OJEU debate misses the point
I’m going to pick up on Dave Henshall’s blog from last week, looking at some of the comments that were made by readers of Dave’s piece (so thanks to those who influenced this).
I’m afraid the entire debate of whether government should abandon the OJEU, while interesting, started from a false premise. Having spent the weekend at the Reading Festival, it is a bit like me starting a debate about whether I would prefer to be lead guitarist for the Arcade Fire or Blink 182. It passes the time amusingly but doesn’t really have any relationship to reality.
And so it is with debates about “abandoning” the EU procurement process. We can’t stop using it unless we withdraw from the EU (as Graham Crook pointed out in the comments). And let’s get real on that; I reckon anti-EU parties won about 5 per cent of the election vote in May. I would like to see a real debate about the EU, particularly at a time when government spend is being cut, why isn’t our contribution to Europe under the same scrutiny? But that’s a separate issue.
And (as Roy Ayliffe pointed out) we should stress the rules are not for the benefit of procurement people. They are to reflect EU Treaty principles, such as open access for all EU countries, fairness and transparency.
But in any case, what do you really think would happen if there were no rules? A golden age of informed, smart procurement people running open, but rapid and low cost procurement competitions? Or councillors awarding contracts on the basis of “they’re a local firm, supporting local employment” (the subtext of which is, in my experience, “and I play golf with the MD every Saturday”)? Or departments awarding outsourcing contracts on the basis of “we need to move quickly to realise the savings. IBM/EDS/Accenture are clear market leaders in this area so there was no need for full competition”?
I know which I believe is the more likely, and of course how suppliers would react to the suspension of overtly fair procurement. I remember before the election a group of business leaders sent a letter to the Daily Telegraph saying that “arcane procurement rules” caused inefficiencies. I speculated at the time in my blog that Justin King at Sainsbury’s – one of the signatories – would “be straight in to see the permanent secretary within hours if Tesco were awarded some huge food supply contract without proper and fair competition”.
The rules also help the fight against corruption. The private sector manages without OJEU, but then what might be defined as “corrupt” procurement is pretty common in private business. That ranges from really dodgy stuff, to the CEO being taken to Glyndebourne by the investment bankers who just earned £5 million advising him badly on a botched takeover. There is still corruption in the public sector, but I believe it is more prevalent in the private – we just don’t get to hear about it. The EU rules make fraud less likely, not impossible (read Private Eye’s Rotten Boroughs column for a regular eye-opener).
So let’s change the terms of the debate. OJEU and the other rules aren’t going to disappear or be abolished by this or (probably) any other government. Let’s talk instead about how we should work within them in a more effective and efficient manner. Let’s ask why are so many organisations so bad at running compliant EU procurement processes?
Let’s ask why do they take nine, 12 or 18 months to run competitions the legislation allows to be done in about three? Why do we see 25 page PQQs for £50,000 projects, or tenders that require hundreds of days’ work for relatively straightforward requirements? Why was a recent competition to put in place a framework for procurement consultancy delayed and ended up taking almost 18 months – just for something that arguably duplicates a Buying Solutions framework, doesn’t guarantee a pound’s worth of business and will require further mini-competitions?
Another example of the misconceptions around this. Michael Gove recently blamed the EU regulations (at least partially) for the complexity of the Building Schools for the Future programme. What nonsense. The chosen procurement process was complex and arguably created high bidding costs, delays and contributed to apparently high final project costs.
But that wasn’t the EU process. That was officials and politicians who designed it that way. It’s a bit like the child, late handing in their history essay, saying, “Sorry, it hasn’t come back from the bookbinders yet. They’re out of pigskin”. Note to Gove and Byles, nobody in Brussels made you do it that way! (Of course Gove had no involvement in designing BSF at all so it is a mystery to me why he is blaming EU regulations rather than the previous government.)
Perhaps we should start a debate around how EU procurement rules can be improved instead?
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What a wonderfuly well-balanced and reasoned argument. How can anyone be so lucid after a Rock Festival? Have they been desanitised? Aside form that whimsy, the response should be that procurement practices should fit the bill. The EU regulations are aimed at a population comprising the unitised states of Europe. We have come a long way since WWII but we are not even close to our competitive partner the USA which, some reckon, is not even “United” since the Civil War. My personal standpoint is 100% percent pro co-operation and anti-corruption but have a resntment against those who throw legislation issues against progressive pointers. We gotta grow! What’s wrong with that?
JCM
I hear what you are saying Peter and agree with your final recommendation regarding working to change/improve the procurement rules.
What you say is all very good stuff however I suspect my comments and many others were borne more by frustration, concern and sceptisism that needed to be at least excorsied.
I also fear (and have experienced) that one negotiators predjudices and influences can directly impact the OJEC process as easilly as anything the private sector might do.
The key issue to me is that often one contract can cover such a broad range of public sevice resulting in a deal that may be great for the negotiator but lousy for one of their internal customers….but there I go again!
Oh, and by the way Arcade fire is miles ahead.
Bravo Peter (and Roy Ayliffe). The rules are not there for procurement people. They are there for enterprising firms across the EU which have solutions to the tsunami of public sector challenges. That said I have 2 questions. 1. Where is the sense in allowing each EU procurement authority to dictate the language in which tenders may be drawn up? 2. Do public sector procurement professionals recognise the enormous contribution which they could make towards getting us all out of the current fiscal mess?
Peter the answer to your question is a four letter word – risk…and not just good old commercial risk, but also political risk as well (both upper and lower case), and of course the old favorite – blame culture, which results in all involved trying to anticipate and manage every possible consequence of every possible downside. Finally, the icing on the cake a “tick box approach” to process; combine them with an absence of judgement and you get the OJEU process, that we love, respect – nay cherish.
I don’t think it’s quite correct to say that ‘the rules are not for the benefit of procurement people,’ they are there to benefit both sides as well as the wider public interest.
It is correct to say that they are there to reflect EU Treaty principles though, which were derived from the premise that nations that are dependent upon each other for trade are unlikely to go to war with each other. The secondary premise is that both total economic welfare of the free trade group and the welfare of each individual country will be maximised by free trade between the members: such free trade leads each state to specialise in those areas in which it has a comparative advantage, resulting in the most efficient use of resources and thus enhancing wealth.
Both Dave Henshall’s initial blog entry and many of the responses blame the OJEU rules for the bureaucracy and inefficiency surrounding public procurement. In my view this is complete nonsense, the OJEU rules are really only prescriptive in as much as they require the process to be conducted fairly, using objective criteria and to allow sufficient time for a supplier to provide a considered response. Who can argue that these aren’t reasonable conditions? Nowhere do they say that suppliers must provide reams of documentation and certification on quality assurance, environmental sustainability, equality issues, health & safety, etc., or that it is essential that the tender specification must be written to be both confusing and incomprehensible.
I’m not sure we need a debate so much about improving the EU rules, as a debate about how we get the public sector in the UK to focus on improving the process under the existing rules.
Almost every contracting authority has its own rules on how the process should be conducted and what the documentation should look like. 95% of procurement is for commonly available goods and services, so why does everyone need their own particular way of doing it?
The OGC has been working on developing a standard pre-qualification questionnaire, but this has been dragging on for months, if not years. The templates were published earlier this year, but I have seen no sign of these becoming widely adopted and as the OGC has now been subsumed into the Cabinet Office, there is a distinct danger than this initiative will not be rolled out.
So Mr, Mrs and Ms. Procurement Officer, please stop blaming Brussels for the inefficiencies of your procurement processes and take a really good look closer to home and ask yourself what you can do to improve the substantial part of the process under your direct control.