Tuesday, 29 October 2013

Relationships First: The new relationship paradigm in contracting - Book review/critique

This a very strange book or is it a manifesto? It argues that something new has been developed and applied, yet I see little new from what was discussed in the mid-1990s. Does it justify the subtitle 'The New Relationship Paradigm in Contracting'? Sorry, it doesn't.

It is printed double-spaced, why? The appearance creates the assumption that this was a MBA project re-shaped as a self-published book. If it is a repackaged MBA project the potential reader should have been warned prior to purchase.

Five chapters of the author talking about his experience before you get to an explanation of what the 'new' model is about - actually I can't see what the new model is.

Business school models are drawn on, for example, 5 Forces and 7 S's. Yes, this definitely has the feel of an MBA project. Now why was Peter Kraljic's seminal 1983 paper was missed - didn't it have the same message that strategic contracts need to focus on relationships?

Sunday, 27 October 2013

FoI for public sector contractors?

I have to say I was surprised today to hear of proposals that the Freedom of Information Act could be extended to embrace public sector contractors (quite possibility driven by a recommendation from the Social Enterprise UK ) .

I don't actually believe the rhetoric that such a move will force firms to compromise commercial secrets as, it strikes me, Section 43 of the Act already provides that protection. However, I do question how well thought through this potential policy is and what is likely to be the outcome?

Common sense suggests that since the Freedom of Information Act is now well embedded in the public sector it shouldn't be too hard to establish the potential value which would be delivered through the increased scope. For example, it would be useful to know how much cost has been added to the average public sector organisation answering FoI requests? It would also be comparatively easy to carry out some research with those who have made FoI requests to establish the real benefit gained? I have never actually made a FoI request but have had experience in responding. Responding to FoI requests consumes an enormous amount of time and there is a game of sanitisation taking place - a cottage industry has been created for bureaucrats. But equally many requests are just lazy, disguised market research at the expense of the public sector, it's information which isn't in the public interest but the costs are being shifted from the private sector to the public sector. Labour could place a FoI to get that information before pursuing the policy.

If the legislation is extended there will be an additional cost to private and third sector organisations just because they happen to be public sector contractors. There will then have to be some disaggregation of those organisation's work which is covered by FoI requests and which isn't. Those organisations being asked to respond to potential FoI requests will have to allow for that cost in their bids and that in turn will be passed to the public purse - those advocating the policy will need to budget for those costs. It may also be worth considering what the likely impact will be on mirco, small and medium enterprises?

However, if the issue is that the public sector isn't really on top of its contractors, then changes to specifications and contract  management may be more cost effective options.

Some months ago I discussed another Labour proposal, that of obliging all public sector contractors to pay the Living Wage. It strikes me that Labour can see public procurement is a useful political tool but I think it may be better to sit down with some sympathetic businesses and work out the most effective means as opposed to kite-flying.

Friday, 25 October 2013

'Free' in schools shouldn't be free of controls

A few weeks ago I discussed the allegations made in the press about al-Madinah free school - I questioned whether some of the allegations were justified. The allegations included conflicts of interest and lack of processes.

Then this week I discussed the increases in fraud and particularly in procurement. Tonight, we see a convergence of free schools and fraud. Fabricated invoices and money spent without supporting documentation. The latest allegations date back two years (apparently suppressed).

To me these problems all relate to Start-up and possibly naivety. There needs to be more attention given to getting procurement policies, processes and procedures in place together with the appropriate controls at Start-up. But perhaps it is unreasonable to assume that those who are setting up free schools will have the clarity of vision and even know-how to develop and put in place appropriate procurement policies, processes and procedures - that's why we seem to hear of problems after the event.

Now having said that, while Free Schools are the focus at the present, the same problems are surely just around the corner with Clinical Commissioning Groups.

Part of the solution lies in providing a really good start-up toolkit, training and support. Correct me if I'm wrong, but it doesn't look as if that support has/is being provided - if that's the case, it is a false economy and poor risk management.

