Author Archives

Tim Williams

Sir Philip Green’s Efficiency Review ‘Stating the bleeding obvious’?

Sir Philip Green

This week saw the publication of Sir Philip Green’s ‘Efficiency Review.’ My favourite response, apparently made by a Liberal Democrat Treasury spokesman was ‘Most of it, to use Greenspeak, is a statement of the bleeding obvious.’

As Nick Timmins commented in the Financial Times this week:

‘We have been here before. They all found the same. And it must be said, much of their analysis, and some of their prescriptions, were a good deal more profound than Sir Philip’s somewhat glib 33-page PowerPoint-style presentation. Same analysis. Great headlines. Not a lot of detail on how to tackle it all.

The FT hits the nail on the head, we don’t need some non-dom, tax-exile, retail tycoon to identify the problems, the problems are comparatively obvious. Indeed the way to achieve improvements in the way things are currently done that would save billions are also fairly obvious. The hard part is implementing the improvements, in making sure that any initiatives are communicated all the way down to the frontline staff actually doing the purchasing and then monitoring their behaviour to make sure they are following the new policies.

Sir Philip Green


Public contracts after the General Election

UK Party Leaders

Despite the three election debates, none of us are any the wiser precisely how the next Government will cut expenditure in order to pay off the financial deficit. We know that change is (hopefully) coming that will reduce the size of ‘Big Government’ and while change often brings threats, it also brings opportunities.

UK Party Leaders

UK Party Leaders

Continue reading “Public contracts after the General Election”

Gordon’s EU Compact for Jobs & Growth

Gordon Brown & Herman van Rompuy

In yet another sign of the growing political significance of public procurement the UK Government today published a compact designed to reinvigorate EU economies and build “strong, sustainable and balanced” growth. Gordon Brown met EU President Herman van Rompuy at Downing Street this morning to discuss the economic strategy, as well as climate change, security and the situation in Haiti.  

Continue reading “Gordon’s EU Compact for Jobs & Growth”

Financial thresholds for contracts published in the Official Journal (OJEU)

Euro notesI’m a bit late with this blog post, what with Christmas and New Year and then all the snow, but better late than never.

On January 1st 2010  new financial thresholds, which govern whether or not a contract must be published in the Official Journal of the European Union (OJEU), came into force. There’s often a lot of confusion about these thresholds, so I’ll try and explain a bit of the background as well as the actual values of the new thresholds.

Continue reading “Financial thresholds for contracts published in the Official Journal (OJEU)”

Remedies – Public sector buyers beware!

Spoonful of medicine
Spoonful of medicine

Harsh medicine?

 

On Sunday the Remedies Directive (2007/66/EC) was implemented in UK legislation. In England, Wales and Northern Ireland, the Office of Government Commerce (OGC) had drafted ‘The Public Contracts (Amendment) Regulations 2009’ (SI 2009/2992). While in Scotland the Scottish Procurement Directorate (SPD) had drafted The Public Contracts and Utilities Contracts (Scotland) Amendment Regulations 2009 (SSI 2009/428). Although both sets of regulations are implementing the same European Directive there are some significant differences in the detail, although in this article I’ll only concentrate on the main effects.

Continue reading “Remedies – Public sector buyers beware!”

European eGovernment Awards 2009

Angela Smith MP
Angela Smith MP

Minister of State for the Cabinet Office, Angela Smith

We are just making the final preparations for our participation in the European eGovernment Awards 2009, which are being held to coincide with the 5th Ministerial eGovernment Conference in Malmö, Sweden on 19th/20th November.
Continue reading “European eGovernment Awards 2009”

Official Journal of the European Union (OJEU)

Philippe Lebaube

The Official Journal of the European Union(OJEU) is the gazette of record for the European Union. It has been published in 22 official languages (23 when Irish is required) of the member states, every working day since the Treaty of Nice entered into force on 1 February 2003.  The OJEU superseded the earlier Official Journal of the European Community (OJEC) with the establishment of the European Union.

Continue reading “Official Journal of the European Union (OJEU)”

Swedish Court Cancels Armoured Vehicle Contract

The European defence market is changing. Where once each nation maintained its own defence industry, this is no longer a viable model as Europe faces enormous pressure from the US, which has the worlds largest defence market. In August this year, a new European Directive (2009/81/EC) on defence and security procurement came into force. The new Directive brings defence procurement more into line with mainstream public procurement. Previously member states were able to avoid openly tendering for even quite mundane items of equipment by invoking Article 296 of the European Treaty and stating that they were for their ‘essential security interests.’

Earlier today the Stockholm County Administrative Court ruled that a €240 million armoured personnel carrier deal with the Finnish arms manufacturer, Patria, had breached Swedish public procurement law. The Swedish Defense Materiel Administration (FMV) has been ordered to repeat the tender process despite awarding the contract to Patria in June.
Continue reading “Swedish Court Cancels Armoured Vehicle Contract”

European Commission investigates Glasgow Housing Association’s failure to openly tender

Glasgow Housing Association (GHA) is a private not-for-profit company created by the Scottish Government for the purpose of owning and managing Glasgow’s social housing stock. The housing stock, of approximately 81,000 houses and flats, was previously owned by the Glasgow City Council.

Following a poll of the Council’s tenants, the vast majority of their social housing was transferred to the ownership of the Glasgow Housing Association. The transfer was mired in controversy at the time, there was a strong No campaign backed by the Scottish Trades Union Congress (STUC) and many commentators doubted that there was a genuine desire on the part of the tenants to transfer to another landlord. However, a condition of having Glasgow’s housing debt written off was a transfer whole stock. This was initially going to be to one landlord, however, the Scottish Government intervened and introduced the concept of Second Stage Transfer (SST) to smaller Housing Associations over time.

