Friday, 3 August 2018

ET goes home but not before exposing failings of CCS

According to an article in The Register, CCS has removed a service from G-Cloud which purports to allow Government customers to communicate with aliens. The service is clearly a spoof as it refers to communicating with “disc based platforms” in the Clouds (sic) and the provision of “grey men” and “little green men” beaming in from satellite offices.

The article focuses on the amusement that a service like this was on G-Cloud. However, this does expose how little CCS appears to do to check the authenticity of services it allows on to the Digital Marketplace, and reflects a worrying trend of CCS not bothering to do any proper assessment of suppliers or services on many of its frameworks.

When frameworks were first allowed by the EU in the 2004 Public Contracts Directive (which then became the Public Contracts Regulations 2006 in England and Wales), the idea was to have a stepping stone between awarding a contract to a single provider and having to run full open tenders for every piece of work, so you could create a shortlist of skilled suppliers and allow customers to run more limited competitions between these or perhaps – if it was obvious who the winner would be – direct award to one of them. The early uses of frameworks followed this model, with perhaps 5-10 suppliers on each of them which was a manageable number. If you competed work amongst all of these, you would perhaps end up with half of them responding and it was manageable. In addition, if you were selected as one of the five to ten suppliers in a large market, it is likely you would have a fantastic service offering and/or an extremely keen price, providing superb value for money.
Unfortunately, a number of contracting authorities, and CCS is amongst the worst of these, have now forgotten what frameworks were supposed to be about. Perhaps it is a new wave of procurement people who were not around in the early 2000s who know no better. But increasingly they are setting up ridiculous mass frameworks where the only criteria to get on them is to apply. Among the worst of these is G-Cloud, where they proudly proclaim how wonderful it is that there are over 3,500 suppliers offering 25,000 services. This is no longer a framework, it is just a list of suppliers and CCS is allowing customers just to pick whomever they want to work with with no real oversight. This means that rather than having to be the best to get on a framework and providing excellent value for money, they just open the door for public customers to work with the firms that they like (or who treat them well) with no real consideration on value for money.

The other concern with this, especially in the digital space, is that there is clearly no way that CCS does any effective checking of the services they put on the framework. Probably they do not do any checking full stop. Unless CCS has an army of people reviewing the suppliers and their services, there is no way they could have more than a cursory glance at services they are approving to go on the framework in the 20 days or so they allocate between applications closing and the “winners” being announced. Even a cursory glance at the service for communicating with aliens would probably identify that it wasn’t for real, suggesting that nobody even looks at the services before putting them online. (In which case, what exactly does their team do in the 20 days between applications closing and the award as all the questions are just Yes/No and can be scored by a computer?)

Why does all this matter? Because when you become a supplier on G-Cloud, you are allowed to use the official “CCS Supplier” logo on your website and promotional materials, so it gives you credibility. Your service is published on the Digital Marketplace, so public sector customers probably think that there has been some assessment of it and your credibility. At the very least, they should expect that your company is legitimate and the service is (relatively) safe to use. But with zero assessment of the suppliers or their services, there is nothing to stop organisations creating fraudulent services aimed at ripping off public sector customers or stealing their data. All of the millions of pounds ploughed into GDPR compliance over the past couple of years could be undone by a customer using a “CCS-approved” G-Cloud service put up by a fraudster which slipped through the (non-existent) net.

According to the article, CCS has now removed the offending service denying civil servants the ability to communicate with aliens. But it begs the question of how many other dodgy services they have let through without any checks.

Isn’t it time that CCS did their job and assessed suppliers and their offerings properly to provide confidence that they have some value, rather than just facilitating supplier lists and legitimising anyone who asks to be on them?

Friday, 4 May 2018

CCS's SME strategy: we don't like you and we don't care

The Management Consultancy Two Framework has now exposed what many thought about Government policy all along: they don’t care about SMEs.

In my previous posts, I have explained how SME-unfriendly the framework is, and they have made a few changes to the more ridiculous parts. But this framework is still tilted massively in favour of big firms. In a pretty shambolic webinar last week where CCS reps refused to take any questions or enter into any discussions, they disgracefully claimed that an aspiration of the framework was to support the commercial strategy towards a spend target of 20% with SMEs. How they kept a straight face I do not know - perhaps the speaker has not actually seen the bid documents. Over the past few weeks, SMEs have asked a load of questions to CCS to try to see if they will be more accommodating to the SME end of the market than their mates in the big 4. And on every occasion the answer has either been some woolly non-answer or outright to tell the SMEs that they are not budging.

