Friday, 24 June 2016

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.

Monday, 13 June 2016

P4H - 13th July 2016 Birmingham NEC

I shall be presenting the Supplier Training Zone at P4H, the leading Procurement event supporting Operational productivity in the NHS run by BIP Solutions.  Which is a bit of a mouthful, but does describe what it is about.

It is free to the Public Sector, and £95 for private sector - but hopefully the training sessions alone compensate for that (not necessarily mine, of course - there are 3 other training zones as well).  The sessions I am running are not only applicable to the NHS, so there would be value in popping along if you supply other Public sector bodies too.

Hope to see you there.

Thursday, 9 June 2016

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.

Wednesday, 8 June 2016

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.

Tuesday, 7 June 2016

IChemE What Engineers need to know about contracts 21/22 June 2016

I shall be running this course in London - full details are here.

This does not go into the full details of the different IChemE forms of contract - that is a different course, but does give an introduction to contracts for Engineers and others who require an overview.

Hope to see you there.

Monday, 6 June 2016

Which savings? How do we prioritise?

Last week I was in Germany, working for a multi-national engineering manufacturing company.  Great place and great people.  The Procurement Manager took us out to dinner, and I took the opportunity to ask him what his major problems were.  He took a few seconds to think (a sensible man), and then described his situation.

All the business units have to make savings - everyone is clear about that (although margins and profits are up across the board).  However he is locked into his approach.  Effectively there is a triple lock;
1. Price reductions
2. Working capital reductions
3. Zero inflation.

All laudable goals, but of course the interaction of them leaves him very little room to manoeuvre with suppliers.  A contractor cannot be award for good performance on a 3 year contract with a say 0.5% increase, regardless of the changes in their input costs.  Higher stock levels and fewer deliveries or longer lead times cannot be used to incentivise the agreement.

To make things even worse, the product mix is highly variable and unpredictable and sales are not located on site.  So if they sell in the EU working capital can go down when the manufactured item is invoiced to the customer.  If the customer is in China and terms are DDP, then it will only leave stock (accounts) 5 weeks after it has been dispatched from the factory when it arrives at the customer.  The procurement department has no input to that, but of course has to deal with the WIP issues.


So the Manager has to achieve all of his targets both individually and collectively, and there can be no trade off.  He was very unhappy when I raised the sort of tricks that business managers often use to make those targets - he is going to do it properly.  I am sure he will, but it is a situation where a little more flexibility might actually help achieve the overall targets.  In particular I worry that Quality is at risk if they have to switch to new suppliers rather than stay with established ones simply in order to gain lower prices.

Sunday, 5 June 2016

For me, the Referendum is over...

I've voted.  Postal vote means an early vote.
I was always quite clear on my position, and I can't imagine it changing any time before the referendum.
Whichever way you vote, I hope that you do.

But for me, now I just have to wait for the result.