Freedom may be a good thing but there needs to be protection against chaos. Sometimes even the free need to be protected from the pitfalls.

Thursday, 24 October 2013

Procurement reflections on Grangemouth negotiations

I'm sure, like me, you felt for the workers of Grangemouth who heard yesterday they were going to loose their jobs. Seemingly uncontrollable cost of living increases, Scottish winter fuel costs and Christmas only add to the real issue of whether or not there is any hope of future employment.

But what we are seeing is also high stakes negotiation. At face value we have the following buyers and sellers:
  1. Shareholders, who are indirectly buying workers;
  2. The workers, who bought union membership;
  3. The union, who sell union membership;
  4. The union, sell (broker) on behalf of their members;
  5. The workers, who sell their skills to the employer;
  6. Buyers throughout the country, who purchase fuel and plastics, used, for example, in the manufacture of cars and packaging;
  7. The UK government, who will incur additional financial and political costs if the workforce are unemployed or there are industry security of supply impacts.
However, what happened?

Wednesday, 23 October 2013

Procurement fraud is growing

Kroll's 2013/14 Global Fraud Report has just been published and it comes as no surprise that the greatest increase is in the world of procurement and conflicts of interest. 71% of companies in Europe have been affected by fraud. 19% have suffered vendor, supplier or procurement fraud - an increase of 7% from last year. We're talking about 1.4% of revenue slipping out of organisations.

Areas of interest to us also include outsourcing and offshoring which have increased the risk of fraud for 28% of respondents, and joint ventures and partnerships which have increased the risk of fraud for 20%.

It's only a few days ago Peter Smith drew our attention to Transparency International's report on UK Corruption in Local Government which also highlighted that procurement needs to be particularly vigilant throughout the procurement cycle given the dismantling of some of the former protection systems.

So what should you do?

  1. Recognise that your organisation is unlikely to be immune;
  2. Introduce a whistleblower culture (The TI report claimed whistleblowing had been more effective than audit, internal monitoring, or police investigations);
  3. Train staff and encourage them to ask questions;
  4. Put in place a strong governance system;
  5. Ensure no-one is outside the 'scope';
  6. Embed within procurement risk management;
  7. Ensure the correct polices, procedures, processes and controls are in place;
  8. Make use of eProcurement solutions;
  9. Apply due diligence to all aspects of the procurement cycle, particularly in selection of new partners and outsourcing;
  10. Create a cycle of learning from others and from past fraud attempts.

Monday, 21 October 2013

#CIPSLicence roulette with five cartridges loaded

Last week I discussed the proposed CIPSLicence and how I felt existing mechanisms should be used more effectively prior to being diverted into creating a new badge. If you read my blog you couldn't fail to have realised that I felt the strategy was flawed.

Today I read the Supply Management Supplement on Career Development - you can hopefully see CIPS logo in the top right section of the picture. Like most of the Supply Management Supplements I found this one an easy read and it raised some useful points. Yes, I liked the CPO interviews on '[Their] route to the top'. I also quite liked the tips on using LinkedIn - not rocket science but helpful for those who haven't yet realised LinkedIn can be really useful.

But I read the Supplement with #CIPSLicence tinted spectacles.

Now when I think of a strategy I always think in terms of mutually reinforcing actions and messages - there has to be internal consistency. So it came as quite a surprise to me, given the arguments put forward for the CIPSLicence, that CIPS have effectively endorsed a publication which flies in the face of the Licence Strategy. In the whole Supplement, so far as I can see, one message was missing, why bother with MCIPS never mind the #CIPSLicence. The CPO's held up as exemplars don't appear to be MCIPS and the 'Salaries in procurement' research didn't seem to give any credence to MCIPS.

As I argued last week, CIPSLicence strategy appears flawed. However, now I wonder, instead of a strategy, are CIPS playing russian roulette with five loaded cartridges?

