How, can Government square the circle?

How, can Government square the circle?

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Government wishes to square the circle of wanting to use more small medium enterprises (SME) to provide its services. However, Procurement departments believe large procurements bring economies of scale, and one large contract is easier to manage than a number of smaller agreements.

Can it be done? Yes, if, Procurement accepts a similar disruption to their responsibilities that Uber has caused to the Taxi profession.

It starts with simplicity: –

  1. What does good looks like? Be clear.
  2. Break down the requirements into small chunks.
  3. Only combine chunks when there is a clear requirement. For example, if letting an end-user computing contract, you could break it down as follows: –
  • Acquisition of hardware (Best deals are normally obtained from an online auction)
  • Loading of the image on the hardware and roll out of the kit, collection of old kit and delivery to one location.
  • Cleaning and disposal of old kit.
  • First line support and computer updates, it is likely that the party responsible for the image creation and loading would be best placed to do this task. But it is a separate piece of work.
  • Hardware fixes for the kit. That first fix cannot resolve.
  1. Don’t over complicate. Instead of hiring lots of lawyers and writing a contract that weighs in more than a baby. Seek simplicity, a contract that reflects the true risks.
  2. Do not seek to pass across unlimited liability. The large companies will charge for it. SME’s will either be scared off or sign and then go bust if you claim.

When things go wrong the Daily Mail will not look at the supplier; rather they will focus on the Government department. So, it is more appropriate to transfer the appropriate risks. This also gives the public purse the advantage of only paying for those real risks it has transferred. By using more SME’s if a contract goes wrong, it is not such a big deal and there are more options to replace them. Also the failuer of a smaller contractor failing to perform is not so likely to appear in the Daily Mail.

Critical to such risk transfer is to document clearly how they are reported upon. You do not want surprises. You do not want to rely upon your rights to claim under the contract.

So, we have defined the packages, now let us decided upon the means of Procurement and the terms and conditions. To do this I will use an example: – The provision of a break-fix service for hardware.

  • This can be supplied by several SME’s. Where you have an office that needs full-time technical support, that office should offer a simple contract plus the work specification. It can be offered via a simple advert in the local press if within the OJEU financial limits. If above, then a simple open procurement.
  • This will mean you are likely to have many suppliers of this service. You can compare and contrast the performance at different offices and seek to improve any sub-standard provider or replace them.
  • If the Contractor does not perform then, they can be terminated quickly and a new Contractor appointed within a month.
  • The local Head of the staff in the building can report on the performance of the SME about how they work with the local team.
  • The first line fixes organisation can provide details of when the tasks were assigned to the SME and when the client went into the system and marked the task completed.
  • The local Head of Staff can get them working on Jane’s machine because of an urgent requirement before Fred’s if they see that as appropriate. So a more responsive service.

I mentioned about the Uberisation of Procurement: –

  1. Procurement needs to become enablers for Government officers to do their business, not blockers.
  2. Procurement needs to create easy process and systems that staff can use and then stay out of the day to day matters enable local people to meet local needs.
  3. If a supplier is providing poor service Procurement can make recommendations or become involved to support the local management in terminating and re-engage with the replacement.

Procurement’s role in the future would be to lay down the railway lines but let the local staff drive the train down them. If you need help with this, please contact Wrekin Consulting Limited.

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