Public Services > Central Government

Time for a change

Published 04 March 2016

Public sector procurement is complicated. There are numerous buying organisations and almost as many frameworks. We can make it simpler, starting with one single central government agency that specifies the things common to all procurements, says Ian Fishwick, SME director at Innopsis

 

Members of trade association Innopsis supply around 85% of the network services (by spend) to government. This is a market worth many hundreds of millions of pounds per annum.

The member companies understand that doing business with the public sector can be so much more difficult than selling to the commercial sector. Obviously, there are some differences between the public and commercial sectors, but this does not account for the majority of the problems we all have when dealing with the sector. There's more to it.

We are committed to making it easier for industry and the public sector to do business together.

In this series of articles we will make practical, easy to implement, suggestions that will make life simpler for both industry and the public sector if implemented.

Many of the ideas we will discuss apply equally to many areas of government spend; not just network services.

If government was a business we wouldn't organise it like this.

If my sales team announced that they wanted to set up their own purchasing team rather than use the main company purchasing department I wouldn't let them. If my finance, HR, IT and every other department decided that they wanted to follow suit and set up their own purchasing teams I would tear my hair out.

And yet that is exactly how government has been organised for many years; with most of the larger departments running their own procurements. There are currently 29 public sector buying organisations and 17 of them have frameworks for various ICT services.

Whilst we often need the specialist technical knowledge of an organisation to help with the specifics of a tender; what we don't need is for them to reinvent the wheel on issues that are not department specific.

We strongly support the creation of a single central government agency that specifies things that are common to all procurements for a particular set of products or services. Let us only agree terms and conditions once and limit severely the ability of buyers to deviate from using them.

Even in potentially more difficult areas such as service levels there should only be one set of optional 'Service Level Agreements' for each product set. This is probably best explained by an example:

OFCOM has mandated that Openreach offer a variety of 'care levels' so that a buyer can decide whether they need cover in business hours, Monday to Friday or whether they need a higher level of care such as the more expensive 24 hours a day, 7 days a week support. There are a number of 'care level' options and a buyer has to choose one of them.

The key point is that a buyer is adding significant cost by inventing their own unique terms and service level requirements.

All too often we see buyers inventing new service levels for exactly the same products, bought by their peers doing exactly the same job.

A central procurement team would be able to specify these common requirements, which suppliers would then be able to deliver- at lower cost to the user.

Reducing the cost of bidding for suppliers

We frequently hear the statement above, or something similar. So why do many suppliers not bother getting involved in the public sector even though the annual spend is huge? The answer is simple: the cost of bidding for public sector work is often way higher than when bidding for commercial contracts and there is a clear worry about return on investment.

So how do we:-

- Reduce the cost of bidding?
- Increase return on investment?

Only do once, things that only need to be done once

The first part of every major tender normally relates to providing general company information. I dread to think how many times large companies, such as BT, have provided their accounts, insurance certificates, etc. Even dafter than making industry go to the cost of providing this information, we then spend taxpayers money checking that everything has been received, when it has already been provided time and time again.

A supplier passport... .

Why not provide this information once and get a certificate (a kind of public sector passport) that enables suppliers to bid for work? Regular re-certification, if required, is still cheaper than what we do now. Why not create a 'supplier passport' for say 5 years?
In article 1 of this series, we argued for a central body to agree Terms and Conditions and service levels so that industry didn't have to go to the cost of reviewing the same issues on every major tender.

Increasing return on investment

We need to allow suppliers a chance to sell some products before having to bid again.

Many frameworks take a huge amount of time and cost to bid for. As an example the recent Network Services Framework RM1045 cost industry over £10 million simply to respond to the documentation.

Initially, most buyers don't understand new frameworks and it can be several months before a framework gains traction and is used regularly. This means that a 2-year framework is often in practice 18 months or less. This is simply not long enough to win enough business to recoup huge bidding costs.

The PSN Vision

Early in the formation of the Public Services Network [PSN], the aim was the act of certifying a service meant that both the Provider and the Service were suitable for procurement by the public sector. This meant that pre-qualification could simply be reduced to a certificate. By stating that PSN Certification was required, the procuring body could be sure that the supplier met the standards that government required and that the service had been tested and found to be sound.

Following successful certification, the service would be added to a framework for the duration of the certification. This allowed a flexible marketplace of services that the public sector could buy with a minimum of bureaucracy. This gave a marketplace that was both dynamic and flexible.

Whilst PSN is being directed at the high availability, secure and high capacity services, the same could apply to other levels from Internet based to other non-PSN services.

If it ain't broke don't fix it, so the saying goes, and whilst procurement at many levels is not broken, for suppliers it is fundamentally flawed and it needs tinkering with!

Ian Fishwick is SME director at Innopsis , the industry association for companies driving innovative information sharing
for better public services







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