Category: Politics of Procurement

Plans to abolish PQQs “well intentioned but badly flawed”

In his second report on small firms, ‘Growing Your Business’, Lord Young, the PM’s adviser on enterprise, recommends the removal of pre-qualification questionnaires across the public sector for all contracts below the EU threshold of £173,934.Lord Young

According to the report, Lord Young believes that the “abolition of PQQs together with the replacement of completion bonds by an insurance scheme would transform the opportunities for small firms and result in a stronger SME sector and at the same time save the taxpayer considerable expenditure”. In this he is building on the initiative of Francis Maude, who scrapped PQQs for central government early in 2011.

Although a well intentioned initiative to enable access to public contracts for SMEs, this is a badly flawed policy that will have exactly the opposite effect. It sounds beneficial to remove bureaucracy from the tender process, but what is actually being removed here is the ‘pre’ element. The qualification questionnaire would still remain, but instead it would be bundled with the full tender response.

This dramatically increases the workload for any company wishing to bid as a full proposal is now required, together with the qualification information. This may be acceptable to a larger company that is confident of winning a high proportion of its bids, but disastrous for any SME’s making a more speculative approach.

It’s undoubtedly true that many PQQs have gold-plated requirements and even more frustratingly each organisation require answers to essentially the same questions in a different format. What is actually required is a reform of the qualification process that efficiently assesses the capability of a supplier. This should be standardised across the public sector so that it only has to be completed once a year.

Key highlights of the Chancellor’s March 2013 Budget Statement

The Chancellor of the Exchequer, George Osborne, today made his statement on the UK Budget 2013, saying it was a “Budget for people aspiring to work hard and get on”.

The Office for Budget Responsibility has forecast growth for 2013 of 0.6%, a downgrade from 1.2% in December, but predicts the UK will avoid recession this year.

For 2014 predicted growth is 1.8%, increasing to 2.8% by 2017. Borrowing for this year has increased from the previous forecast of £108bn to £114bn but is expected to fall in subsequent years, with borrowing as a share of GDP excepted to fall from 7.4% in 2013-14 to 5% in 2015-16.

The Chancellor announced help for small firms, saying: “We’ll increase by fivefold the value of government procurement budgets spent through the Small Business Research Initiative.”

Other key announcements included: Continue reading “Key highlights of the Chancellor’s March 2013 Budget Statement”

Tax avoiders excluded from government contracts

Comedian - Jimmy Carr

New rules that will allow government departments to ban companies and individuals which take part in failed tax avoidance schemes from being awarded Government contracts have been unveiled by Chief Secretary to the Treasury, Danny Alexander and Minister for the Cabinet Office, Francis Maude today, Thursday 14th February.

Many large companies make massive profits from their participation in government contracts and I suspect that few tears will be spilt by taxpayers if any company is excluded from future contracts because it hasn’t being paying the ‘correct’ amount of tax on those profits. Whenever the government intervenes there are always concerns about yet more bureaucracy (especially for SMEs), the scope for subjective decision making beyond existing tax law, but it is also interesting to see how this fits as part of the wider ‘mood music’ from government and their relationship with larger companies.

The rules, which are proposed to come into effect on 1 April 2013, are outlined in draft guidance published for consultation by the Government. They will require potential suppliers to notify contracting departments of their recent tax compliance history, and specifically to tell the department if any tax return has recently been found to be incorrect as a result of:

  • HMRC successfully challenging it, including under the new General Anti-Abuse Rule (GAAR); or
  • a failed avoidance scheme which the supplier was involved in and which was, or should have been, notified under the Disclosure of Tax Avoidance Scheme (DOTAS) rules.

Suppliers will also be required to disclose if they have been convicted for tax related offences or have been subject to a penalty for civil fraud or evasion. Continue reading “Tax avoiders excluded from government contracts”

West Coast Rail Franchise – the latest procurement fiasco

At midnight last night the Department of Transport released the following announcement:

Transport Secretary, Patrick McLoughlin, said “I have had to cancel the competition for the running of the West Coast franchise because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process.”

Bombardier Zefiro High Speed Train

Any of us who tender for public contracts are only too fully aware of the sometimes less than perfect award criteria and a decision making process that owes more to being able to write a creative tender, stuffed with ISO standards, Prince2, ITIL and other accreditations, rather than a process that identifys the most suitable supplier, but how can things go so wrong with such a high profile decision?

