Can you find Dr Gordy

Can you find Dr Gordy
Somewhere in this picture is Dr Gordy - can you find him?

Wednesday, 10 August 2016

Procurement risk management & power at Labour Party HQ

You may recall I discussed the UK Government's Guidance Note on Procurement Boycotts some time ago - at that time I was cynical about it's impact. However, Procurement Boycott's hit the news again today - this time the decision of the Labour Party to Boycott that 'procurement old faithful' G4S.

It seems the Labour Party Conference now has a risk of being cancelled as there may not be a contractor in place to provide the required security cover. G4S' contract was cancelled due to their links with Israeli prisons. Attempts at getting others to bid have so far failed.

This is one of those examples which demonstrates so much of procurement risk management. Firstly, it was probably perceived as a Routine contract as opposed to a Bottleneck 'show stopper'. Secondly, it demonstrates the need to recognise power and dependency - Labour probably but wrongly assumed, like so many, that security contractors would love to compete for their work.  Thirdly, it demonstrates that putting in a Procurement Policy without considering its full implications may result in having to rip up the policy.  Finally, it demonstrates the need for supplier engagement when introducing 'new ways of working'.

Procurement Policy may just have moved up the agenda of the Labour Party - it certainly looks as though someone is going to have to shift.

Saturday, 30 July 2016

Nuclear fallout in procurement award process

Forget the Hinkley Point procurement process for a minute and let's reflect on the procurement process for the £7bn decommissioning of the UK's first generation of nuclear power plants - yes, they got it wrong!  Well at least that was the judgement of Mr Juctice Fraser at the High Court; now the Nuclear Decommissioning Authority "are considering [their] legal options".

So what went wrong?
  1. A bidder, which should have been excluded from the process due to omissions in its submission, was allowed to progress to the next stage;
  2. Bidders were not treated on equal terms - allegedly one tenderer was disadvantaged in the scoring;
  3. "Experts" evaluating the submissions manipulated their calculations to arrive at their preferred outcome; 
  4. The wrong consortium were awarded the contract.
All fairly basic breaches of procurement good practice and yet potentially this would have gone unnoticed had one consortium not challenged the award.  

Were no concerns expressed by the evaluation team? Were there no whistle-blowers? Was this just incompetence or perhaps something more sinister? 

Let's remember that the wrongful award appears to have had a significant detrimental impact on the wronged bidder. There will now be compensation costs and possibly significant delays to completion of the work which needed to be completed. And of course, significant reputational damage to the Nuclear Decommissioning Authority and its procurement advisors. Not a good CV entry and not a good look for the profession.

Massive amounts of money being spent are no excuse for not getting the basics right.

Thursday, 14 July 2016

Black Box Thinking - book review

How many times have you heard it said "lessons will be learnt" - the mantra often used instead of just saying "sorry, we got it wrong", yet rarely seems to result in any action.  Syed's remarkable book truly addresses, through many examples, the need to learn from when things go wrong.  Syed provides fascinating insights into how different professions tend to address failures, on the positive side, learning and improving, while on the negative side, denial and cover-up. I find myself contrasting this with excuses.

The key message is that if we want to drive improvement and innovations we need be more honest and critical of failures.  We need to understand what happened and what needs to be done differently based on that learning.

Some of the case studies are nothing short of scandalous and yet, I suspect few professionals are entirely innocent. Particularly eye-opening is the example relating to latex gloves and the bravery of the anestistist in challenging the surgeon. The book is also a call for bravery and the need to intervene when it is clear to you a mistake is being made. I will not spoil the book by saying more.

For procurement professionals this critical reflection could address why a key stakeholder didn't seem to welcome your advice, whether a negotiation could have delivered a better outcome, whether the sourcing strategy was optimal, and even if the last interview.  Within the profession we talk a lot about innovation - to me this is a practical book on making innovation happen.

I found the book really easy to read, excellent for the holidays and really thought provoking - it will not be going to the charity shop but added to my 'must keep and re-read'.  I recommend.


