As a public sector manager or director, how many times have you been frustrated in delivering your objectives by the procurement rules?
Are you aware that the EU procurement directive 2004 and public contracts regulations 2006 allow for the use of more flexible dynamic procurement systems?
There has been little concerted action to define and implement key elements, even though public procurement is an issue that affects us all.
Most direct and indirect service delivery is procured ranging from exam marking, revenue and customs, IT, health, legal aid, justice, congestion charge, parking, housing benefits, refuse collection, construction, adult and children's care, to name but a few.
Are the current rules meeting your vision of achieving world class or efficient service delivery, or are they sclerotic and slow?
The challenge is to make them more responsive and agile.
Lets look at the background
Contrary to some popular belief, the EU rules are sound and are there for good reason. It's how we use and interpret them where the problem lies. We are not being as flexible as we should and that is hitting many business sectors and costing the government money.
For evidence of this, look at the Office of Fair Trading's examination of cartels on cover pricing which is alleged to have cost the public sector millions in the construction sector.
So why can't the EU and UK laws be used to develop a better method of doing business?
Agile methods are being used in the IT sector, and now on project management, so why can't they be applied to public procurement?
The experts will bring forward a number of rules that in effect stifle innovation. Yet, they will not have considered the use of an agile dynamic procurement system (ADPS) as no one has defined it or considered its use in a public sector environment.
Yet it is enshrined in EU and UK law.
ADPS operates on an electronic platform and is like a select list with quality and price thresholds.
There will be a test of competition, but it will be faster and of course may be operated locally.
An unlimited number of firms can join or leave at any time, subject to qualification, so use of the procedure is in effect not limited to £90,000.
So why hasn't it been used? Simply, there has been a lack of leadership in that it has been law for over five years and its use has not been encouraged. Even the recent Glover Report, which looked at contracts in the public sector and was designed to support SMEs and localism, completely ignores the issue and is based upon existing sclerotic thinking where tenders are encouraged on an individual basis.
The OGC has yet to address the issue and continues to advise the use of framework agreements that by their nature favour the larger suppliers.
What should directors do?
If you are head of a public body and are being frustrated by the interpretation of the procurement regulations, then why not explore this issue?
ADPS is fitter, faster, hates sclerotic tendencies, is flexible, works locally and ensures probity, health and safety, social, environmental and is Competition Act compliance.
As all leaders know, you have to provide a vision and hope and find innovative ways to deliver policy. It is vital that you engage with organisations that have a similar vision.
It's your responsibility to deliver the organisation's objectives and achieve the best value for money.
As in any new project, look for focus, results, milestones and outcomes. Accept that the centre isn't going to deliver in the timescales you require. This option has been ignored for the past five years.
Develop a set of common values and understanding about how ADPS will help meet the policy aims. Be proactive and agree a specification on what you want and focus upon outcomes.
For your team, let them understand how this will be easier. If you can partner with others, then get a pilot scheme going. Work to develop a business case and project plan.
On technology development, let the vendors know that you want to implement ADPS procurement in order to meet government policy.
As a result of the Operational Efficiency Programme review commissioned by the chancellor in 2008 and endorsed in this year's budget, the government is to extend coverage of collaborative procurement and increase uptake by 2011.
Amongst the key recommendations are:
• £6.1bn in savings are to be delivered from common category collaborative procurement
• 80% of central government spend
• and 50% of wider public sector spend is to be channelled through collaborative procurement vehicles
A further key recommendation is for government to make better use of existing investments in eprocurement systems.
As well as having a pivotal role in opening up the government market to suppliers, ADPS and procurement will be key to the major improvements ordered in the quality of management information.
This will be vital in catalysing joint working by government buyers and delivering greater value for money for the public purse.
The public sector is being asked to deliver procurement innovation. This is a prime candidate even in today's straightened times, and the allocation of budgets are crucial.
There will be a return on investment through more access to innovation, faster contracting processes, less chance of cartel activity, faster service delivery, more use of SMEs and third sector and improved pricing.
More importantly, it gives the means to end the sclerotic and frustrating practices currently in use.
Doug Forbes is a director at Barony Consulting Group Limited
