or subsequently to the court) about those processes. 

The names of most of the individual evaluators have been redacted, as I would expect (at least in initial stages of the case).  Their initial scores have been significantly changed during the moderation stage because they were initially not in compliance with the published scoring regime - these changes were significant enough to change the award of the contract.

So the key points I take from this are;
- firstly, the (external) chair of the moderating panel should have emphasised before marking began that the published scoring regime must be used.  If they (she) did then the panel did not listen. 
- second, that instruction could/should have been documented to demonstrate compliance to process
- third, those scoring sheets are a matter of public record and available under the Freedom of Information Act for precisely this sort of situation
- fourth, moderation of scores is allowed and this was stated by the court
- fifth, they were correct to moderate rather than take a simple average
- sixth, they were correct to re-score at moderation to ensure the correct scoring process was adhered to, but
- seven, they should have documented that process including the instructions to evaluators, the process followed, and the consequences.  I am surprised that when the consequence of the re-scoring was a change in the successful bidder that this was not checked, re-checked, documented and reported in detail.  That is what I would have done.
- eight, there seems to have been no report on the tender process, which should be a matter of routine but particularly so when the decision is close or is in any way subject to re-evaluation
- nine, the evaluation panel are either unwilling to give evidence or have been instructed not to give evidence to the court, which does not help their claim to be acting in an open, honest and transparent manner (regardless of whether they actually are doing so, which I expect they are).

What do I take from this?  Well as chair of the panel, do instruct your evaluators and make a note of doing so.  Document the moderation process.  When bids have to be re-scored, then ensure that all bids are scored using the same regime and all the individual evaluators are fully committed to their scores for each bid.  When bids are close, get evaluators to double check their scoring and document the responses.  Do write a tender report detailing the process, the scores, any issues, and comment on the overall result.  Do create an evidence trail, and do expect that trail to be public knowledge (though in practice most times it will not, or will not matter).  Be prepared to defend your process and your decision.

This is at the heart of the tendering process.  If bidders do not trust you to evaluate their proposals fairly and in line with what you have published, then there is no point in bidding.

Eliminating PQQs - the consquences

I know I keep wittering on about this, but I believe that the elimination of PQQs will have the opposite result to that intended - increased participation by SMEs in public contracts.  Philip Prince of Constructionline takes a similar view in Supply Management Magazine.


http://www.supplymanagement.com/blog/2015/06/new-public-contracts-regulations-risk-increasing-the-burden-on-buyers-and-sme-suppliers

Tunisia - an act of economic sabotage as well as murder

Another off topic post - it seems to be a week for it.


I had a holiday in Tunisia a couple of years ago.  Two families with young children had a great time in Monastir - down the coast from Sousse where the terrorist attack happened. 


It is shocking to think of such terrible things happening to holiday makers, particularly on a Friday during the Muslim holy month of Ramadan. 


Tunisia is sandwiched between Libya and Algeria, both deeply troubled countries with long term problems - but cushioned (or encouraged) by oil wealth.  Tunisia is small and depends very much on its tourist economy to support its new democracy after years of a money grabbing dictator (and I mean that literally: he is reported to have taken gold bullion with him on his flight to exile in Jeddah).  The attacks were not just on western holidaymakers, but on the Tunisian economy.  The intention is to cut off funds from tourism, impoverishing all Tunisians, and creating a suitable environment for more radicalisation (i.e. poverty).


I wish all the holidaymakers well, but also the vast majority of the Tunisian people who need our support through our visits and foreign exchange.  And there is plenty to see - as well as the Mediterranean, there are wonderful Roman remains (including of the city they built on the legendary Phoenician city of Carthage, and the pictured arena at El Jem).  When you judge it safe, I hope you will go visit.  Maybe even this year.  There are risks everywhere, and Tunisia needs the solidarity of the West, not us turning our backs and leaving them to their fate.


From the procurement point of view - this creates an interesting problem for the travel companies.  They have many holidaymakers who will want to rearrange their holidays, and the travel companies will be keen to do so in order to maintain their income.  But where? Greece has its own problems at the moment.  Turkey being a (safe and beautiful) Muslim country will not appeal to many holidaymakers.   Same applies to Egypt and the lovely Sharm el Sheikh, and to Morrocco (though I prefer the wonders of Marrakech to the beaches).  Will the hotels in Spain be cranking up their prices and looking for a windfall?  Are the travel company buyers in a position to bargain?  Can they extract moderation this year in return for promises for next year?    It will be interesting to see.

