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.

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