There are challenges across the piece, but I am going to focus on lot 3 where the biggest issue lies, lot 3. This is supposedly for “complex and transformational consultancy”.  The requirement to get on this lot is to have had two £5m contracts in the past 18 months, awarded as a single contract rather than a number of pieces of work over that period. The bar here is Everest-like for SMEs but a minor hurdle for a big firm. Which is exactly what CCS want – they want to create a lot where the plebs are not welcome, where their customers can pick from the suppliers they want and keep the SMEs out of the way.

The SMEs have done their best to try to get CCS to be more reasonable here.

“Such minimum contract values would exclude most SMEs” said one question, CCS response was just to reiterate the number.

“[Could this value relate to] a range of services delivered under a contractual relationship” asked another, and CCS said “the case study value relates to a single contract award”.

“[Could we] use case studies where the contract was awarded before October 2016 and is still being delivered … [as the current wording] would restrict bidders for lot 3 to only the very large firms” asked another, CCS reply was that it had to be awarded post October 2016.

Again and again the SMEs asked the same thing. Again and again CCS demonstrated that they were not budging. Someone asked them “how many single-contract £5m tenders have been let through Consultancy One in the past 18 months” - CCS response was just “we will not publish the information”.

OK, so it was clear that SMEs are not welcome in Lot 3. If it really is for mega projects, perhaps that is not unreasonable. If you were looking for a consultancy to manage the building of a nuclear power station or an aircraft carrier, Bob’s Consultancy Services of Kettering might not be up to the job and you might need to go to one of the big firms to handle it. If you need a couple of people to put together a new tourism strategy for Corby Town Council, Bob may well be your man and you can secure his services through Lot 1 general consultancy. So perhaps CCS is being reasonable and just making sure that their customers don’t have to consider firms that will not be able to do the work.

Unfortunately, Government departments don’t think like that. Many departments prefer to work with the big firms. They know that if something goes wrong and they picked PWC or Deloitte nobody will blame them, whereas if they pick Bob’s Consultancy Services (sorry Bob) people will doubt their judgement.

So given a choice, most departments would want to use Lot 3 rather than Lot 1. Lot 3 is for “complex and transformation consultancy” but if you have need a few consultants to do some work for you, it may well be “complex” in your eyes and so what’s to stop you going with Lot 3? On Consultancy One there was a multi-specialism consultancy lot for similar complex projects which was stacked with big firms, and loads of work was funnelled down it just to avoid the SMEs on the more specialist lots. Before that there was the Multi-Disciplinary Consultancy Framework, a whole framework to keep SMEs away, and again that was used whenever departments wanted to avoid the plebs. Given half a chance, you know that departments will abuse frameworks like this.

CCS, with its supposed aspiration to channel 20% of consultancy to SMEs to support Government policy, could step in here. They could make it clear that a couple of consultants does not make a complex or transformational consultancy assignment, and that this lot really is for the nuclear power stations and the aircraft carriers.

More SMEs, realising that CCS was not budging on the case studies, tried to get them to give some protection.

“Have you considered putting a minimum value on lot 3 call offs of, say, £3m to avoid [the abuse of this lot]” - CCS’s answer was “a complex and transformation project could be of any value and therefore we will not be placing a minimum value on the lot”.

“You would allow a customer to use Lot 3 for a £100k piece of consultancy if they decided it was complex – surely you must be able to put some minimum limit on these call offs to avoid anti-competitive use even if just £1m” - CCS answer again was that they will not put any minimum value on.

So there you have CCS’s SME strategy laid bare.

We are awarding a lot that nobody can get on unless they have done two £5m single contracts over the past 18 months. But if you are in that club, it is fine for customers to award you a £100k contract for a small piece of consultancy and all you have to do is say it is complex or transformational. Oh, and CCS will do absolutely nothing to police this, so, our big consultancy friends, fill your boots.

It is time for CCS to drop the charade. They are not SME friendly. If SMEs somehow manage to pick up a few scraps off the floor from the table of the big firms, and if those amount to five or ten percent of the work, they will pat themselves on the back for their innovative support of SMEs. It’s a sham. Government prefers working with big firms even if it costs more and delivers less because they are risk averse. And CCS has absolutely no intention of doing anything about it.