Plastic Bags and recycling

I used to work in the plastics industry, so here is a rather different type of blog post. 


I got a link to an article on Spotichemi which matches my views/biases (delete to taste).  A lot of negative comments are made about plastics which take no account of the balancing benefits - such as lightweight packaging, and improved food shelf life.  In any case, though plastics are visible, they are a tiny part of overall use of petrochemicals - and packaging is a small subset of that.


The focus on eliminating plastic bags is like swapping out the bulb in your fridge for a low energy one - whilst laudable in intent there may be unmeasured costs, and it is surely not the most important thing to focus on.  In your house you should probably start with your boiler/radiator/thermostat.  In the outside world, then avoiding oil as a heating fuel and increasing car mpg would have far larger impacts and are also relatively easy to achieve.


Getting rid of plastic bags may make you feel better - but does it really achieve anything of note, apart making people feel better about themselves as they load their paper bagged groceries into their 4x4?


Feel free to disagree.

Further Public Contracts Regulations 2015 courses

My colleagues at BIP Solutions have got just a few more courses to run before we have a bit of a break for the summer.  The Autumn is pretty packed for me both in the UK and overseas, so I am reasonably pleased that we have a time to regroup before then . We shall be tweaking the courses as we become clearer about the new PCR2015, and what people want to know about it.

In the meantime I shall be presenting the existing (and already modified) event in Manchester next Tuesday 23rd June 2015 at the Marriott Renaissance - details here.  Last time we ran this event in Manchester it sold out - so I hope there will still be room for you if you want to go along.  We always take a few extra copies just in case.

The next day (Wednesday 26th June 2015) I shall be running the event at the Thistle in Newcastle Upon Tyne, and then that will be it for me for open courses in June.  One of my colleagues will be running the event in London on the 25th (at the very nice Kingsway hotel)

Return from the USA

I've just returned from a couple of weeks in Florida, catching the sun, going to Disney and boring the kids at Kennedy Space Center.  You might expect that I would come back with some interesting tales of procurement, or at least shopping - but you will be mostly disappointed.  I will say that HockeyMonkey are very good for (ice) hockey kit, which we got delivered to our hotel (a little reward for the kids for winning the EIHA U14 National Championship - sorry to be a proud parent on your time), and that the Memorial Day sales are really quite good.

The more interesting thing for me, as a once frequent visitor to the USA who has been absent for 17 years, was the reminder of the strength of the US economy.  Ok, Orlando is a rather special case - particularly on Memorial Day weekend.  But the sheer number and energy of businesses and shops is quite remarkable for a Brit.  I am sure that Americans will tell me that things could be better, but it was a reminder that this is the number one economy in the world for good reason.

I do hope to be back rather quicker.  In the meantime, here is my favourite purchase from the trip.

In the meantime, there have been some changes to the training plan (as always) and I shall give the details of those later in the week once I have reconfirmed arrangements.

 

Autumn public sector procurement courses

My colleagues at BIP Solutions are arranging a good range of courses for autumn 2015.  I dont want to pre-empt them, though so have a look at their website.  They will be keeping me pretty busy at the back end of the year.

Cabinet Office new faces - a correction

Apologies for getting it wrong in the earlier post - Oliver Letwin is taking overall responsibility for the Cabinet Office, but the Paymaster General will be Matthew Hancock.  I have edited the previous post to take account of this - you can see the original text score through.

Some of my comment remain the same - it is an important role - and some changes. 

One of the comments I made I now have to backtrack on, and will worry about.  Mr Hancock is clearly young and ambitious.  He has experience on the Public Account Committee, and been Minister of State for Business and Enterprise.  These should stand him in good stead overseeing public procurement.  But will he see this as a stepping stone to greater roles, rather than an important role in its own right (as Francis Maude clearly did)?  How he sees the role will have an impact on how he carries it out.  It is only natural that if he is focused on promotion he will look for opportunities to demonstrate that he should be promoted - that may lead to shorter term, riskier and more "flashy" initiatives which make a splash rather than longer term structural change which tends to be slow, undramatic and often underappreciated.