Tuesday, 28 June 2016

Thoughts on Leadership - politics, football and procurement

The UK appears to be in meltdown. The Prime Minister has resigned primarily as a result of not being able to bring the UK, as a whole, with him on the Referendum. Now the Conservative Party are engaged in their own nomination process for a leader, to not only replace Cameron, but also to lead negotiations which will bring about an exit (perhaps) from the EU and at the same time unify a very divided country.

Meanwhile in the Brexit fallout, the Labour Party Leader, Jeremy Corbyn, is at odds with his fellow MPs - his Shadow Cabinet have resigned en masse and he faces a vote of no-confidence today which is likely to force a Labour leadership election. Corbyn has stated his intention to be a contender in that election, and, it may well be that the Labour party electorate will return him in spite of the Parliamentary Party.

So between the Conservative and Labour party disarray we can expect a leadership vacuum for the foreseeable future.  

At times like these one may have hoped for some sort of solace in the European Football Championships.  Anyone watching English fans leave the stadium last night, the forlorn look of the players at the end of the match and listening to the dissection of the game by the commentators would be forgiven for thinking how can it get worse.  The team manager Roy Hodgson promptly resigned. I wouldn't know if Roy Hodgson had been a good leader or not - it seems hard to question his credentials in reaching the pinnacle of his profession.

The last week clearly has lessons to be learnt on leadership. But then again I had previously discussed some lessons on procurement leadership resulting from the Harmeston (ex-Coop CPO) case.

One thought in my mind is that leaders do not always have to win to be viewed as successful. Take, for example, the experience of both Northern Ireland and the Republic of Ireland football teams in the Euros, both of whom exited the Euros at the same stage as England. Yet, Northern Ireland and Republic of Ireland fans are in triumphant mood, proud of their achievements. There's is a celebration of leadership. Those leaders instilled a belief of what 'could be' achieved as a opposed to 'would be' - they didn't over promise, exaggerate or understate the scale of the task ahead. Yet they brought people with them - it strikes me that today's leaders, whether in politics, football, or procurement success can only be measured by their ability to win the confidence of those being led and trust that they can deliver the vision.

Friday, 24 June 2016

When BREXIT becomes a reality for procurement

On the 24 April I Tweeted "What will life be like if the result of the Brexit referendum is 51% either way?".  The Referendum result is now known with just under 52% voting for a UK exit from the EU - hardly decisive, yet, it certainly looks as if the claims of the Brexiteers will now be tested. It is noteworthy though that just under 56% of those in Northern Ireland and 62% of Scots voted to remain - so we have a nation divided as well as nations divided!

Already the UK Prime Minister has handed in his notice but even in the remaining three months of his tenure he will wield little influence, after all he brought the Referendum on the UK and has failed to bring even his mates with him. His succession plan also seems to have been ripped up as Osborne also called this one wrong. Who should the EU negotiate with?

In March 2015 I advocated in Public Money and Management "that those working in public procurement policy and practice would do well to consider the 'what if' scenario if the threatened exits from the EU materialise as there would be significant repercussions ... and risk assess the implications for practice". I would be surprised but impressed if we had sight of those 'working papers'. 

But it is not only those in public sector procurement who should have been risk managing a potential exit result - in my opinion every CPO should have drafted a high-level strategy based on the vote going either way. Now those strategies need to be refreshed and risk managed on the potential speed of the exit.

Those who claimed the UK was shackled by the EU procurement rules need to start to articulate clearly what they want to have replaced and what the To-Be will look like. Then there's the range of other EU legislation which had a bearing on UK procurement - it would be useful if a comprehensive list of the existing legislation was prepared and the dialogue started on which should remain in the longer term and which should be either revised to dumped. Of course that which will be suggested for the bin will need to be risk assessed too.

I suspect for many years we will have Cameron's strategy analysed as a case study - should he have initially yielded to the self-inflicted pressure for a Referendum? Should he have negotiated a better deal with the EU as opposed to claiming success? What was wrong with his communications plan?

I also suspect there will be winners and losers in the procurement world, those who manage Brexit well will shine, those who don't may aswell pick up their coats now.

Friday, 10 June 2016

Were procurement voices heard at Bristol's European Green Capital?