After all of their months of working on this framework, CCS have missed a massive opportunity to break the oligopoly of the big consultancy firms, to give the SMEs a chance to shine and to encourage their use. Even with a level playing field getting departments to award 20% of consultancy work to SMEs is a tough ask. With the field tilted this far by CCS’s failed framework design and lack of interest in fixing it, the status quo will remain.

Wednesday, 11 April 2018

Management Consultancy Framework 2 - the shambles continues

Almost five months ago I blogged about the shambles that Crown Commercial Service was making of the Management Consultancy Framework, and in particular its second phase (which was required after they made a complete hash of the first phase). Since then they have spent a long time navel gazing to make sure they get it right and after all that time have basically come up with the same dog’s breakfast they had last November.

The only positive thing they have done is remove the Neutral Vendor lot which they appear to have accepted was just stupid (or perhaps they are just holding off on this until a later date).

The main problem is with lots 1 and 2, general consultancy and procurement/commercial consultancy. These largely replace what was lot 1 of the original framework until they decided to pull it “due to a construct error”.

So what have they done wrong?

Firstly, these two lots have an unlimited number of suppliers. The whole idea of a framework is to shortlist suppliers providing excellent value for money (ie the quality of what they provide against the price they charge). CCS claims that these two lots are 50% quality and 50% price. This is rubbish. There is NO quality evaluation. They have set out a series of specifications and they “quality” evaluation is to say whether you agree to follow these specifications. If you say yes to all of them, you score full marks for quality (ie 50 marks). If you say no to any of them, you score zero and are excluded. So any bidder with a brain cell will say yes and score full marks for quality.

Next there is virtually no price evaluation. There are six grades from Partner down to Junior Consultant, but the pricing evaluation ignores all of these apart from Principal Consultant and Senior Consultant which get averaged. Even if your average of these two is more than twice as much as the median of all suppliers, you still score at least 5 marks for price. There are some rudimentary limits that say you cannot charge more than twice as much for the next grade up, but you could price a principal consultant at, say, £1,000 a day and it would make no difference to your price score whether your partner rate was £1,200 or £4,000.

If you score 55 marks or more overall, you get on the framework. So unless you refuse to work to the specification, you’re in.

There is no consideration about whether you are any good at providing consultancy, whether you have good methodologies and tools, how you work with customers, how you share knowledge or any of that. It is just a tick box exercise.

You would think from that that this is a massively SME-friendly framework as it is so easy to get on, a bit like G-Cloud where you just have to say “yes please” and you are on it. However, what CCS is doing is the exact opposite of that. This is a framework to support CCS’s big consultancy friends.

As part of completing the tenders, bidders on Lots 1 and 2 have to complete a service filters spreadsheet. The one for Lot 1 contains, wait for it, over 180,000 cells. This is split into around 70 different service lines (capabilities) and across 12 regions (which are further split into 40 sub-regions) and 33 departments or customer types. For each of these, you have to indicate whether you can provide service.

So for example, can you provide “Forecasting, planning and development” consultancy in Lincolnshire for the Foreign and Commonwealth Office and its arms length bodies. Or “Artificial intelligence” consultancy for the Not-for-profit sector in Cornwall. Then for everywhere you claim to be able to provide consultancy, you have to provide a reference for where you have done so.

The reason for this ball-ache of a task is that CCS is going to open up this service filter to buyers of consultancy under the framework. So if you are in Skegness Town Council and you want to get someone in to develop a business case for a new pier, you can use the service filters so that you only have to look at consultancies who have previously provided business cases in Lincolnshire in local government. You can exclude the firm who has done the same work 40 miles away in Cromer as that is a different region. Or more bizarrely, as “Inner London - East” and “Inner London - West” are different regions, you can exclude someone whose experience is a couple of miles away. How can this in any way be a reflection of whether a consultancy is capable of doing the work?

Clearly this is excellent for achieving two aims. Firstly, if you have worked for a customer before, you are in the box seat to work for them again as you will meet all the service filters. So it is good for promulgating the status quo of suppliers, and excluding anyone trying to break into a new area/market etc. Secondly, if you are big firm, you have probably done something in most departments and in most parts of the country, so you will automatically tick the boxes. If you are an SME who has managed to secure some work at a handful of customers in Manchester, don’t think you will be able to use this if you set up a new office in Liverpool or Leeds, or to sell your services to a different department.

Unless you are an SME who has no ambition to grow into new areas, customers or business lines, this is just about the least SME friendly framework I have ever seen.
CCS tries to counter this by saying that you can always update your service filters if you can demonstrate you have worked in new areas. Really? So when CCS is pushing all public sector to use this new framework, you have to find someone who will go off framework and give you, a young SME, a chance somewhere else so that you can get a reference to update your filters. Thanks!