Saturday, 19 October 2013

HS2 and risk of the cloak of invisibility

With all the questions raised so far about the business case for HS2, common sense would have said come clean as soon as possible. Those managing stakeholder engagement at HS2 just don't seem to recognise the need for clarity of the business case and effective stakeholder engagement.

The political and managerial leadership of HS2 may 'believe in' HS2 but they need to have clarity of the key messages and they need more integrity in communications.

Last night's Newsnight was yet another example of chaotic stakeholder engagement. Newsnight had clearly identified 'what hadn't been said' in the published KPMG report and had resorted to a Freedom of Information request for some answers. The FoI response provided a fuller story of the winners and losers. Then the HS2 CX fruitlessly tried to justify why Newsnight needed to resort to a FoI request.

Everyone knows there will be winners and losers with HS2, as with most business cases. The trouble comes when the emphasis is to 'accentuate the positive and eliminate the negative'. Stakeholders are rarely that gullible. Those who have most objections to change will always look for what is hidden and use that in their argument. I've been discussing these flaws in the HS2 approach for so long I'm sure some universities must now be using HS2 as an example of poor communications and stakeholder management. As this continues trust and confidence will be continue to be eroded and there's a risk that even those who will be winners will also start to become suspicious and cynical.

Thursday, 17 October 2013

Seller beware - public procurement challenges can be painful

The name of Jan Fletcher will, I suspect, go down in public procurement history. Not because she was an advisor to Vince Cable, not because she was formerly Yorkshire Business Woman of the Year, not because of her CBE for Services to Industry, not because she was listed as one of the Top 20 Entrepreneurs. No, Ms Fletcher could gain procurement fame as the woman who turned the tide of public procurement challenges.

Ms Fletcher has been ordered to pay Leeds City Council £2m as an interim payment after losing a public procurement challenge. She claimed the Council had deceived her in the procurement process, while back in February a judge concluded the Council has acted with "honesty and integrity".

Is this latest development a good thing? Well there are two sides to the coin. I think this should serve as a warning that public procurement isn't always wrong and will serve as a reminder that court cases can prove very costly. It is a good day for those in public procurement who are professional and perhaps feel they are unfairly criticised. However, apart from being a bad day for Ms Fletcher, it is a sad day if we start to see the David's of the selling world become too fearful of challenging the Goliath's of public procurement.

Wednesday, 16 October 2013

Putting out the fires of Conflicts of Interests myopia

Conflicts of Interest have become almost a weekly news story. It is an easy allegation to make and it appears that those most vulnerable to the allegation, both organisations and individuals, seem naive to its risks. The latest story is no different than so many, someone with a responsibility for buying had an interest in selling something similar - now why wasn't a perceived conflict of interests expected?

So while Peter Smith yesterday referred to big threats against 'useless public procurement people in Northern Ireland' there was a parallel story unfolding in the NI Fire Service where someone with responsibility for buying uniforms also had a business, surprise, surprise, selling uniforms.

It is not difficult to protect against claims of conflicts of interest and CPOs need to ensure that the appropriate protections and processes are in place. Perhaps the issue is naivety? If that's the case CPOs need to take on the role of a vigilante and also include conflicts of interest awareness raising within their communications strategy.  

Tuesday, 15 October 2013

#CIPSLicence strategy appears flawed

CIPS argue that procurement practitioners need to be licensed so as to "protect the public and our professionals ... and prevent disasters such as contamination of food in the supply chain and slavery in supply chains". Now that's a very bold claim and really amounts to nonsense; licencing procurement professionals could never prevent disasters such as food contamination or even slavery in supply chains and it would be impossible to produce any evidence to demonstrate that it could.

Before such a claim should be made CIPS need to provide evidence of the root causes of the food contamination debacle and the current slavery in supply chains, and whether or not any MCIPS/FCIPS have been involved. If any CIPS members have been involved we then need to understand what action CIPS took or propose to take under the CIPS Code of Ethics. If you already have a Code which should protect against such failures, fix the Code adherence as opposed to adding a new panacea. Of course, CIPS also need to have a reality check to establish what difference would a CIPS Licence have made - absolutely none I suspect.