I'm sure it will have escaped many of you that Bristol was the European Green Capital in 2015. The Times have just revelled some of the £12m of procurement's involved:
  • £37,000 wiring a tree with a sound and light system activated by falling beechnuts, only to discover that it was predictably going to be a lean year for beechnuts; 
  • £49,200 creating an artificial fog over footbridge;
  • £84,000 for life size wicker sculpture of whales;
  • £5,000 for a guest speaker;
  • £3,800 for pies provided to guests at a launch party;
  • £25,00 for a 'happy cities' survey;
  • £6,000 for a circus group;
  • £18,000 for use of 'Shaun the sheep' image on promotional materials;
  • £1,000 a month for a press-cuttings service.
Now let's assume that proper procurement policies were in place and processes complied with - although we know that often 'arms length' bodies feel they are beyond that.  Let's also assume that there was some benchmarking to ensure that the various deals represented good value for money.

The previous Mayor of Bristol claims the year was a "massive success". Unsurprisingly, others don't agree but is that criticism justified? There must have been a strategy for the year and that should have drilled down to the various event components - those responsible for governance had a responsibility to ensure that was scrutinised and justified and not just 'rubber stamped'. It would have been good if that plan had been published and consulted upon as that would have deflected some of the later criticisms.

It would also have been good if the initiative were subjected to an independent outcome assessment - that would have demonstrated the economic and environmental benefits gained - the ratio of cost to benefits.

As with so many of these types of initiatives money was pooled from various big funders: £1m from the City Council to pump-prime, and that brought a further £7m from the government £3m-£4m from the private sector.  I actually know nothing about the governance structure which was put in place, but to me, Bristol City Council probably came out on top. However, I would like to have seen a pro-rata allocation of influence at the governance table based on the funding provided - those funders had real 'skin in the game' and needed to be clear these were procurements they had confidence in as opposed to rubber stamping, of worse, giving without control. I wonder how many procurement voices were heard at that table?

Friday, 3 June 2016

A new twist on Make/Buy for the NHS - how to avoid the latest drugs rip-off?

I was very late getting to today's Times but when I did get round to reading it I was fascinated to find a procurement story dominating the news: "'Extortionate' prices add £260m to the NHS drug bill". I won't try to explain the whole story but in a nutshell it appears there's a loophole in the NHS purchasing policy which has created a 'get rich quick' opening for a few entrepreneurs.  The opportunity is linked with the selling of patents which are bought from the big pharmaceuticals by comparatively small, clever,  opportunistic entrepreneurs, who are then able to harvest excessive profits from the NHS, etc.  For example, here's one price trend provided by The Times:
For more than five years the NHS in England paid pharmacists £3.77 for a 28-pack 25mg tablets and £5.71 for a packet of 50mg tablets. In July 2014, under [one of the firms using the strategy], the price suddenly increased to £24 and £48 a packet respectively. Eight months later both prices doubled. Eight months after that, last November, they almost doubled again, this time rising to £97 fro a 25mg pack and £154 for a 50mg packet.
The Times suggest that this, perfectly legal practice, is costing the NHS an extra £262m a year for over 50 drugs! When NHS budgets have been unsustainable for a few years it seems odd that the Times uncovered this as opposed to the NHS - what's been happening there with benchmarking prices, procurement strategy and category management?

Now, it would be easy to throw stones at the NHS but I wondered what I would recommend if I was involved in NHS procurement. Of course I have no inside knowledge of what is actually going on but I think I would start with:

  1. Exploring why such price increases have been justified and accepted?
  2. Clarifying why the market isn't working effectively?
  3. Ensuring prescribers only name the drugs in question when absolutely no other alternative is available - pharmacists will have a part to play here? 
  4. Exploring the feasibility of a new model of patenting, and agreement to purchase, with the major pharmaceuticals which ensured that the NHS had first refusal on a transfer of some patents?
  5. Establishing why the NHS, WHO or even the EU couldn't intervene and take on role which the entrepreneurs have - clearly the business case evidence is there?
It does strike me this is another variation of the make/buy decision.  Yes, I appreciate that what I'm suggesting may well be contrary to the prevailing political philosophy but when the money is running out of the NHS 'piggy-bank' surely all options need to be explored.