There will also inevitably be jokes about "Hancock's half hour", which will go over the head of anyone younger than 50 and make those of us above that think wistfully of "the lad himself".

Good luck to all of them.

New faces at the Cabinet Office

So we now know that Francis Maude has been followed by Oliver Letwin, a recognisable name

if not one from the recent front pages. the Rt. Hon Matthew Hancock as Paymaster General and Minister for the Cabinet Office, which will be overseen by Oliver Letwin.   I hardly expected George Osborne to decide he preferred the Cabinet Office to the Treasury.

Of course we have to wait to see Mr. Letwin's Mr. Hancock's priorities, but we do know from his past that he is keen to reduce bureaucracy and to drive down prices.  To be fair, I don't know of anyone who is in favour of the opposite.  He is reported to have said that suppliers need to feel a bit of fear in order for the public sector to get value and innovation: that sounds like a soundbite, and the interesting thing is what it would mean in practice.  The Public Contract Regulations 2015 are still bedding in, and the Cabinet Office will play a big role in how they are interpreted in the UK.

A potentially positive thing is that Mr. Letwin has been around the block a few times, and so should know how Whitehall operates, and hopefully will see this as a real and important role rather than a stepping stone to roles.

So, welcome and good luck.

Election Day

Not a party political comment, but I hope you vote.  It makes a difference.  This time more than most.

Questions raised by the new Public Contracts Regulations 2015

We (at BIP Solutions) have run a few of our courses about the impact of the new regulations, and have had some great questions from the delegates.  Most of which we could answer - but a couple we have had to dig into before we could give a full answer.  Which is great - because now we can tell anyone who is interested.

As I have said before, it takes time for new regulations to be bedded in and for people to understand what there is between the cracks.  Of course eventually we shall have case law, derived from challenges, but that could be a year or two away yet.

The questions include;
- When do we have to move to full electronic tendering?
- Do we need to advertise our tenders on Contracts Finder?
- as a consultancy/agency do only our fees count towards the OJEU limit?
- Do we need to have all our documentation available when we publish our Contract Notice?

Good questions all.  And if you want to know the answers, why not come along to one of our events in the next couple of months.  A few of the dates have been rearranged and others added but there should be an event (relatively) near you unless you live in Scotland (where the new PCRs have not yet been adopted).  Details are here.

UK Public Procurement - change is coming

Just a reminder that Francis Maude is standing down at the election in 2 weeks, and so there will be changes at the Cabinet Office, and therefore potentially throughout public sector procurement in England (at least).   His swansong will have been the requirement for all contracts below the OJEU threshold but above £10 000 (Central government) or £25 000 (sub-central government) to be conducted using a single stage open process (i.e. no PQQ stage).    I have wittered on before about how I am far from convinced that this is a good idea (especially for Buyers, but also for suppliers) so let's leave it there.

Mr Maude spent a long time at Cabinet Office, and was notably interested in Procurement as a tool for government policy.  His replacement, of whatever political flavour, may share his zeal - or just see it as a stepping stone to a "real" job at HM Treasury.  Whichever, we need to be on the look out for any indicated change of direction.

Not least of all because (as again pointed out by Peter Smith and SpendMatters) Contracting Authorities have an obligation under the Small Business, Enterprise and Employment Act 2015
 to "have regard to any guidance for the time being in force under this section".

So don't forget to keep reading the PPNs (Procurement Policy Notes) from the Cabinet Office.

New Public Contract regulations - other blogs

On Wednesday I ran my first event of the PASS  series of Impact of the New Public Contracts Regulations 2015.  Not as especially catchy title, but as one of the delegates said "it's not something we want to know about, it's something we need to know about".

Very interesting session with very knowledgeable and engaged delegates, two of whom were good enough to give me a lift to the station because I over ran.

If you want some additional information, a pair of law lecturers from Swansea and Leicester are going through the regulations in tandem on their blogs - one per post.  This onerous task (which I discovered from Peter Smith's Spend Matters blog)  will take them until autumn, but it is an interesting exercise for anyone wondering (as I do) where the challenges to the new regulations are going to arise.

