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.
