An SME's view of the procurement processes: A new dawn or much of the same?
As an SME involved in projects within the public sector, DMSG speaks to many different departments about procurement processes. While G Cloud has been around since 2012 we first dipped our toe into the water with G Cloud 4 and subsequently have added our name to all G Clouds up to and including 9, the DOS framework and more recently with Tech Services 2.
I can certainly agree that the aim of the government to simplify the procurement process has been achieved. Once you have been successful in supplying services on whatever platform or framework, the process is swift from the issue of a contract, followed by a PO to a start date which we have experienced in under a week. I don’t think this is typical but it shows that it can be done.
However, does this mask some serious and worrying (for an SME) elements to government procurement in the period prior to award, i.e, the selection process.
We are all told that these frameworks have simplified procurement and leveled the playing field so that SMEs can compete with the big boys. Fantastic stats have been released showing the high numbers of SMEs on the frameworks, in 2013 of the 700 suppliers 80% were SMEs, this figure has grown to 2847 suppliers on G Cloud 9. However, what these stats don’t show is the number of SMEs that are conducting any meaningful business within the public sector. I think it is still more likely that the 80/20 rule applies and 80% of public sector business is being won by the 20%.
Why is this?
Well, all the normal reasons apply, size, scale, coverage, manpower, bench and financial stability. However, more worryingly with the growth of these procurement platforms which aim to level the playing field, we are in fact making it more difficult for the SMEs.
The process is now governed by commercial teams who have their hands tied by the governance process. This process is essential to allow free and fair competition, but it puts them at arm's length from both the business and the suppliers and forces them into a broker relationship.
This is done to ensure correct governance over the process but in essence, for SMEs, takes away any ability to show a point of difference, build or manage a relationship and ultimately add value to the departments.
What we need is more engagement and I mean real engagement but not in the form of supplier days and “show and tells”. I know this is not true of all commercial teams and there are some very engaged individuals who understand the business needs balancing out with the needs and desires of the suppliers - you know who you are. The engagement needs to happen during the selection process. If no engagement takes place, then the process by nature becomes pre-determined with only large, current or known suppliers left with any chance of success. I know that I am generalising here and as ever there are exceptions but when a procurement team either requests a high level of security clearance, which can only be sponsored by a large company, unless a company is fortunate enough to have some people with current clearance, or doesn’t give enough information to allow an effective bid response, they ensure that only those with inside knowledge could effectively compete, thereby excluding 80%+ of suppliers.
Right idea but an unfortunate outcome!
Don’t get me wrong, I totally believe in the system that the government has put in place and believe wholeheartedly that they have done it for the right reasons. Unfortunately, like a large number of issues in public sector, due to the size and scope, the changes you make do not always have the desired effect and quite often end up resulting in a different outcome.
As an example, G Cloud was intended to cut through all of this but the process still took a while to get the desired outcome for the departments. Along came DOS and subsequently DOS 2 to allow faster procurement of smaller lots and individuals. Recruitment agencies and individual contractors, quite rightly, saw this as a quick way to supply and now you have a framework which is full of recruitment agencies and individual contractors trying to sell themselves as solutions-delivery companies. I don’t believe that was the desired outcome as the government already has CL1 for individual hires and, do they really want to end up managing a large number of external resources with no one taking responsibility for their actions? If it is, then great, the result has been achieved.
A new dawn?
It would seem that to combat this, the current approach within government is to add or tweak new frameworks to achieve the outcomes that they originally desired. We now have Tech Services 2 which has moved back towards companies that do actually have services and substance, note the lack of recruitment companies and individuals!
Let’s see how it pans out after its recent release. Could this herald a new dawn? I can only hope, but one thing is for sure that no matter how many procurement platforms and procedures are put in place, there is still no substitute for good old-fashioned networking and relationship management.