Continue reading “West Coast Rail Franchise – the latest procurement fiasco”

Improving NHS Procurement

Operating theatre

Earlier this summer the Department of Health published two documents aimed at improving procurement within the NHS. The first titled NHS Procurement:Raising Our Game is guidance setting out the immediate steps that the NHS needs to take in order to save £1.2 Billion of the current £18 Billion annual procurement spend under the Quality, Innovation, Productivity and Prevention (QIPP) programme. The second document NHS Procurement Standards sets out the standards against which Trusts should be measuring themselves in order to ensure that they improve procurement performance and ensure Value for Money (VfM).Operating theatre

Continue reading “Improving NHS Procurement”

Corruption claims against Edinburgh City Council

BBC Scotland is broadcasting a documentary tonight (20th September) titled ‘Scotland’s Property Scandal’  on BBC1 Scotland (Sky Channel 971) after the news at 22:35. It will also be available on the BBC iPlayer for those of you who don’t have access to BBC Scotland.

The programme investigates the evidence of possible fraud, wrong-doing and incompetence in the Property Conservation Department at Edinburgh City Council. This department is responsible for overseeing the statutory notice system, that seems unique to Edinburgh, where private buildings with multiple owners (e.g. tenements or blocks of flats), can be issued with a notice by the Council stating that the building is going to be repaired and that the cost will be passed to the owners. These repairs are commonly to roofs, or external masonry not only to make sure that they are wind and water tight, but to make sure that there is no danger to passing pedestrians from falling slates or blocks of stone.

Continue reading “Corruption claims against Edinburgh City Council”

Remedies Directive Loophole – Courts Lift Suspensions for Contract

A colleague of mine recently sent me an article about authorities who have been permitted to proceed with contracts after being challenged by a supplier.  Now, if you remember one of my more recent posts, A Slap on The Wrist for Authorities I discussed (in short) how more authorities are being pulled up for their actions when awarding contracts  unfairly and what you could do as a supplier, I believe my exact words were, “just by making a formal complaint you can put a hiatus on the contract award”. Imagine my surprise when I read the article about three cases where the court lifted the suspension and allowed the contract to continue. Apparently the new Remedies Directive has a tiny little loophole, the same law that allows suppliers to put the brakes on a contract award allows authorities to continue the contract until something more concrete is settled in court. Now this won’t be the case for every authority, they must have to merit the circumstances, but it might put some suppliers off the idea of challenging authorities in court. The courts have suggested awarding damages may be the best way to solve the issue when dealing with brazen suppliers willing to challenge the system. The first case was for cleaning services in a college, the college fought that they needed the cleaning services to continue classes, therefore the college was permitted to carry on with the chosen supplier until an agreement was reached in court (i.e. damages). The second case was for an NHS trust which obviously needed to continue business as usual as they are dealing with people’s health, so again the NHS trust were permitted to use the chosen supplier. The third case was regarding landmine clearance in Cambodia…… need I say more?

So what does this mean for suppliers? Will any challenged authority be quoting these cases in court? If the courts feel that damages will be the best path to take when these cases arise, is this really good value for public money? I feel this loophole goes against the power the authorities were kindly given. It goes back to the same old idealism, be transparent and do it right in the first place. If any of our readers are running into trouble with Authorities, let us hear your story!

Standardised PQQ’s – So what is the standard anyway?

I agree with standardised PQQ’s about as much as I agree with world peace; great in principal, but is it a reality? Okay, so maybe it is a touch dramatic to compare PQQ’s to world peace, but standardising PQQ’s will be a colossal mission- can it be done? I asked the question on Twitter a few weeks back, “What annoys you most about PQQ’s” and we got the same answer – Repetition. So can it be done? Here a look at some of the (my) pros and cons.
Read the rest of the post

A Slap on The Wrist for Authorities

Are Procurement Standards Slipping or Are the Powers That be getting Stricter?

I feel that every tweet, RSS and blog is talking about another authority getting pulled up and challenged on one of their “sweep-it-under-the-rug” tenders.

The European Commission has requested Greece to ensure full compliance with EU rules on public procurement – the purchase of goods and services by public authorities – as regards school bus services and the supply of underground electricity cables….. Read the rest of the post

New Model for Government Procurement

The government faces the challenge of making progress on its new procurement operational model while working with departments’ existing contracts, industry experts said.

At the end of 2010, John Collington of the Efficiency Reform Group (ERG), announced that his team aimed to transform the way government buys commonly used goods and services through category management, standard specification and aggregation of spend, to save 25% over 4years.

The 9 categories to begin this central procurement model are:

Energy, office supplies and professional services as the first three categories to be undertaken by March 2011.

Travel, fleet and telecoms will be addressed by June 2011

IT commodities, print management and advertising and media will be tackled by September 2011.

With March 2011 fast approaching, it is the wise supplier who keeps abreast of developments in this area

A spokesman for Price Waterhouse Coopers said, “Some contracts could be terminated, others will have to run their course,” he said. “The costs of ending contracts could be more inefficient than keeping them alive. There could be many different deals kept running when less have been identified as needed. It will take longer than nine months to get all nine areas tackled.”

The Cabinet Office declined to comment on how it would end multiple contracts with existing suppliers in individual Whitehall departments in order to enable the introduction of a centralised model.

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