Is CIPS commitment so deep that it will rescind any CIPS awards which have been made to any of the culpable organisations involved in these procurement scandals? Will CIPS remove from CIPS Corporate Certification any culpable organisation? Will CIPS remove MCIPS/FCIPS from any culpable members? Unless CIPS are prepared to use those existing tools then a Licence will fall short.

We then have the issue as to why CIPS have not been successful in ensuring MCIPS is the required standard for anyone in central government procurement

Monday, 14 October 2013

Have RIBA redesigned their procurement reforms?

One of the most amusing stories I've come across in a long time appeared in today's bdnoline.co.uk where we learn of what appears a hypocritical approach to procurement by the Royal Institute of British Architects (RIBA). RIBA are in the process of procuring an architect to design their new headquarters.

Now RIBA previously published some useful ideas on how reforming procurement could contribute to the economic recovery. Within their recommendations (#1.3.3) they advocate that PQQ's should be simplified, standardised and shortened. While in #3.2 they advocate enabling access for micro-businesses and SMEs and ensuring greater proportionality in their treatment, including in #3.2.4 ensuring financial standing criteria are appropriate to the project and the contract. Just to be clear, RIBA advocate "... turnover requirement should be capped so that the maximum level is ascertained from a fair comparison between the annual fee turnover and what might be earned annually from a project over its duration".

Not only have RIBA now issued an 18 page PQQ but they have set a turnover qualifier of twice the fee averaged over the last three years.

All good procurement professionals know that setting a turnover requirement of three years accounts means young practices just can't compete. Having a turnover requirement of twice the contract value is also restrictive. I wonder how many of the practices RIBA represent feel let down by their own Institute? I wonder have RIBA decided they are unhappy taking the risk for following their own guidance? I wonder have RIBA joined the architectural school of 'do as I say, not as I do'?

Sunday, 13 October 2013

Can there be smoke without a fire in procurement?

al-Madinah, the UK's first Muslim free school, has been under scrutiny quite a bit this week and today the spotlight is being shone on its procurement. Now there are quite a few things about al-Madinah I would fundamentally disagree with but that shouldn't mean I swiftly place them on the 'naughty seat'. However, when I see headlines in the Sunday Times of "Gove inquiry queries ... school's tendering" I'm interested in finding out more.

Duplicate payments are not something which only al-Madinah have suffered from. Sometimes duplicate payments are made due to system failures. However, good controls and processes should be in place to manage this risk. Were the controls in place? Was this a deliberate fraudulent act which found a way of circumnavigating the controls? Sadly, we're not told so this may be smoke without a procurement fire.

Perceived conflicts of interest are also something we have discussed, particularly in the context of the new Clinical Commissioning Groups. When new structures are established sometimes the well-intentioned need to be protected from their ignorance of how things might look. It appears that al-Madinah did give some thought to potential conflicts of interest and those who had the links were excluded from the contract awards. As I have said before, undue influence over contract awards can be exercised in more discrete ways that merely contract awards, but in this particular news story there is no evidence of undue influence. This may be smoke without a procurement fire.

Finally, we learn that one of al-Madinah's committee chairs is also the director of a firm which supplies services to the school. Yet, we are led to believe that contract was awarded prior to his appointment as a governor. I personally can't see any reason why someone could see that is being suspect. Volunteering as a school governor is surely something to be encourages not a cause for suspicion. This too may be smoke without a fire in procurement.

So what is the story all about? Is there smoke without a fire in al-Madinah's procurement? Actually I think it is perfectly acceptable to query a school's tendering but that doesn't mean there is something wrong. However, why on earth has The Sunday Times chosen to give a headline which leads you to think there is something untoward with a school's procurement without any substantive evidence to back it up? Have I missed something?