The blogs are;

www.telles.eu
www.howtocrackanut.blogspot.co.uk

Extra date: Bristol 5th May

Another of the impact of the new regulations courses.

Impact of the new UK Public Contracts Regulations 2015

My friends at BIP Solutions PASS training are running a bunch of courses to help people understand the new UK Public procurement regulations and what it means in practice.  Remember the new regulations are already in place for Central government, and start today for other government bodies (unless you are in Scotland of course, when the regulations will come later in the year).

There is massive interest in these events (some of which are sold out, which is something to lift a trainer's spirits).  Full details are at the link here, but new dates and locations are being added quite regularly at the moment.

The locations are really spread around the country, so there should be one fairly near you - rather than the more standard axis of London, Birmingham, Manchester.

I am delighted to be one of the consultants delivering these events, along with my colleagues Eddie and Digby.

If you wish to attend (or miss) one of my events I should be presenting at:
Cambridge 8th April 2015
York           15th April
Newcastle   16th April
Sheffield     22nd April
Birmingham 30th April
(I'm mostly doing other things in May)
Lincoln        3rd June
Cambridge   4th June
Birmingham 10th June
Nottingham 17th June
Newcastle    23rd June

Oh, and I shall be at a new event in Birmingham on 4th July which I shall cover later.
All dates subject to change, and of course we may move around presenters depending on circumstances.

So, hope to see you there - do bring questions and examples

Negotiation in the Public sector

Negotiation is one of the key skills in business, but it has been mostly excluded from EU public procurement - until now.  The new regulations move negotiation from a "only if you have to" route to a potential alternative to a standard restricted tender.

The intention is clearly to try and get some better value, and to shake things up a bit in the bidding process. 

What concerns me is that the Public Sector might be de-skilled in commercial negotiation.  Now as a trainer, de-skilling is generally accompanied by the sound "Ker-Ching", but in this case I don't have something to sell (at least not yet - we are talking about it).  To me there has got to be a risk that skilled commercial negotiators who did this all day long in the private sector part of the business will have  a real advantage over Public Sector buyers.  Training would help (I would say that, wouldn't I) and so would bringing in people from the private sector (though there are problems with that), but the sort of skill and expertise needed to match the private sector is going to take a long time to build up.  Obviously the regular CIPS negotiation competitions will provide some people with the appropriate battle scars.

I wonder what this will mean, and I don't have any easy answers.  Does it mean that buyers will avoid these routes?  Or that they will try them and be burned?  Or will there just be lots of questions?

I am interested in people's views - and later in the year I hope to be involved in some suitable training targeting public sector buyers.  And possibly private sector sales teams too.  Lots of things in the air.

Consultancy for the Public Sector - 6 to 10 July 2015

It is a big change to move from working in the public sector to working for yourself as a consultant.  If you are interested in doing so then I am happy to chat to you and give you what tips I can, but you might be better off going on a dedicated training course such as the one run by Public Administration International (PAI) in London.

It is particularly useful for international delegates, not just those in the UK, who are interested in working as a consultant with organisations such as the World Bank, United Nations etc.
Full details are here.

PAI are not someone I work for so I am not selling my own training here - it is purely a public service announcement.  They are a very impressive outfit in central London and I have no reservations about recommending them.  The fees are quite reasonable as these things go.

If you are setting up as a consultant - good luck.  It has its ups and downs, but it can be very satisfying and interesting.

Preparing Perfect Tenders - Birmingham 25th March 2015

I am taking over the Preparing Perfect Tenders course in Birmingham from my colleague Eddie, and so I have the opportunity to repeat the event I ran last month in Manchester.  Hopefully with new jokes.

 

Of course, since then the new EU procurement regulations have come into force in England, Wales and Northern Ireland.  How does this change things?  Why not come along to the Novotel and find out?  (Ideally having booked first of course)

 

 

Best Value and Gold Plating of UK Public Sector contracts

Local government minister Kris Hopkins has apparently accused the public sector of "gold plating" procurement requirements in the proposed revision of the Best Value guidance for local authorities.

Article in Supply Management and the proposed revision itself.

