Thursday, 18 February 2016

Impact of 'no procurement boycotts' Guidance Note?

The UK Government has now published the much anticipated and trumpeted guidance on procurement boycotts. Yes, it's one of those documents all public bodies will now have to risk access.  Time will tell whether it will also be cascaded to those 3rd sector organisations who receive public money, say through Lottery funding?

It's a Policy Guidance Note, so you may well find yourself asking your legal advisors: "what if I decide to ignore the Guidance?" or, getting into the detail, "Does this only apply 'above the threshold'?" - actually I understood that the Principles of the EU applied regardless of the threshold anyway.

Of course all these initiatives are dependent on whether those who view themselves as being 'victims' have the appetite to pursue a case through the courts.  Surely, anyone who has considered themselves wrongfully discriminated against in a procurement process during the boycotts up to now would have already taken a case - nothing has changed as this is only Guidance.

Regardless of all that, it may have been interesting to establish what the actual impact of the boycotts to date have been, for example, has a procurement decision actually been different in terms of its award outcome? If there was no change in a real life procurement decisions, then the boycotts could only have had 'political impact' in raising awareness of the issues - something which the anticipation and implementation of the new Guidance has paradoxically probably been more effective in doing.

Anyway, here's the key statement from the Guidance for anyone who has a interest in political procurement:
Public procurement should never be used as a tool to boycott tenders from suppliers based in other countries, except where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government. There are wider national and international consequences from imposing such local level boycotts. They can damage integration and community cohesion within the United Kingdom, hinder Britain’s export trade, and harm foreign relations to the detriment of Britain’s economic and international security. As highlighted earlier, it can also be unlawful and lead to severe penalties against the contracting authority and the Government. 
I suppose you could also interpret this loosely as: "Public procurement can be used as a tool to boycott tenders from suppliers based in other countries if the UK Government decides it wants to, but that choice cannot be devolved to any lower level of government".  

Wednesday, 17 February 2016

CIPS Cyber Security for Procurement Professionals - a useful eLearning tool.

I have just become aware that CIPS released a free eLearning course 'Cyber Security for Procurement Professionals'  which was developed with the UK Government.

There are six modules and it is available free of charge regardless of whether or not you are a CIPS member.  The suggested time for completing the eLearning is 75' but you will need longer if you follow the various links.

To me the real value is in Module 3; the others are pretty generic cyber security awareness raising, while Model 3 provides really useful specific advice on what the procurement professional should do, for example, including the need for certifications in bids.  I think it also implies the need to give some thought to the implications of cyber security within S2P processes.

On the downside, there is some infuriating background music - turn it off. The 'Knowledge Check' questions are the end of each module are so basic they are of questionable value. Disappointingly, I found when I followed some of the early document links I ended up having to completely restart the tool as opposed to picking up where I left off.

Nevertheless, I think this is a useful CIPS offer and would recommend it be included as a 'must do annually'.  I wonder why it is not behind CIPS member only firewall?

Saturday, 13 February 2016

Junior Doctors, the EU Referendum and procurement change management lessons

I honestly don't know who is right in the current NHS change management crisis with the Junior Doctors. Imposing the new contracts can only be viewed as a failure but it is also a symptom of the bigger failure of change management or mis-management. I suppose there are questions as to whether imposing contracts is even legal; like many of you, I have been the victim of having changed employment and pension contracts imposed on me - that did not make me feel good. There is of course no doubt that the NHS is in a crisis and the resolution of the Junior Doctors issue will set a precedent for future negotiations way beyond those with the Junior Doctors.

There is also a precedent for the current chaos - remember the communications debacle relating to The system was to improve service but the communications management was lousy.

The reason why I do not know whether Hunt or the Junior Doctors are right is very similar to the debacle - the NHS communications setting out the current 'As-Is' and the future 'To-Be' has been abysmal. Those 'anti-change' have usefully played on emotion and fear. They have also managed to successfully infiltrate almost every one of the discussions on BBC Question Time for some weeks - the equivalent of the Greek Agora, the Roman Forum, and the works' canteen - the dessenters voice is very definitely the clearest and the loudest.  I ask myself why the NHS have not set out, in very simplistic terms, their case for change, perhaps on a webpage, a full page advertorial, or even a televised debate - that also needs to debunk the supposed myths of the BMA.  If that happened I could make an informed decision. If they really wanted to be aggressive they could also 'un-deify' the Junior Doctors - easy enough if you started to discuss the various NHS failures and how they could be linked to the problems the new contracts will overcome.

Of course the NHS' 'Junior Doctors' communications fiasco are only a warm-up for the EU debate - we can expect emotion and fear to dominate. We can expect communications to be poor - they already are.

So what about lessons for procurement? Well, if you want to bring about procurement change, the Junior Doctors crisis may serve as a useful warning:
  1. Make clear, again, and again, and again, what the benefits of the 'To-Be' and how they address the problems of the 'As-Is';
  2. Understand the negotiating power of those involved;
  3. Understand the fears of those who will and could be impacted;
  4. Address head-on the criticisms of the dessenters - some of their concerns will be justified, some will be nonsense, and some just scaremongering;
  5. Remember that new systems and processes are not inanimate, they are concerned with people and it is people who will determine the effectiveness of the outcome;
  6. Bring people with you, including those right on the periphery.