There are clear lessons though in this 'story'. Firstly, the need to put in place proper processes and controls which reduce the risk of duplicate payments. Secondly, the need to be conscious of the potential claims of conflicts of interest and to not only be clean, but to be seen to be beyond any doubt.

Thursday, 10 October 2013

MCIPS or MFibs

I have discussed 'fakes' before and the need to be cautious on taking 'experts' at face value, but what about this wonderful list of achievements on a CV - none of which were true:

  • LLB (Hons)(First Class) University of East Anglia;
  • Bachelor of Arts (First Class) Balliol College, Oxford University;
  • Bachelor of Civil Laws (First Class) Balliol, Oxford University;
  • Doctor of Philosophy, Balliol College, Oxford University;
  • Master's degree, Faculty of Law, Harvard University.
It also appears even more bizarre that some of this celebrity's colleagues wondered why his lies hadn't been uncovered sooner. Yet, were his former colleagues not in the business of exposing liars and fakes?  Given the dominance of Oxford Uni in this fake's CV do you really need a Morse or Lewis to expose the truth?   

I had originally thought of blogging on this just for completeness of my previous discussions on 'fakes'. Then I thought about our own profession and wondered how easy it would be to verify whether or not someone was either FCIPS or MCIPS when either selecting a new member of staff, an interim, or indeed a consultant. Given that many of us have invested a reasonable amount of effort and money, I'm sure you'll be pleased to learn that there's a free online public search facility of CIPS membership - so hat's off to CIPS for that one, I guess I should keep paying my membership fee! 

Disruptive procurement - lessons from Azerbaijan election

I don't think I've never discussed Azerbaijan before and certainly never their Presidential election. Today justifies a change as there are lessons for procurement from the announcement of the re-election of Ilham Aliyev as President.

Firstly, we have the announcement of the results a day before the actual voting took place. Secondly, we had the allegation that fake candidates were included so as to confuse the electorate.

I'm sure you've had similar experiences to me: someone makes the grand statement that no one else can provide what they need or that no one else can beat that price. Effectively they've announced the result before the competition has even started - they've 'done an Azerbaijan! The funny thing is that whenever you disrupt their thinking, and introduce other potential providers, there seems to be a lack of loyalty to the earlier preference - does the specifier feel betrayed by the earlier preference? I think physiologists refer to that as cognitive dissonance. Regardless, to me, one of the key roles of CPOs is to get in and disrupt the 'foregone conclusion' - we need disruptive procurement.

Then we have the lesson of the fake candidates. Yes, we've all come across a list of potential alternative providers, some of whom haven't the capacity to take on the work, others don't have the capability and some are known to be significantly more expensive. This creates a veneer of going to the market when in reality it is nothing more than a sham - they've dome an Azerbaijan! Some years ago I introduced a system which enabled me to open the door to potential new suppliers by insisting that every time a new RFP was sought, a new supplier had also to be invited. The result was an opening of the market and better deals. To me that's another form of disruptive procurement.

Yesterday, I discuss the absence of challenge in business cases. That provides another example of where disruptive procurement could be effective. Had Procurement been involved earlier, 'disturbing the waters', so much reputational damage could have been avoided and money more effectively spent.

To be disruptive does not mean being aggressive. It requires winning 'hearts and minds' - it requires influencing skills not policeman skills. It also requires being involved right throughout the procurement cycle, from defining the problem which has to be solved.

Wednesday, 9 October 2013

Were a lack of controls the problem with e-Borders contract?

Two of the recurring themes I discuss are the need for a robust business case and external scrutiny. Yet, somehow I never cease to be surprised when another failure to address both comes along - today's report on e-Borders by the Independent Chief Inspector of Borders and Immigration provides the latest example.

As best I can understand it, there was a flaw in the business case failing to recognise the risks of incompatibility the EU rules. That meant the targets set for the contract with the IT supplier couldn't be met, and as a result of the supplier not being able to achieve the targets the contract was terminated. This was a £500m initiative how could they have got it so wrong? The Inspector has a lot more to say but that's sufficient for our purposes.