His suggestion is to minimise unnecessary paperwork and a tick box mentality, which I think is something that we can all support.  Though to be honest it is not my definition of either Gold Plating or Best Value - it is more about efficient processes.

Whether gold plating is common is something the Minister will have more data on than me, but I think we can consider why it might happen - there is no upside to public sector procurement.  In a commercial environment any savings or added value go through to the bottom line, and add to profits with (hopefully) bonuses all round.  In the public sector any money saved just goes back into government coffers to be used elsewhere.  Any added value is possibly not appreciated (and possibly seen as gold plating itself) (Personal recent example - I bought a First class train ticket for less than the equivalent second class fare.  Don't ask me how that works.  But if I worked in the public sector I bet there would be complaints that "we don't pay for first class travel" regardless of the fact is was actually saving money).

On the other hand any problems in public sector procurement can be very visible, and the procurement professionals might be the ones offered up in sacrifice to the media rather than the relevant Minister or Chief Executive. 

Whenever there is no upside and a very large potential downside then people tend to become risk averse and insist on belt, braces and a second belt just to be sure.   That might lead to gold plating of specifications.

Paradoxically allowing procurement to occasionally fail (a more commercial approach) might actually lead to more success.


Incidentally, the Best Value document mentions British Values - which is one of those things we all know what we mean but is very difficult to put down clearly in words.  Though democracy, the rule of law, individual liberty and mutual respect and tolerance of different faiths and beliefs (all listed) are part of them I am not sure that they are either definitively British or comprehensive.  A topic for another post I suspect.

Professional Purchasing Skills April 2015

I shall be running Professional Purchasing Skills in Dubai 19th to 23rd April 2015.  Details are linked to the title.  Always an interesting event - hope to see you there.

The Impact of the new EU Procurement Legislation

"The impact of the new EU Public Contract legislation" is a new event from PASS, which should be all you need to understand the change in the law from 26th February 2015/1 April 2015.  The good news is that the course is being run in a wide range of locations around the country, from Exeter to Newcastle, Cardiff and Belfast - so there should be one relatively near you.  The bad news (possibly) is that I shall be leading some of those events, but to make it interesting I won't tell you which ones yet.  So there is still a chance you will be lucky and get one of PASS's other tutors. 

Don't want to take the risk?  Well I shall be in Birmingham on 31st March 2015, and a further 5 or 6 during April, May and June  - none of which are actually on the website yet.  So book early and you can avoid me!

Those of you who were at Procurex North recently will I hope have found that this topic  is interesting - the law has changed, and so there will be a whole bunch of new case law to be developed.  And most Buyers will be hoping it is not them that is the basis of that case law.  We hope to point out some of the risky areas. 

And do remember these regulations apply in the UK, excepting Scotland who will have their own legislation later in the year - and yes we shall have events about that too.

Joking aside I hope to see you at one of the events.  You might also want to listen in to Eddie Regan, our in house guru, during his free webinar on Monday 9th March 2015 at 10:30.  I know I shall.

SMEs and UK Public Procurement

SME's are constantly told that the government wants to increase the amount of business that it is doing with them.  This is an important issue, one very dear to my heart, and as Peter Smith of Spend Matters points out the government is not telling the truth about their failure to deliver on this.

Peter links to the latest report which is extremely misleading about some of the key points, and skips over what I think is actually vitally important news about payment terms, and some potentially good news about a revamp of the currently lame Contracts Finder.

Before I rant about the data, let me get to the good news story: from 25th February 2015 everyone in the supply chain to central government must comply with 30 day payment terms.  We can compare this to the Tesco/Sainsbury problems and see how vital this is for SMEs

The government has consistently remembered the importance of this issue, but not delivered - as signified by the changing language.  25% business central government business with SMEs has moved from a commitment to a target to an aim to an ambition and I think it is currently an aspiration.
The concept has suffered from an internal government clash between Mr. Eric Pickles' concept of piling things high (at sub-central level) to get economies of scale, and Mr Maude's more nuanced approach.  But the upshot is that once again support from SMEs has not delivered. 