Finally, if you thought that was bad for SMEs, CCS will allow pretty unrestricted direct awards under the framework. They say that buyers can award contracts for up to nine months if they can decide having applied the direct award criteria which supplier best meets their needs. OK, so what are the direct award criteria? Whatever the buyer wants. They can define value for money using any combination of cost, price and quality. So if a buyer wants to appoint their friend, they can decide that for them quality means someone who can offer their particular solution, weight it 99% quality and 1% price and just do it. This also circumvents the service filters (which are only used for further competitions), so it doesn’t even matter whether they have any experience in your department/area etc. It is basically a chance to pick any of the potentially 1,000 suppliers they like and just appoint them with no competitive process.

Lot 3, complex transactions, and Lot 4, strategic advice, are again designed to keep the SMEs out of the picture. To bid for Lot 3 you have to have two £5m case studies for work done over the past 18 months, so a major barrier to entry. Lot 4 is a bit less onerous, but still requires two £1m case studies where you have supplied strategic advice to ministers, permanent secretaries or senior civil servants. These barriers to entry are insurmountable for most SMEs but just a small hurdle for the big 4 firms. CCS's SME agenda goes out of the window again. Why does this matter as these lots are not really going to be suitable for most SMEs? Because CCS has a history of "complex transactions" lots like the Multi-Disciplinary Consultancy Framework and the Multi-Specialism Lot on Consultancy One which are really only accessible to big firms, but once they are awarded customers suddenly decide their project with a handful of consultants are "complex" and so decide to put the work through this lot to ensure they only have to consider bids from the big firms and ignore the SMEs on the general lots. CCS does nothing to stop this, like putting a minimum value on any call offs from these lots, and all call off contracts are the responsibility of the individual buyer so they don't care. 

So this is what CCS has spent months working on. A total shambles again, and the main winners will be big consultancy firms, the kind of people who have regular meetings with CCS to discuss things like this and probably who advise them how to write tenders like this. CCS is ruining the consultancy market and the chance to do something decent in it for the next four years. 

We can only hope that the replacements for the CCS Chief Exec and Head of Professional Services can bring in some changes so that when this expires they can replace it with something that works. But I hold out little hope.

Thursday, 23 November 2017

Management Consultancy Framework Two - how not to do procurement

To make fundamental errors with a procurement once is unfortunate, to do so twice is unforgiveable – particularly when the procurement is being led by the UK’s central buying agency and supposed centre of excellence in such matters. But that is sadly the tale with Crown Commercial Service’s efforts to procure a business consultancy framework to use across the UK.

Almost a year ago CCS went to market with the Management Consultancy Framework, and attracted 177 bids for the key “business consultancy” lot. Several months later and just before awarding the contract, CCS decided to withdraw that lot as there was a “construct error” which “did not adequately assess the Bidder's quality of delivery to the level required”. No more information was provided at the time, but there were rumours that the reason was that the major consultancy firms had not managed to secure places and the framework would therefore have no credibility.

CCS announced at the time that they would go to market for a replacement framework in the middle of October after a market engagement, but (as is sadly often the case) were over-ambitious with their dates. Back in September they ran two webinars with suppliers to update on their thinking, and have now provided a final update webinar to suppliers before issuing the tender just before Christmas.

The new framework is going to have five lots. Lot 1 will be for “general” business consultancy, usually for smaller assignments up to 12 months for a single customer. Lot 2 is for commercial and procurement. Lot 3 is for “complex and transformation” consultancy with multiple workstreams and often over 12 months. Lot 4 is “strategic consultancy” such as giving advice to perm secs and ministers. Finally, Lot 5 is for a neutral vendor.

So what are the problems?

Firstly, the whole idea of a framework is to make life easier for the customers. Rather than running an OJEU Open Tender and having to evaluate dozens or hundreds of submissions, frameworks should have a small number of suppliers pre-selected for their capability to deliver, and then allow the customer to choose between those by running a mini-competition. On lots 1 and 2, CCS has decided to have unlimited numbers of suppliers, negating the core purpose of having a framework.