Too often it appears business cases are constructed to support 'a good idea' and lack robustness. Business cases have to be more cynical and adopt a more risk based approach. But those charged with constructing the business case are more often than not those who have a vested interest in the project going forward - it is not CV enhancing to say 'stop this madness now'. However, in the e-Borders example it looks as though the 'Home Office' failed to have an awareness of the external EU environment - how could that have happened?

One of the purposes of the Gateway Review process was to bring external scrutiny to projects through the eyes of  'critical friends'. The biggest failure of this initiative, too me, wasn't the failure to recognise the impact of the EU rules, but the failure of the external scrutiny to ask about the external environment and how those rules could impact on the proposals.

So, core lessons:
  1. Be more cynical in the development of business cases - they should be more robust;
  2. Assume that those producing the business case will benefit from external challenge and make sure that challenge is robust;
  3. Recognise that business cases are about risk management.
So what's all this got to do with procurement? We a contract was entered into based on a flawed business case and that contract had to be terminated because the performance levels were unachievable. Had Procurement professional had a role in challenging the business case some of those weaknesses may have been averted. Had Procurement been able to challenge the performance standards being set for the contractor, more realistic standards may have been set and no doubt that would have been reflected in a lower contract price. Had Procurement involved the market in the discussions about the business case, the market may have highlighted the risk related to EU rules. If only ... the Inspector may have been praising a good procurement as opposed to the newspapers reporting a £500m waste of money

Tuesday, 8 October 2013

The Undercover Economist Strikes Back (Book review)

I'm a great far of Tim Hartford and his skill for making economics real and relevant to the man-in-the-street. I also thought Adapt, his previous book, was a 'must read'.

So I purchased this book as soon as it was published and looked forward to an excellent read. Unlike his other books this one is concerned with macroeconomics, something which I think virtually every foundation business studies course must cover in some way. Perhaps the book is targeted at that readership, and if that is the case, it is an excellent introductory text. It would also be ideal for anyone trying to get behind the jargon of current news stories.

However, the book just didn't work for me. It is comprehensive and Hartford, as usual, manages to demystify some big issues. But I found the style of writing irritating - it takes the form of an imaginary character conversing with Hartford and posing questions which he answers. That may appeal to some but I hope Hartford drops that approach.

'Adapt' was an excellent book and I could visualise myself reading it again. That's not an accolade I think 'The Undercover Economist Strikes Back' shares. Nevertheless, given Hartford's previous excellent track record as an author, I still expect to buy his next book.

PS I noticed that it's available as an airport edition at a significantly reduced price - so if you're travelling soon you could pick up lower price version on your travels.

Sunday, 6 October 2013

Time to take a stand on UK slavery in supply chain management

This weeks cover story of the Sunday Times Magazine heaps more shame on retail supply chain management and the suggestion that UK supermarkets are best of bred. 

I've frequently discussed the issues of supply chain management and even advocated that we need 'undercover supply chain managers'. Horsemeat and pork of poor providence, foreign factories with unacceptable health and safety, and poor working conditions - we've discussed them all even though the Public Administration Select Committee were led to believe retail procurement is an exemplar.  

But there has to be something seriously wrong when the Sunday Times Magazine appears able to expose appalling supply chain behaviour of UK supermarkets. What we learn on pages 22-27 of the Magazine and also in the main paper is that some UK supermarkets pursuit of 'value' means slave workers, on 17-hour days, suffering beatings and sexual abuse, living in squalor, for £2.80 per day. That's a very perverse view of responsible procurement. A very perverse view of supply chain management. A very strange view of contract management. Yet these modern day slaves are not in some far flung outpost, they are working in the UK and part of the supply chains to us.