I used to deliver programmes for BusinessLink operators, so I am probably biased but when these were cut SMEs lost an avenue for support (there are many valid discussions about whether it was the right support to the right businesses, but still).  Directing more procurement to them would have helped them during an incredibly difficult time for many SMEs.

SMEs have been facing a terrible situations with banks not wanting to lend, reduction in public spending programmes (suitable for SMEs), reduction in overall business spending, withdrawal of BusinessLink (ok, maybe not such a loss for many), increased competition (from the many new one man bands and SMEs set up during this time) and exploitation from big customers paying late (if at all).  The good think about Public Procurement is that it does pay, and relatively promptly. 

I think it is great to encourage these business- some of which will grow, and others of which will die with the ones in the middle providing a living for many people.  There are real problems in targeting government contracts to be appropriate for SMEs, and the government should not shy away from discussing that but it should also be honest.

The headline on the report says 25% business with SMEs.  The text says £11.4bn and 10.3% directly (with 15.8% indirectly).  Let us be clear - indirect does not count.  If I buy a sandwich, and the shop owner buys some cheese with the money to make my sandwich, I did not buy some cheese.  I did not say not stipulate where the shop owner bought the cheese, or how much he paid or when he paid, or who he bought it from.  I bought a sandwich. 

If we are going to include the supply chain the number should be a lot higher than 25%, because the shop owner might employ a cleaner - should that count as my spend because I bought a sandwich?  The 25% figure is a nonsense even before you get to the fact that the indirect spend is based on information provided by big suppliers without any actual evidence.  It is only been given so that the Cabinet Office can claim to have met a target (sorry an aspiration) ahead of the election - in doing so it degrades trust in public pronouncements.

In the breakdown there are good news stories: BIS is 34% direct, DCLG is 24%, DFID is 30%.  Why not trumpet those successes and explain why the DWP is only 4%?  And how you mean to address the overall spend?

Remember though that central government procurement at about £100bn is only half the total with the other half spend by sub-central bodies who may be better at engaging with SMEs.

And the last point, which I again I need to declare an interest on, is Contracts Finder.  The revamp is very necessary, as on the old version the search engine did not work on the front page which is a pretty serious flaw (it works on the new version).  More importantly awareness of it was low - one courses rarely did more than half of the delegates know about it before I told them.  It cannot bring in SMEs if they do not know about it.  In the press release Lord Young says that it is unique "in terms of scale and ambition" - well the old Supply2gov (run by BIP Solutions, who [full disclosure] I do work for) had pretty much the same function, the same ambition, a larger scale, and much higher brand recognition.  (Note BIP Solutions now run Competefor which does a similar job on a smaller scale).

OK, what I've been ranting - what do I want?  Honest data about the situation, a renewed commitment to increasing direct SME spend from 10% to 25% (or even 20%) over the next parliament, and a plan for doing so outlining the problems for particular departments and the potential costs (reduced economies of scale) and benefits (innovation, flexibility etc.).  Not too much to ask I hope.

BTW, a year ago I discussed this with a senior Labour politician and they seemed to have no more recognition of this than the current government, so this is not a politically focused rant (and Mr. Pickles and Mr Maude are members of the same party).

Procurex North #PXNorth

Procurex North #PXNorth was what I did yesterday.  And great fun it was too.  Apparently I don't look anything like my picture.  Full houses all round until the last (repeat) time, and lots of questions and one to one sessions to fill in that awkward time between sessions that I would otherwise have wasted resting, eating my lunch or checking my notes for the next session...

Thankfully nothing I couldn't answer, despite the newness of the regulations - and some genuinely interesting news about a new innovation partnership in the North West which will a) be one of the first (if not the first) and b) of great potential value.  Hope to hear and share more later.

Procurex South is 10th March and has the added advantage of Digby Barker in the Supplier zone rather than me - I am running Contract Management in Southampton that day if you want to come along.

Oh, and the Yang Sing restaurant is just as good as it was when I lived in Manchester a dozen years ago.  Great night out.

New EU regulations and Procurex North

Procurex North is this week at Manchester Central on Thursday 26th  February.  Which just happens to be the day that the new UK Procurement regulations come into force for England, Wales and Northern Ireland.  So bound to be lots to discuss - and a lot of reading, rereading and arguing for us consultants to make sure we understand it before then.  Or at least think we understand it.

