IChemE - Restarting Supply Chains - 5th August 2020

Whatever we think about the current pandemic  - whether concerns are overblown, whether it will be over soon, or whether it is serious and we are stuck with it for months - it is clear that there has been major disruption to supply chains.   We can hope that everything will very quickly get back to normal - but there is an element of wishful thinking there.

You might think that this is a great chance to restructure your supply chains - or that things will quickly revert to exactly what they were before.

With IChemE we are running an online seminar that helps to cover all of these topics, and will help you to think through your options and choices.  And we hope to cover the possible disruptions caused by the UK leaving the EU REACH regime a bit too.

As with any disruption, you can wish and hope - or you can plan and organise.  We hope to help you with your planning.

There is a guest speaker that we are not quite able to announce - watch this space.

Full details and booking arrangements are here.

CIPS Applying EU Procurement Processes Manchester 18th May 2017

I am running the CIPS course on Applying EU Procurement Processes at the Radisson Manchester Airport on 18th May 2017.

Full details are here.

This is a follow on day to the Introduction to Public Sector Procurement, which is running the day before.  We look in  more detail at some of the less common EU procurement processes such as Competitive Dialogue, Innovation Partnerships, Dynamic Purchasing Systems etc.

It is not essential to do the Introduction course first, but there is a reduced rate for doing both if booked together.

Hope to see you there.

Deloitte and Public Procurement

Having had a very busy couple of months I find that I am still angry about Deloitte deciding not to bid for UK government contracts for 6 (or 18) months as a result of one of their staff leaking comments on UK government preparations for Brexit.

Let me just go over this again, now it has simmered gently.  Deloitte are a private company and are compelled to do what they think will create value for their shareholders.  They clearly think that NOT doing UK government contracts for 6 months will create value.  That MUST mean they think that there is more value coming as a result of this decision.

The awarding of UK government contracts is supposed to be an impartial process with contracts awarded to the best bidder.  If Deloitte believe that they will benefit from this approach they must believe that the process is open to external influence, otherwise whether they annoyed politicians or not would not matter.

Deloitte is a leading company that has won much government work in fair competition against others.  If they are not bidding then contracts are likely to go to organisations that are not as good as Deloitte would have been.  Potentially at higher prices.  The UK suffers because of Deloitte's decision not to bid.  And they have taken that decision to curry favour with politicians.

This is corruption just as much as if they were stuffing notes into brown envelopes.

I don't Deloitte.  I do blame our politicians.

In order to work effectively (whether in the EU, or not) public procurement must be open and fair, and be seen to be open and fair, with contracts going to the best bidder not people with the best contacts or relationships.  This business  damages all parties, and particularly taxpayers. 

If find myself getting more appalled not less.  Your mileage my vary.

Training Courses: CIPS Introduction to Public Sector Procurement and Applying EU Public Procurement Processes

On behalf of CIPS I am running two courses in November at the de Vere Venues Devonport House Hotel in Greenwich (shown above, during a promotion for the movie Thor: The Dark World - incidentally I was staying there at that time.  It is one of my favourite hotels.  My son tells me the movie is good too).

The courses are Introduction to Public Sector Procurement on Tuesday 8th November 2016, and Applying EU Public Procurement Processes on Wednesday 9th November 2016.

The titles are a bit long but do rather pass the Ronseal test of doing exactly what it says on the tin.

Ideally you should do day 1 before day 2, but it is not totally essential.  I think that the Introduction course is getting rather full but there is more space on the Applying EU processes course.

They are going to run again next year (no doubt updated a little), but not until 17/18 May 2017, in Manchester.

Marmite and Brexit

So the great "Marmite dispute" between Unilever and Tesco is over, but what did we learn?

There is a "Remain" analysis here at the Independent , an over from the FT here, and a Brexit analysis here at the Sun.

There is an interesting analysis that shows both sides suffered reputational damage (Marketing Week), but that of course is what promotional budgets are there for.

What we can be clear about is that this negotiation will be going on between Unilever and ASDA (and Morrisons etc.) and between P&G and Tesco (and ASDA, Morrisons etc.).  In fact they go on all the time.  This particular spat was very nicely timed for me because I had just been discussing with delegates a hypothetical similar battle between Tesco and Coca-Cola.

Unilever will be trying to maintain their profit margin, which is about 10%.  Tesco will be doing the same on a profit margin of about 1.7% (which is way down from the 5% or so it was earlier in the decade).  So on the face if it Unilever has lots of room to deal with material cost rises caused by the falling pound/euro exchange rate.  But why should it?  It's stock price will be in part based on the strong margins, so accepting lower margins would be a doubly whammy. 

Tesco of course in this cannot afford to absorb 15% price rises, and gets to look like the good guy looking after customer interests.

This negotiation between the 2 will go on all the time - it is just rather public this time, though interestingly the resolution is not as public as the spat.

Over time prices will rise - the weak pound means that imported raw materials will increase in costs, and products Unilever makes overseas will cost more when imported (they have no reason to reduce their internal transfer price and reduce profits elsewhere).  The public will pay more. 

Another factor is that the big discount competitors (Aldi, Lidl, Netto) are European and so their own brand products (if made in the EU) will also cost more in sterling.  Despite the competition, all the supermarkets have an interest in prices going up, none can afford to absorb the exchange rate impact, and none of their suppliers will do so either.  The size and speed of the drop means that currency hedging will only have limited some of the impact, and only for a limited time.