The Home Secretary plans to introduce an anti-slavery bill and Chris Byrant MP, the shadow immigration minister hopes to introduce a Transparency in Supply Chains bill. The Sunday Times has announced it is fronting a Britain's Secret Slaves campaign. The supermarkets can be expected to hold up their hands and tell us through a spate of full-page advertisements it will be address the issues after once again being exposed for poor supply chain management - but clearly the claims of learning the lessons of the past ring hollow now. 

Yet there is one voice which seems silent on these issues, CIPS. We love the glory which comes from the Purchasing Manager's Index being regularly being cited as an economic indicator - but where is CIPS actually taking a stand on retail supply chain management?  If CIPS don't take hold of this very quickly the whole profession risks being discredited.

Saturday, 5 October 2013

Not taking note-taking seriously in procurement

I find the John McCririck case most bizarre - a man who appeared to take great satisfaction at being offensive, wondering why he may no longer be an acceptable payroll cost for Channel 4. Anyway that's not the point and has only marginal relevance to procurement. No, the interesting lesson is how Ms Jay Hunt, who was seeking to defend McCririck's sacking, has found herself criticised for note-taking, or should I say, not taking note-taking seriously.

Here's what the QC said to Hunt:
There are two possibilities. Either you are displaying breathtaking arrogance by thinking that you didn't have to have a written record of the decision regarding Mr McCririck, or you are seeking to provide reasons to this tribunal that were not before you at the time.
You could certainly recast that statement into many procurement decisions. Indeed, it was only a few weeks ago we discussed the Serious Fraud Office's inadequate minutes.

I personally find trying to take notes a terrible distraction from absorbing what is actually being said, so a minute taker is very useful. It is also important to make notes immediately after a meeting and ensure some sort of validation takes place. Clearly, in the McCririck case, Ms Hunt, didn't make adequate notes and the implication was that she was revising her account. It has the ring of those great statements by US officials, trying to emulate Houdini, uttering, "I have no recollection".

Friday, 4 October 2013

Some dosh, some dosh, my design for some dosh

In 1485 Richard III died in battle. His remains were recently found underneath a carpark and there's an argument still taking place as to where he should have his final, more fitting, resting place. This is the King linked to the conspiracy theory that he was responsible for the mysterious deaths of ‘The Princes in the Tower’ - the children of 'The White Queen' (remember the recent TV series). He was also a Shakespearian character. So it is perhaps fitting the the drama continues, but can procurement learn from this latest act?

The Richard III saga has now turned into a hostage crisis as a potential contributor to the cost of his burial now threatens to withdraw their offer of funding, if they don't get their way in the design of the tomb. Now Cathedrals can be accepted as knowing a bit about design (most medieval Cathedrals remain iconic today), so you'd have thought Rich's mates would have concluded: "let's just go with the flow". Not so.

The Richard III Society had offered to contribute £40,000 to the cost of the £1.3m tomb in Leicester Cathedral The Cathedral hadn't budgeted for the funding from the Society. So, to a certain extent, the Cathedral gang appear happy to say "keep your dosh".

This has wider implications for procurement strategy

Tuesday, 1 October 2013

Procurement needs to be concerned with planning permission risk

I have written before about the need to ensure that all relevant planning permissions are in place prior to signing a contract on which gaining planning approval is a dependency. Ironically we learn of yet another waste contract potentially wasting money as commercial agreements appear to have been signed prior to the appropriate planning conditions having been complied with.

So while the formalities of procurement seem to have rushed ahead, the dependent approval processes doesn't appear to have achieved the necessary signed-off. This failure in choreography could now prove costly and embarrassing. A judicial review will now establish what happens next but the key lesson, once again, is don't commit to commercial contracts unless you know you can progress to delivery. Contracts are expensive to exit prior to running their natural term. I am not remotely qualified to provide a legal opinion, but it does appear that those concerned should either have delayed signing, or alternatively included a 'get out of jail free' break clause which would have covered such an eventuality. Either of those routes may have helped but that assume someone would have completed a risk assessment and viewed those as risk mitigation - it looks unlikely that happened too.