Procurex North is free if you are in the Public Sector, and £95 if you are in the private sector.  Hope to see you there in the Supplier zone.  I hope you will be gentle with your questions - or rather be as rough as you like with the questions but be forgiving of my answers.

businesss cards

I am moving offices, and today I decided to throw old all the business cards I have collected over the years.  It feels rather odd.  When I started you collected business cards and put them in an indexed folder of contacts.  Now we get them and put them into our database.  If we forget it takes seconds to find a contact on LinkedIn, Twitter or Google.  Those little rectangles now have a half life measured in hours.  Still feels odd though.

Innovation in Britain

Innovation and Mergers & Acquisitions were the topics at University of Bradford School of Management last night.  Jens Schneider gave an insightful M&A talk based on his experience.  TL:DR version is don't - only one in three actually generate increased value.
Rob Munro of System Growth gave an equally interesting talk about the need for Growth Engines in the UK.  I don't disagree with his message but I think we were the wrong audience - academics, consultants, MBA Students and SMEs.  I hope he manages to get the same message to where it must be heard - senior management, banking and finance (I think VCs mostly get it).

New EU procurement regulations - update

It looks like the new EU procurement regulations will be applicable to UK Central Government from 26th February (except in Scotland), and other bodies from 1 April 2015 (except in Scotland).

And I got confirmation from the publisher that we shall be printing an updated edition of Excellence in Public Sector Procurement just as soon as we can.  So I should better get on with writing.

New UK Procurement regulations - February 2015

The new UK Procurement regulations, enacting last year's EU procurement directive, have now been introduced to parliament and will take effect in England,Wales and Northern Ireland on 26th February 2015 I believe (the document linked to by www.gov.uk still helpfully has the phrase "date to be inserted" where the date should be, so I am not certain).  Scotland will follow later in the year (reminding us once again that Scotland, whilst part of the Union, is a different country with a different legal system).

These new regulations are something we have been discussing for a couple of years, and anticipating in earnest since this time in 2014 when the directive was passed.

There are some significant changes such as new procurement routes (Innovation partnership, competitive procedure with negotiation) and some more minor ones (the process should generally be faster).

If you want to know more then you can read the PDF at this link here, or attend one of the training courses that I have been plugging run by BIP Solutions or the Chartered Institute of Procurement and Supply where it will be it will be a little bit more digestible.    There is also a government discussion document about the introduction of the new regulations which is available here.

When I have had time to digest the changes, we shall also update our book Excellence in Public Sector Procurement (Emmett & Wright, Cambridge Academic 2011) which naturally will need to take account of the new regulations.  No timescale for that, but not before the summer I expect.

Bullying in the supply chain: Tesco

Following on from Sainsbury, the media is now focussing on Tesco and late payment.  The BBC had a very relevant interview with a small supplier from October 2014 to illustrate this week's story - Moo Chocolate.  Their point was that after contract Tesco decided to pay them late (or in their words to extend payment terms), and that the £6k involved was small change to Tesco but their monthly wage bill and late payment would have meant closure.

The interest on £6000 for an extra month is maybe £60 (based on 10%pa, which is probably too high as interest paid, and too low as interest charged).  I know that the cumulative sum of all these £60 is going to be a big number, but let's think about this in more detail. 

Firstly, if the buyer thought there was another £60 to be taken out of the price why didn't they go for it at the initial contract? If not, what do they think the consequences are going to be?

So, secondly, from working with ASDA Walmart years ago I believe that products are only going to be put on a supermarket shelf if they can make more money from the product than from whatever is on the shelf at the moment.  How much more?  Well I don't know.  But maybe 10% more is realistic.  Note that that is 10% more profit, not 10% more on the price.  In the case of small niche products like this chocolate bar the price is likely to be higher than Cadbury's anyway, but the profit margin will depend on a wide range of factors (raw materials, marketing, order costs, economies of scale in manufacturing, supplier power, contribution to supermarket promotions etc.).  So if the small supplier closes because of trying to get £60 extra out of the deal, you lose £60 in extra margin.  (yes, it will be replaced but if it could be replaced by something with a higher margin it already would have been).  That seems quite a risky way of doing things, unless you are absolutely certain that you can get the money out of the supplier - in which case see point 1.