On the webinar, CCS cited the “success” of the G-Cloud framework which adopts a similar approach whilst having around 2,000 suppliers. They glossed over the fact that G-Cloud is and has always been massively abused to provide a route for customers to choose their preferred suppliers generally for services that have very little to do with implementing Cloud technologies. This abuse is facilitated through the specialist Cloud services lot which is supposed to be for support specifically with transitioning to or implementing Cloud computing. However, since G-Cloud was introduced, 77% of the spend has been on these “specialist Cloud services” with only 23% on actual Cloud services - £1.86bn of spend to implement £559m of actual Cloud delivery. In the cash-strapped NHS, for instance, NHS Connecting for Health, Calderdale and Huddersfield NHS Trust and Monitor have between them spent £35m on “specialist Cloud services” but actually only purchased £21,000 of “real” Cloud services.

CCS’s approach to lots 1 and 2 is to have a series of “service filters” where suppliers have to demonstrate they have previously delivered services in the appropriate region, sector and specialism, and that at call off customers can use this to filter the suppliers they work with. This creates two key problems. Firstly, this is unlikely to reduce the number of “capable” suppliers significantly. If a Government department wants a supplier to, for example, deliver some project management consultancy in London, it is likely that there still be dozens of suppliers who can deliver this and they will have to invite all of them to pitch for the work. In reality this is little different from running an Open tender. The second problem is that it makes it difficult for suppliers – especially SMEs – to break into new markets, as CCS will not allow you to tick the service filter to say you are capable of working in, say, the West Midlands region until you have experience of working there, and you cannot get that experience until you can secure contracts there. We live in a connected world and there is no reason that a supplier who has delivered work in, say, London could not do the same in Birmingham, but under CCS’s service filters they are unlikely even to be considered. This is possibly also illegal under procurement law, as customers should invite all suppliers capable of performing work to pitch for it. Public procurement is not supposed to be anti-competitive by maintaining the status quo of suppliers, but that seems to be the consequence (intentional or not) of CCS’s approach.

It is not clear whether CCS will allow direct award for lots 1 and 2, rather than going out to competition. If so with hundreds of suppliers on the lot (and in reality with most of them capable of delivering) this will just allow customers to pick their favoured suppliers for work and again be anti-competitive and maintain the status quo.

CCS are compounding the problems on these lots by stating that it is difficult to assess quality at the framework award level (despite having done so for virtually every other framework), and so they are going to have a limited approach to assessing quality on these lots. Given the stated reason for cancelling the award of Lot 1 of the Management Consultancy Framework was that it “did not adequately assess the Bidder's quality of delivery”, dumbing down the quality evaluation at framework award and allowing an unlimited number of suppliers to pass the threshold seems a bizarre solution to this.

Why would CCS want to adopt an approach with an unlimited number of suppliers with simplified quality questions? The most likely answer is speed of procurement – on previous iterations of the consultancy framework the evaluation process has taken several months to pick the best 10-20 suppliers to award contracts to for the next four years, but having made a mess with Lot 1 of the Management Consultancy Framework and with Consultancy ONE expiring in a few weeks, they are desperate to get something out and appear happy to sacrifice quality and something that actually works in favour of speed.

Lots 3 and 4, complex and strategic consultancy, are more conventional with 20 suppliers for each lot. These may well work satisfactorily, and are likely to the ones that attract the major firms. Unless these are properly policed, as all the lots are available for any size of assignment, so some customers could decide that all of their assignments are “complex” or “transformational” and so need to go through Lot 3 where they will not have to deal with the myriad of SMEs and instead can just target a small number of big suppliers.

Lot 5, the provision of a neutral vendor, is an enigma and potentially very dangerous. The stated aim of this lot is to provide a route to market for consultancies who are not on any other lot and for services that are not already catered for. There are few types of consultancy that would not already be covered by an existing framework, so the real purpose of this lot would appear to be for suppliers who have not achieved a place on any suitable “real” lot of the frameworks, but where the customer decides (probably with no competitive process) that they want to use them. In other words, this lot is just there to allow customers to ignore the procurement rules and pick a supplier they want to work with.

In the challenging times facing the UK with continuing austerity requirements coupled with Brexit, we cannot afford to make a mess of the way the country identifies the most appropriate suppliers to provide consultancy. Sadly, CCS appears to have decided that it is more important for them to put something in place quickly rather than something that works. They have been swayed by talking to customers and suppliers who like the renegade nature of G-Cloud and just want procurement rules to get out of the way and let them work with whomever they want, rather than doing their job and doing the right thing in accordance both with the rules and best practice. CCS will no doubt get something in place by next April, but it is highly questionable whether this will deliver a workable solution for their customers or the best value for money for the country.