We all aspire to be light on our feet, increase the pace of change, fail fast and adopt cloud computing, but are traditional procurement methods and routes to market holding us back? Or is the old guard standing fast?
Having had a commercial role for nearly 30 years, I’ve seen many different procurement processes in my time in the private sector, but that’s nothing compared to the complexity of procurement processes I’ve seen in housing.
Total public sector expenditure in the UK stands at £290 billion, of which £21 billion is from housing providers, whether it’s expenditure within standing orders, a quick quote, a full-blown tender or the use of a framework such as G-cloud or DPS; to say it can be a minefield is an understatement! Add in a few CPVs, OJEU, PQQs, RFIs, EOIs and SAQs and the mind soon becomes discombobulated!
A break from tradition
Take the traditional approach – you might have an idea of what you need and engage a consultant (and there are some amazing digital consultants in our sector). This will probably lead to requirements analysis, process mapping, a tender document and a procurement pack written on your behalf, or you may write your own documentation. So far, so good, eh? That’s what we are all used to.
However, here come the ‘gotchas’… some of the tenders we see don’t appear to be built for cloud services such as Microsoft 365, Dynamics or Azure. For the potential vendors, this then gives them 30-50 questions in a document related to security/hosting/data in transit/SLAs up time/down time/rock around the clock time, which all basically have an answer that says, “see Microsoft.com.” Why not just have a box to tick, “SaaS solution hosted by Microsoft”?
There also seems to be at least five different ways to ask the same question in some tenders and again, they’re aimed at actual products or complex housing management systems, not some of the Microsoft platforms we configure to aid digital transformation.
Integration requirements
Then we have the integration requirements (what a delight…); I can’t tell you how many times I’ve seen integration being asked for in the tender documents, despite the third-party IT supplier we’re being asked to integrate with not even having an integration method! To top it all off, can I mention the delight of being asked for a fixed timescale and cost that can’t be amended subject to clarity of information or further scoping? We then have to work out the potential value and risk versus the cost to bid and work out the balance that the customer is looking for between cost and quality.
“So what?”, you might think, poor vendors having to jump through hoops. The ‘so what?’ reflects the impact that these risks have on your procurement outcomes. The ‘so what?’ means a preferred partner may pull out of a bid because of its diligent approach, so the number of suppliers bidding for the contract is reduced, resulting in the costs/value not being properly represented due to the limitations set.
Across the sector, we hear about projects going over budget, not being delivered within the timescale agreed and functionality that was expected not actually being provided. We must all have a conscience around the fact that this money could have been better spent elsewhere, such as improving the tenant experience or building new homes. The cost and timescales of an unnecessarily drawn-out procurement process should ideally be redirected back towards the value and outcomes that the procurement was trying to achieve in the first place.
Traditional procurements methods don’t lend themselves to agile/fail-fast cultures where innovation is critical; traditional procurement methods lend themselves to long waterfall projects with generous timescales. We’re frequently seeing agile working practices being adopted in our sector which need to be supported by improved and faster procurement practices.
A better way of working
Two years ago, after we were asked by some housing customers if we were on the government’s G-Cloud framework, we made the commitment to become G-Cloud accredited. Helped by a bunch of TSG colleagues, I duly spent a week onboarding us onto G-Cloud 11, which was subsequently superseded by G-Cloud 12.
Not much happened for six months until I started tentatively mentioning it in every conversation – “By the way, we’re on G-Cloud if you want to find out more about that procurement route.” We started to open discussions and promote the benefits and now have a number of clients procuring this way.
G-Cloud 12 offers agile benefits, faster and more cost-effective procurement routes to tested, vetted and pre-negotiated top-tier IT suppliers including, but not limited to, TSG.
G-Cloud 12 offers public sector organisations a straightforward and compliant way to purchase cloud-based services, such as hosting, software and support. This is provided through an online catalogue called the Digital Marketplace. Services now include service definition documents, which provide detailed service information to support the evaluation of services, empowering you to make better buying decisions.
The benefits of using G-Cloud 12 include:
- Fully compliant;
- Value for money outcomes;
- Reduced cost of procurement;
- Straightforward awarding of contracts using a simple six-step process;
- Access to the latest innovations and technologies;
- Ready-to-go contracts and terms.
As well as all of the above, there’s practical advice such as a simple buyer’s guide to walk you through the process. All terms are pre-agreed and suppliers’ quality and delivery capabilities are assessed and checked; in other words, you can have complete confidence in who you are dealing with.
Reduced risk & costs
However, the most beneficial element is the reduced risk profile and lower procurement costs. You can put any value on a G-Cloud call-off contract over a two-year period and have no commitment to spend anything. Now, we aren’t saying rush into procurement – you can still follow a diligent process with a consultant if needed, re-engineer processes, do all of your supplier checks, arrange demonstrations, get an idea of the cost profile for the services you might procure and then use G-Cloud. Bob’s your uncle… suddenly a six-month procurement timeframe is shortened to a matter of weeks and it’s fully compliant!
Importantly, G-Cloud 12 enables you to try before you buy. You can make a small investment at first and then scale up once you are satisfied with the company, the people and their ability to deliver for you.
Finally, we’ve been delighted to read about the government’s proposed procurement reforms outlined in its green consultation paper, “Transforming public procurement”. The key changes are worth getting your head around; for example, the concept of MEAT (most economically advantageous tender) will be replaced with MAT (most advantageous tender).
I think this will be welcome news to everyone because procurements will have more flexibility to balance price against other considerations such as quality and community benefits. In addition, the transformation to procurement regulations will result in faster, simpler and more transparent procurement processes which are more inclusive.
Will it ever be easy? No, probably not. However, can we take steps as a sector to minimise procurement risk? Yes, we can!
Kirsty Marsden is the housing service senior design lead at TSG.