And of course Tesco are now tarred with the same brush as Sainsbury, and in fact more publicly - which does not help their public relations and may have subtle longer term damage to the brand.

Was the £60 worth it?  Are the other £60s (from other suppliers) worth it?

I (oddly) hope that it is part of a considered strategy.  But I fear it was just opportunistic.

By the way, I was helping ASDA Walmart with bringing in these smaller suppliers.  The team there was well aware that small suppliers needed support before they were handed over to the "beasts" in category management who are as tough as they need to be.  And I don't underestimate how tough you need to be to do those jobs (I don't think I could) but you also have to be careful not to cross the line into being tough all the time when it is actually damaging to your long term interests

Procurex North Manchester 26th February 2015

It all seems to be Manchester this month.  Which suits me - always great to go back.
As mentioned in an earlier blog I shall be taking part in Procurex North at Manchester Central on Thursday 26th February 2015.  For those who don't recognise the location, it is the conference centre formerly known as GMex, where I once saw Prince - back when he was "the artist formally known as Prince".  Parking underneath GMex, sorry Manchester Central, tram  stop Deansgate-Castlefield, (formerly known as GMex) or St. Peter's Square (still called that as far as I know)

I shall be running the Supplier Training Zone (details here) looking at the new EU procurement regulations which are coming in (literally) any day now, sustainability and selection criteria. 

There will also be a Buyer's training zone, an E-enablement zone (where I hope to be able to sneak in to hear the latest about procurement cards), and keynote speeches from Sir Howard Bernstein (Chief Exec of Manchester City Council, and one of the architects of the great development of Manchester over the past 20 years),  Jim Hemmington (head of procurement at the BBC - don't forget to ask questions about Salford), Sally Collier (Chief Exec of the Crown Commercial Service) and several other speakers.
Plus the usual array of exhibition stands.

Always a great event - hope to see you there.

Preparing Perfect Tenders, Manchester 25th February 2015

Another course I am running in February 2015 for PASS Procurement is Preparing Perfect Tenders - also in Manchester at the Mercure Piccadilly.  The next day is Procurex North at GMex if you want to make a trip of it.

Details are here

Introduction to Public Procurement: Thursday 12th February 2015, Manchester

I am running an Introduction to Public Procurement for PASS Procurement at the Mercure Manchester Piccadilly on Thursday 12th February 2015.   Usually a very good event, with lots of  people relatively new to Public Procurement - so they often ask the most penetrating questions!

Full details on the BIP Solutions website here. http://www.passprocurement.com/public_sector_event/introduction-to-public-procurement/

Contract Management training 19th February/10th March 2015

I am running a Contract Management course for PASS (part of BIP Solutions), and they asked me to write a few word about it for their blog.  Here it is - Essential Contract Management.

I am running the course 19th February in Liverpool, and 10th March 2015 in Southampton (but not 25th March in London, because I am running Preparing Perfect Tenders that day in Birmingham).

Hope to see you there.

Sainsbury's Buyers: Bullies or idiots?

Well, probably not either - but you might have thought those were the choices when looking at how they have been treating some of their small suppliers over payment terms.

Spend Matters blog has been running a series of articles about this by Peter Smith and Prof. Andrew Cox, and I have been chipping in in the comments.  Are Sainsbury's buyers ethical, misguided or completely right?  The TL:DR version is that some people will see this as unethical abuse, others as a legitimate use of their position, and others concern that it is a short term gain with long term damage to the supply position.

My thoughts are that there is likely to be short term pressures that may have long term implications, and that aggressive price tactics may lead to future price rises.  And that it seems bizarre that large relatively cash rich businesses (supermarkets) with low borrowing costs are extending payment terms to small suppliers/contractor who have to pay higher borrowing costs  - if they can borrow at all.  Isn't there a way to get better prices for shorter payment terms instead?

I think that we all agree that the important thing is that the decision should be made after a full and detailed consideration of the implications and results.

Interestingly enough Supply Management magazine just sent round a Survey Monkey questionnaire that might be related to this discussion: Are retail buyers damaging the profession? - you can fill it in here.

2015

Happy new year