Deloitte and Prime Minister Theresa May

I spat my coffee out when I read that Deloitte decided not to bid for UK government contracts because PM May was angry with them about a leaked document concerning Brexit.

Note that this was a "voluntary" decision by Deloitte - see Guardian here. There was not official sanction for Deloitte for the link, and is in no way linked to Deloitte's performance on current contracts.  For Deloitte this is a commercial decision to appease a politician in the hopes of currying favour.

This is a very slippery slope.  If the public procurement process can be used by politicians to influence contract award, we are well on the way to corruption and influence peddling.  It may be "accepted practice" for businesses who have upset a minister to "voluntarily" suspend bidding.  This corrupts the fairness, openness and transparency required in public procurement.  If only friends of the government bid we are all losers.

I was pleased to see that Pedro Telles of the excellent www.telles.eu  thinks the same (and said it much earlier than me).  And in the interests of political balance he also points out that Jeremy Corbyn's comments on using Public Procurement to influence the pay structure of suppliers is equally preposterous. and would break the WTO Public Procurement Agreement.

Again, it cannot be said enough: If politicians interfere in the public procurement process we are opening the door to corruption, and the losers will be the public.

This is not the same as saying that Public Procurement cannot be used as an instrument of policy - for example to promotes SMEs and apprenticeships.  But once politicians start saying who can and cannot win contracts we are in banana republic territory.

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.