So what is the impact?  Sterling has fallen about 15%, but in any manufactured goods the cost of materials is only part of the total cost (maybe half or two thirds) so if products are made in the UK we might expect prices to go up 7.5% or 10%, and if imported 15%. 

In addition petrol and diesel prices should rise because oil is priced in dollars. Luckily (in a way) most of the pump price is tax and so the increase will not be 15% or anything like that.

Overall some commentators who know supermarkets are saying prices will on average rise by about 5%, which is low compared to the drop in sterling.  Efficiencies, competition, UK costs and other factors will keep it low.  Inflation will rise - for a year.  Assuming that there no further drops in sterling then this will be a spike in inflation unrelated to consumption and demand, which is why the Bank of England seem rather relaxed about it.

What does it mean for Buyers?  It means overseas products will be more expensive.  And that I wish I had bought my Euros for next month's holiday in France a month ago rather than waiting.  And bizarrely, I might be taking my own wine to France!

CIPS and Brexit

CIPS have issued their first guidance on Procurement and Brexit.

TLDR version is don't panic, but do use the standard risk processes to start looking at risks in the immediate, near and further future.

Obviously exchange rates are one of the large initial risks.  After that it is sensible to look at your contracts and supply arrangements and then prioritise where you want to focus your attention.  You may even be able to get a better deal.  You never know.

Brexit and Public Procurement

So now the United Kingdom of Great Britain and Northern Ireland has voted to leave the European Union, what will change in our Public Procurement?

In the short term, nothing much.  What do I mean by the short term?  Well at least two years, which is how long it will take Article 50 to be applied to allow us to leave.  Bearing in mind the politics, than probably means at least 2 and a half years so 2019.  Some commentators are saying 2020 would be more realistic, but who knows? 

What will happen then?  A lot will depend on what happens in the intervening time.  Will the UK stay together or break up?  Which could lead to quite different procurement regimes in the 4 major countries (which are at the moment only a bit different).

It is likely that whatever else happens England (largest country in the UK) will be pulling out of the EU procurement rules, so what will happen in England?

Well again, possibly not a lot for a while.  The UK is a signatory to the World Trade Organisation Government Procurement Agreement which underpins much of the EU procurement regulations.  Given that outside of the EU we will probably use the WTO in redeveloping our trading relationships with other countries, it is fairly unlikely that we shall pull out of that agreement (at least not quickly).

The WTO GPA sets in place a series of rules for procurement above a certain value or threshold, which is the same as the one in the EU regulations.  So thresholds and processes will remain in place, but might be amended.

There would be no ability to appeal to the European Court of Justice as EU procurement directives would not apply (unless that is part of our settlement in leaving).

Could we have a Buy British or Buy English campaign?  Probably not because it would clash with the WTO GPA, and anyhow could have negative consequences on Value for Money (if the foreign providers do not provide better VfM we would not contract with them).

Things like the European Single Procurement Document (ESPD) that came in in April 2016 but still has not actually surfaced, may change some time in the future.

So lots or uncertainty, but given that we need rules for public procurement to avoid corruption and to obtain value for Money, and that we are already signed up to rules for this, and that changing public procurement policy is unlikely to be top of the agenda for a post Brexit country, I think we shall only be seeing small changes for the next 5 years or so.  After that, who knows?  As they say, a week is a long time in politics - let alone 5 years.  In the meantime PCR 2015 stays in place.

So there is still a point in going to EU Procurement training (well, I would say that wouldn't I?)  as nothing is going to change for a few years.  After that, then I am sure we will have new public procurement training to clarify the new rules as and when they emerge.

Training course: Applying EU Procurement Processes, Manchester, 30th June 2016

This is the second of 2 single days from CIPS covering the fundamentals of Public sector procurement in the EU.  Which on that date we still will be, though we might not be some time later.  Whatever happens in the referendum though these regulations will be with us for the next few years.

It does help if you have attended the first of these days, but it is not essential - particularly if you have some experience. 

In this course we look in more detail at some of the less usual procurement processes, such as Innovation Partnerships, and flesh out a bit more of the surrounding requirements we outlined in day 1.

You can do both days in a row or spread them out to suit yourself.

Full details are here.

Hope to see you at one or the other - or even both.

Training Course: CIPS Introduction to Public Procurement, Manchester, 29th June 2016

This is the one day Introduction to Public Procurement, covering all the basics.  Venue is the Radisson Blu at Manchester airport which is fairly easy to get to (there is a bus station, train station and it is just off the motorway).

People have liked it so far, so hope to see you there.

Brexit and Public Procurement

I've been meaning to mention the impact of possible Brexit on Public Procurement, but just haven't had the time.  And it looks like Pinsent Masons have covered most of what I wanted to say - here linked on the excellent Spend Matters blog.

In short, if we stay nothing changes.  If we leave, nothing changes - at least not for quite a while.  And even then it might not.  We are signed up to the WTO Government Procurement Agreement, which is the basis of quite a lot of the EU Procurement directive, and therefore our procurement regulations.  Deciding what whether we would leave that agreement, and if so what we would change will probably not be top the the government's agenda post Brexit.

As Pinsent Masons have pointed out, rather than reducing bureaucracy the Government seems quite keen on adding things on top of the directive (with good intentions) so we might end up with more regulation rather than less.

Any how over the next 5 years, I would not expect to see a lot of change.  After that?  Who knows.

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.

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)

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.

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

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.

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.

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.