International sock exchange
“For me, socks are like sex,” said Prince George (the Blackadder version, anyway). “Tons of it about, but I never seem to get any.”
I was reminded of this episode of the sitcom – which focuses on the Prince’s wild spending (£59,000 on socks) – when the Ministry of Defence (MoD) announced this week it is switching the contract for socks for soldiers, sailors and pilots from its supplier of more than 80 years.
There has been a bit of furore about this as the new socks are going to be made in China, rather than by Leicestershire-based firm HJ Hall.
I think the interesting fact here is that the contract has actually been awarded to a British company – Cooneen Watts & Stone of County Tyrone, Northern Ireland. The MoD said the contract would provide “best value for money”.
It certainly brought to mind ex-chief Treasury secretary (and he of the “no money left” note fame) Liam Byrne’s dubious claim last year that 95 per cent of the government’s £220 billion procurement spend “goes to British firms”.
Buying locally (or domestically) can have huge benefits – but only if the money stays in the local economy (promoting jobs, boosting economic activity and causing growth). If the spend is just trickling down the supply chain to Mr Hu in Guangzhou, why not contract with a Chinese vendor directly and cut out the middle man?
![[Bloglines]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/bloglines.png)
![[del.icio.us]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/delicious.png)
![[Digg]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/digg.png)
![[Facebook]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/facebook.png)
![[Google]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/google.png)
![[LinkedIn]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/linkedin.png)
![[Twitter]](http://blog.supplymanagement.com/wp-content/plugins/bookmarkify/twitter.png)
That is a good question Paul – but I suspect it is that the Chinese vendor would be very unlikely to be able to navigate through the tortuous EU tendering process, might struggle with some of the contractual requirements…etc. There may also be issues of stock and delivery that need a more local presence.
Yes, it does help with the ‘official statistics’ as well, but I suspect the real reasons lie around the complexities of the process.
a) Awarding a contract to an overseas firm creates issues with the management of the supply chain, something which the public sector is tradionally not involved in. By using a middleman, the risk in the supply chain is effectively outsourced.
b) Under the procurement regulations, they can only award large value (i.e. over the OJEU threshold) contracts to those firms that respond to the advertisement. Obviously. If no chinese firm does this, then they can’t be awarded the contract.