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Homepage / Playing the Procurement Game – why rigid procurement rules increase risk!

Playing the Procurement Game – why rigid procurement rules increase risk!

26/10/2017

As a supplier to the public and private sector there appear to be some significant idiosyncrasies associated with public sector procurement! No this is not a long list of frustrations experienced by private sector companies in supplying the public sector – that list would significantly exceed the space available for this blog! This blog simply serves to highlight how rules around procurement that were designed, presumably to protect the procuring organisation against risk, have, in our observations significantly increased risk! And is there a better way?
 
Let’s look at some examples from our own experience:
·   A year ago, we were asked by a large Government department to come in and explore how we could help them with a major issue facing the UK. We were recommended because of work we had previously done in another part of the same department – so our credentials were high. We presented our solution and demonstrated our underlying software to senior executives in the department and followed up with a proposal that was well received. We met again and ran through our approach in detail which was well received just before Xmas last year. We then met in early Spring for what seemed like a pre-project kick-off meeting pending receipt of a Purchase Order. Then were informed there would be a slight delay as procurement rules needed to be followed. Today, we still have no order, nor any project and the department has been regularly in the News slated for not having proper performance measurement in place as well as their inability to tackle the critical problems around its core raison d’etre. The procurement process could not be explained to us. It was opaque and impenetrable to the senior level advocates of our project. Result – risk to this department is now significantly higher than a year ago.
·   On multiple occasions, we are asked to respond to procurement tenders which have a specific requirement and specified delivery timetable. It always astounds me that, unless that organisation already knows what suppliers can do in detail, this procurement process can be seen as risk mitigating. Procuring a solution for £100,000’s based on a supplier answering a small number of questions in a tender document followed by a 1 hour presentation and expecting a satisfactory outcome – it seems fraught with risk if you ask me.
·   But for these organisations to learn what suppliers offer can be excruciatingly difficult – with their procurement departments telling them they cannot engage with suppliers to do (even free of charge) proof of concept work to find out whether their offering suits the organisation’s requirements. This being to mitigate the risk of cries of “foul play” by other suppliers. How can they ever find out what is the art of the possible?
 
Seems to me a better way would be for these public sector organisations to have a simple, clear published procurement process. We have worked with private sector companies with clear end-to-end processes including Procure to Pay (P2P) (or more  all-encompassing Source to Pay (S2P) which would include selection of suppliers) who engage with suppliers to establish capability and trust before entering a tender process. Without this, it’s pretty clear we will continually be seeing and reading about private sector companies failing to deliver programmes and projects on-time and to-budget and in-full to the public sector!
 
For which a lot of people will blame “private sector sales”.

Written By: David Anker

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Categories: Centre for Business Performance|

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