Thursday, 11 February 2016

What can we learn from Deloitte's procurement leaders?

Deloitte have now published their 2016 Global CPO survey
which is worth a read and perhaps even using as a benchmark. Remember it isn't a state of the world but based on the views of an abnormal sample of 324 procurement leaders. Nevertheless some key findings jump out at me:

  • Cost reduction remains a key business strategy for the next 12 months for 74% of the respondents. I do not think it is fair to assume that the other 26% do not see cost reduction as a strategy, but perhaps the question was misunderstood and answered from the perspective of primary objective?
  • 62% of 'procurement leaders' believe of their team do not have the skills to deliver the procurement strategy. While we all know there is an overall skills deficit, what concerns me here is why CPOs would be producing a strategy which they don't have confidence can be delivered - a good CPO will recognise the constraints of people and produce a strategy shaped by those limitations. Of course a good procurement strategy will address skills development too. (As an aside I expect to pick up on the issue of producing a unachievable procurement strategy in a future post so keep watching)!
  • 40% have a clear digital procurement strategy addressing cognitive analytics, crowdsourcing and digital reporting - aka 60% don;y have a strategy! 40% appears to be surprisingly high to me and when I consider only 16% are engaging through the use of social media and 42% with mobile technologies, I suspect there is a misunderstanding of what a digital procurement strategy should comprise (see my white paper)
  • Given the recent procurement disasters the suggestion that only 25% are 'fully involved in the management of risk' is not only disappointing but a bit scary, remember the respondents are 'leaders"!
  • While I frequently hear claims of high procurement influence over spend, the report appears to contradict that, for example, only 66% involved in make/buy decisions. Now if you are a procurement leader and 34% of make/buy decisions are passing you buy - big spend decisions - while I think you may well be honest, how on earth do so many of the 'procurement pack' claim they've influence over ≥ 70% spend?

Sadly, the report didn't pick up on many of the indicators of leading practice I discussed before, but my big lesson is, there remains plenty of opportunity for procurement to improve procurement contribution but first we need to be honest about where we are at the present.

Tuesday, 9 February 2016

Have the NAO got it wrong on gifts & hospitality?

I read the National Audit Office report on the 'Investigation into the acceptance of gifts and hospitality' with interest but have to say I am mystified. While the EU and United Nations are against the receiving of gifts within a procurement context, the NAO appear to have come to a view that:
While barring UK officials from accepting gifts and hospitality is an option, it would run the risk of hampering the legitimate activities of the departments and officials, including engaging with stakeholders.
How could the refusal of a gift hamper (excuse the pun) business? I am also mystified at the lack of explicit recommendations.

Hospitality and gifts are only targeted at those who are likely to have influence over a decision, and there should be no 'ifs' or 'buts', they are offered to distort decision-making. Of course, the NAO have referred to avoiding perceived conflicts of interest - sorry perception of hampering business is unavoidable when gifts and hospitality are received in the procurement process.

Let's also remember that any gift or hospitality offered is not free from cost - that cost has to be recouped from somewhere and in all probability is an overhead cost included in all public sector contracts.

So what were the examples of gifts received:
These included: tickets to professional sports and cultural events, sometimes accompanied by a spouse and/or children; bottles of champagne; wine for a team’s Christmas lunch; iPads; Fortnum & Mason hamper, a painting valued at £300.
That list is of course constrained by the fact that the systems for recording gifts are not robust and not adhered to anyway.

I didn't pick up anything which specifically addressed staff involved in procurement, but let's remember that if they are MCIPS/FCIPS the CIPS Code of Conduct applies.

Regardless, I think the NAO have missed a mark on this one, a robust approach to the acceptance of gifts and hospitality is not just about the perception of conflicts of interest, it is about protecting staff from potential allegations of bribery and corruption - it should not only be a risk management issue but a health and safety issue too.

Monday, 1 February 2016

A bizarre approach to procurement of social services in Northern Ireland

Sometimes I hear a news story relating to public procurement and just sit back mystified. Tonight it was announced that the independent social care sector in Northern Ireland will receive a 'no strings attached' £1.6m gift from the public sector, a 2% increase in the rates Trusts pay to private sector providers.

The aspiration is said to be that the increase will help in recruiting staff, yet whether or not the private sector providers decide to use the additional money in that way is entirely their choice.

It is great that the NI Health and Social Care Board have decided to plough more money into care, but let's remember that the care packages offered to families in Northern Ireland are not remotely similar to those offered elsewhere in the UK and, as a result, many families have to cover care costs which they wouldn't have to elsewhere. I suppose you could argue that 2% increase would reduce costs paid to self-funders, but is that the case?

However, if we look at this purely from a procurement perspective:

  • If the objective was to help with recruitment costs, why was the money not made available with the explicit requirement that it would directly flow into staff pay-packets?
  • Then again, why should the money be passed to private sector providers without any regard to the profits being made and retained by the providers? Would it not have been more prudent to consider how each provider currently manages their business?
  • How does this look to other businesses, particularly family run businesses, which have seen a reduction in their own 'take home pay' while trying to avoid pain for their staff?
I'm sure this was a well intentioned initiative, but perhaps it could be better managed.