Taroub Zahran, the Chief Executive of Glasgow Housing Association, resigned from her position at the end of Taroub Zahran Former Chief Executive - Glasgow Housing AssociationSeptember after what was believed to have been disagreements with the Scottish Government and Glasgow City Council over the slow speed of stock transfer.

A total of 322 tenants in Glasgow transferred to a new landlord at the end of July following the transfer of homes from Glasgow Housing Association (GHA) to two community-based housing associations under the Second Stage Transfer process.

Provanhall Housing Association took control of 195 homes, and another 127 houses in Hyndland were transferred to Glasgow West Housing Association.

Provanhall and Glasgow West join Shettleston, Ardenglen, Cassiltoun and Parkhead housing associations which took ownership of GHA homes in March this year.

A further 21 Local Housing Organisations who currently manage approximately 19,000 houses on behalf of GHA are still progressing through the various stages of the SST process. Ballots for a further four potential transfers are planned for this calendar year, with transfer potentially by the end of the financial year.

The European Commission, who will have begun their investigation following a complaint, has asked the UK Government to provide further information on how these contracts were awarded as it believes that they were public service contracts and as such should have been awarded on the basis of an open and transparent tendering process. If the European Commission is correct that no open tendering process was conducted, the UK will have failed to fulfill its obligations under the Public Procurement Directive 2004/18/EC.

The penalty for failing to fulfill such obligations is often simply that the relevant member state has to demonstrate that it has taken measures to rectify the situation and to prevent a future re-occurrence. Although sometimes, if it is not satisfied with the action that has been taken, the Commission will ask the European Court of Justice to impose a financial penalty.

In 2004 the Commission sought to impose daily fines against Germany for two long term (30 years) waste contracts that had not been correctly tendered.The fines sought were €31,680 per day for the City of Bockhorn contract and €126,720 per day for the City of Brunswick contract, which would be payable until the illegal contracts had been cancelled. That’s €58 million per year for 30 years!

The German government were in a bit of a sticky situation here, as it was the City authorities that had entered into the contracts and so the Government had no direct authority. Fortunately they managed to negotiate an agreement annulling the contracts.

Tories will ‘unleash an army of armchair auditors’ to spend money better

Francis Maude - Shadow Minister for the Cabinet Office

Francis Maude - Shadow Minister for the Cabinet Office

Speaking at the Conservative party conference in Manchester yesterday, Francis Maude, Shadow Minister for the Cabinet Office, said the party would publish online, every item of government expenditure over £25,000 and all government tender documents for contracts worth over £10,000.

The Shadow Minister said that he thought that this would allow ‘an army of armchair auditors’ to crawl all over the governments accounts and not only help them to spend money better, but it would also help to rebuild trust.

This isn’t the first time that politicians have promised to make government procurement more transparent:

  • In 2003 the Better Regulation Task Force published ‘Government Supporter and Customer?’ Recomendation No. 1 was that the government should advertise ‘lower value contracts from across central government and include information on future contract opportunities.’ This set the scene for the Supply2.gov website, which due to a woeful lack of support from the Department of Business failed to reach its true potential and is due to be replaced by a new website implementing the Glover recommendations (see below).
  • In 2005 the Office of Government Commerce and the Small Business Service published ‘Smaller supplier…..better value?‘ which pointed out the challenges facing SME’s and how the government could help by publishing their future contracts online.
  • Also in 2005 the Office of the Deputy Prime Minister (when John Prescott was still a force to be reckoned with) published the ‘Small Business Friendly Concordat: Good Practice Guidance’ which yet again urged public sector organisations to use their websites to publish ‘details of forthcoming bidding opportunities.’
  • In 2006 the then Scottish Executive published a ‘Review of Public Procurement in Scotland’ authored by John McClelland, which recommended that ‘a single public sector “electronic portal” should be established. Suppliers must be able to access all essential information on opportunities to offer services and bid for contracts for the supply of commodities and services to the whole Public Sector in Scotland.’ This report resulted in the establishment of the rather effective Public Contracts Scotland website in 2008, which is run by the (some say, brilliant) team behind Tenders Direct.
  • Most recently in November 2008, the Glover report or ‘Accelerating the SME economic engine: through transparent, simple and strategic procurement,’ as it was more formally known, yet again, you guessed it, recommended that:
    • ‘By 2010, contract opportunities above £20,000 across the whole public sector should be advertised electronically with standard indicative contract value ranges, and accessible through a single, free, easy to search online portal.’

So at numerous times over the last six years, various politicians, government departments, quango’s and notable report authors have called for more transparency in the publication of government contracts.

The main barrier to progress has definitely been the lack of a clear lead by central government, either to publish its own contracts, or to establish an infrastructure and clear guidelines or regulations to ensure that other public bodies publish their contracts. The secondary barrier has been an unwillingness by staff in local authorities, NHS trusts, etc., to publish their contracts. This unwilling attitude stems from a variety of reasons such as a fear that they will be inundated with suppliers, that they want to keep contracts for local suppliers, that they ‘know’ who the best suppliers are anyway. Provided the procurement activity is approached professionally these fears are either groundless, well intentioned, but illegal and ineffective, or simply wrong. All of them get in the way of efficient procurement, or as the Right Honorable Member for Horsham put it yesterday we need to ‘spend money better.’

 The Department for Business and the Office of Government Commerce have been making some progress towards implementing the recommendations contained in the Glover Report. Unfortunately progress appears to have slowed as the General Election looms closer. At least it seems that the Tories have a similar, if not even greater, enthusiasm to open up public procurement, so that regardless of who wins power next year we should have a new era of open access to government contracts.

%d bloggers like this: