Government procurement contracts
Discussion
I saw this in the news over the weekend:
http://www.bbc.co.uk/news/uk-england-derbyshire-22...
Reading the article got me thinking that there seems to be a disconnect between the needs of the tax payer nationally to get a good deal for the best price, and the need of the tax payer locally to get THE deal in order to avoid damage to the local economy through loss of jobs etc.
In Derby we had major ructions when Bombardier lost the Thameslink project. Jobs were lost. Now, it can be shown quite clearly that Bombardier were going to make redundancies even if they had won Thameslink, so well done the company for finding a way to blame the Government for your own mess. But interestingly, Bombardier lost the contract because they put in a crap bid compared to their rivals! From a Government perspective that includes protecting the nations tax payers, even allowing for the cost of added unemployment in Derby, any choice other than Siemens would have been madness (based on what both companies submitted)
But, rather than learn the lesson and work harder for the Crossrail deal it would appear that "buggins turn mentality" seems to have come to the fore.
Chris Williamson, Labour MP for Derby North, said: "As far as Thameslink is concerned, it's over.
"All our efforts now are going to be deployed in pressing the government to ensure the next big contract, which is for Crossrail, comes to Derby.
Whatever happened to winning public infrastructure contracts on merit? Whatever happened to the right product, delivered on time, without defects, to the right price (something which Bombardier Derby has struggled with) as a method of ensuring job security for employees?
Should the Government (and thus us the tax payers) bow to pressure, or should they select the best deal?
http://www.bbc.co.uk/news/uk-england-derbyshire-22...
Reading the article got me thinking that there seems to be a disconnect between the needs of the tax payer nationally to get a good deal for the best price, and the need of the tax payer locally to get THE deal in order to avoid damage to the local economy through loss of jobs etc.
In Derby we had major ructions when Bombardier lost the Thameslink project. Jobs were lost. Now, it can be shown quite clearly that Bombardier were going to make redundancies even if they had won Thameslink, so well done the company for finding a way to blame the Government for your own mess. But interestingly, Bombardier lost the contract because they put in a crap bid compared to their rivals! From a Government perspective that includes protecting the nations tax payers, even allowing for the cost of added unemployment in Derby, any choice other than Siemens would have been madness (based on what both companies submitted)
But, rather than learn the lesson and work harder for the Crossrail deal it would appear that "buggins turn mentality" seems to have come to the fore.
BBC article said:
Chris Williamson, Labour MP for Derby North, said: "As far as Thameslink is concerned, it's over.
"All our efforts now are going to be deployed in pressing the government to ensure the next big contract, which is for Crossrail, comes to Derby.
Whatever happened to winning public infrastructure contracts on merit? Whatever happened to the right product, delivered on time, without defects, to the right price (something which Bombardier Derby has struggled with) as a method of ensuring job security for employees?
Should the Government (and thus us the tax payers) bow to pressure, or should they select the best deal?
Let us suppose we were India or South Africa
We would say, you may bid for the contract of course. But 50% of the workforce must be English. 50% of the management must be English
It must be 50% produced in the UK or other similar restricted clauses. Eg ongoin servicing etc must be handed to "local" workforce.
Covered both ways and we assume we get some technology transfer too.
This is going on all over government, blame the Cabinet Office.
For example, government spend about 20bn on IT, and the cabinet office are adamant that they are being ripped off by large IT companies such as Microsoft, oracle, IBM, Cap Gemini, Atos etc. They are partly right as there are huge deals by the same company sold multiple times to multiple agencies, however each has their own specific requirements, and therefore you cannot price each deal the same - especially when government seem to think they are special compared to the private sector and want everything gold plated.
However the cabinet office is now insisting SME suppliers (small medium enterprise, usually with a turnover of less than £50m, which is very small in IT terms) take the lead and are given a bigger slice of the government business, as apparently they can do it much cheaper. The problem is that smaller suppliers are not geared up with the resources or skills to take on contracts that would double their turnover within a single deal - and many don't want government business anyway as the margins are so low and the requirements so inflexible. So there is this ridiculous situation where the cabinet office is beating up the big suppliers whilst trying to encourage smaller suppliers to deliver services which they just cannot deliver effectively. There is the all the hidden costs of changing suppliers for massive contracts in knowledge transfer etc, so the actual overall costs end up being higher.
Government procurement is an absolute joke,always spending millions developing stupid 'procurement frameworks' which no agency wants to use and which saves no money. The outgoing leader of the 'g-cloud', a pathetic IT procurement framework for cloud based services (most services on the framework aren't even cloud services) has just been given a CBE! A CBE for losing us all money and bailing out on the project when s
t hit the fan.
Rant over.
For example, government spend about 20bn on IT, and the cabinet office are adamant that they are being ripped off by large IT companies such as Microsoft, oracle, IBM, Cap Gemini, Atos etc. They are partly right as there are huge deals by the same company sold multiple times to multiple agencies, however each has their own specific requirements, and therefore you cannot price each deal the same - especially when government seem to think they are special compared to the private sector and want everything gold plated.
However the cabinet office is now insisting SME suppliers (small medium enterprise, usually with a turnover of less than £50m, which is very small in IT terms) take the lead and are given a bigger slice of the government business, as apparently they can do it much cheaper. The problem is that smaller suppliers are not geared up with the resources or skills to take on contracts that would double their turnover within a single deal - and many don't want government business anyway as the margins are so low and the requirements so inflexible. So there is this ridiculous situation where the cabinet office is beating up the big suppliers whilst trying to encourage smaller suppliers to deliver services which they just cannot deliver effectively. There is the all the hidden costs of changing suppliers for massive contracts in knowledge transfer etc, so the actual overall costs end up being higher.
Government procurement is an absolute joke,always spending millions developing stupid 'procurement frameworks' which no agency wants to use and which saves no money. The outgoing leader of the 'g-cloud', a pathetic IT procurement framework for cloud based services (most services on the framework aren't even cloud services) has just been given a CBE! A CBE for losing us all money and bailing out on the project when s
t hit the fan.Rant over.
Quite right. Not to forget that govts own risk framework then kicks in to provide every reason not to give the work to smaller providers. Skyscape is an interesting exception in IT. But founded on civil service assets.
However, most outsourcing contracts now that include significant TUPE are best avoided.
However, most outsourcing contracts now that include significant TUPE are best avoided.
Grenoble said:
Quite right. Not to forget that govts own risk framework then kicks in to provide every reason not to give the work to smaller providers. Skyscape is an interesting exception in IT. But founded on civil service assets.
However, most outsourcing contracts now that include significant TUPE are best avoided.
Yep, with the ultimate one being the liabilities insurance in the general government terms and conditions (usually non negotiable) which sets the liability massively high, and loads all the liability onto the supplier. Most SMEs cannot get insured for the amounts set out as their turnover isn't high enough.However, most outsourcing contracts now that include significant TUPE are best avoided.
What really happens is that a whole bunch of SMEs end up supplying in a joint consortium, with the big player such as HP acting as the 'systems integrator' or 'prime contactor', so they get the business anyway. So instead of one or two massive suppliers, you get 15 small ones and one big one, with a whole load more work and management involved, meaning more cost in the long run. But the cabinet office tick the SME box so that's ok then
Transmat said:
Yep, with the ultimate one being the liabilities insurance in the general government terms and conditions (usually non negotiable) which sets the liability massively high, and loads all the liability onto the supplier. Most SMEs cannot get insured for the amounts set out as their turnover isn't high enough.
What really happens is that a whole bunch of SMEs end up supplying in a joint consortium, with the big player such as HP acting as the 'systems integrator' or 'prime contactor', so they get the business anyway. So instead of one or two massive suppliers, you get 15 small ones and one big one, with a whole load more work and management involved, meaning more cost in the long run. But the cabinet office tick the SME box so that's ok then
TfL is heading the right way with this one. Hopefully other public sector organisations start to.What really happens is that a whole bunch of SMEs end up supplying in a joint consortium, with the big player such as HP acting as the 'systems integrator' or 'prime contactor', so they get the business anyway. So instead of one or two massive suppliers, you get 15 small ones and one big one, with a whole load more work and management involved, meaning more cost in the long run. But the cabinet office tick the SME box so that's ok then
Transmat said:
Grenoble said:
Quite right. Not to forget that govts own risk framework then kicks in to provide every reason not to give the work to smaller providers. Skyscape is an interesting exception in IT. But founded on civil service assets.
However, most outsourcing contracts now that include significant TUPE are best avoided.
Yep, with the ultimate one being the liabilities insurance in the general government terms and conditions (usually non negotiable) which sets the liability massively high, and loads all the liability onto the supplier. Most SMEs cannot get insured for the amounts set out as their turnover isn't high enough.However, most outsourcing contracts now that include significant TUPE are best avoided.
What really happens is that a whole bunch of SMEs end up supplying in a joint consortium, with the big player such as HP acting as the 'systems integrator' or 'prime contactor', so they get the business anyway. So instead of one or two massive suppliers, you get 15 small ones and one big one, with a whole load more work and management involved, meaning more cost in the long run. But the cabinet office tick the SME box so that's ok then
Of course the gov just signing contracts willy nilly without bothering to check for value for money doesn't help.
Tallbutbuxomly said:
This however with HP part of the huge cost is utter mismanagement on HP's part. There is an example of a company that cannot tell its arse from its elbow. Monumental waste and mismanagement.
Of course the gov just signing contracts willy nilly without bothering to check for value for money doesn't help.
HP aren't too bad, there are much worse, but the most common reason for rip off contracts is because government themselves don't know how to write a decent statement if requirements, they think they are so important that they must have everything full bells and whistles, and IT depts don't have the balls to tell the business (the govt agency business units) that a cheaper contract means reduced service levels and possibly reduced availability. Therefore the outsourcers run their hands together as they quote for a bloated contract with the 'A-team' of contractors and consultants doing the delivery. Of course the gov just signing contracts willy nilly without bothering to check for value for money doesn't help.
There is definitely an element of the gravy train ending for government contracts now though, I was involved in a Cap one where they were ripping off the client with 'scope creep' for years.
HP are one of the companies I have contact with and I assure you they could not organise a piss up in a brewery. Their reputation with their staff is in the pan massively.
They tend to buy up companies then shed staff on a massive scale which in turn neg affects the bought companies efficiency and profits and in turn badly affects those the company is meant to support customers wise.
The register has plenty on their ineptitude which simply further enforces my beliefs.
They tend to buy up companies then shed staff on a massive scale which in turn neg affects the bought companies efficiency and profits and in turn badly affects those the company is meant to support customers wise.
The register has plenty on their ineptitude which simply further enforces my beliefs.
A question. If the Cross rail project were in Germany where do you think the project would be awarded.
Or the major elements for a new power station.
It's buggins turn there for the boilers, and you got the switchgear last time so on this one you get...
All in smoke filled rooms, metaphorically speaking.
Or the major elements for a new power station.
It's buggins turn there for the boilers, and you got the switchgear last time so on this one you get...
All in smoke filled rooms, metaphorically speaking.
FiF said:
A question. If the Cross rail project were in Germany where do you think the project would be awarded.
Or the major elements for a new power station.
It's buggins turn there for the boilers, and you got the switchgear last time so on this one you get...
All in smoke filled rooms, metaphorically speaking.
I don't know. I am not talking about Germany. Are you saying we should be like Germany? Or the major elements for a new power station.
It's buggins turn there for the boilers, and you got the switchgear last time so on this one you get...
All in smoke filled rooms, metaphorically speaking.
Tallbutbuxomly said:
HP are one of the companies I have contact with and I assure you they could not organise a piss up in a brewery. Their reputation with their staff is in the pan massively.
They tend to buy up companies then shed staff on a massive scale which in turn neg affects the bought companies efficiency and profits and in turn badly affects those the company is meant to support customers wise.
As one of the many 'shed staff' I heartily concur with this, HP ( and EDS before HP bought it ) have a long history of getting rid of experienced staff and replacing them with cheap, often imported, younger people who simply don't have the experience or knowledge to deliver services to the same level.They tend to buy up companies then shed staff on a massive scale which in turn neg affects the bought companies efficiency and profits and in turn badly affects those the company is meant to support customers wise.
FiF said:
A question. If the Cross rail project were in Germany where do you think the project would be awarded.
Or the major elements for a new power station.
It's buggins turn there for the boilers, and you got the switchgear last time so on this one you get...
All in smoke filled rooms, metaphorically speaking.
In theory every public sector organisation in Europe is bound by the ojeu process which is a Europe wide agreed process for large public sector procurements. It measures both cost and value for money (as well as how well the requirements are met obviously). So if the tender took place in Germany and a uk company put in the best bid, it would be awarded to the uk company. Here is the ojeu process:Or the major elements for a new power station.
It's buggins turn there for the boilers, and you got the switchgear last time so on this one you get...
All in smoke filled rooms, metaphorically speaking.
http://www.scotland.gov.uk/Resource/Doc/1265/00517...
Transmat said:
For example, government spend about 20bn on IT, and the cabinet office are adamant that they are being ripped off by large IT companies such as Microsoft, oracle, IBM, Cap Gemini, Atos etc. They are partly right as there are huge deals by the same company sold multiple times to multiple agencies, however each has their own specific requirements, and therefore you cannot price each deal the same - especially when government seem to think they are special compared to the private sector and want everything gold plated.
There is also colossal client-side mismanagement in many of these IT projects. Everything from failures at the initial brief, needless, lazy late delivery of time-critical input during the project, through to ineffective use of systems once implemented which, in part, is due to the mania for 'change' from above.HP/EDS.
Always bid cheap to the CFO. Sell with the "A team". Deliver with the "Z team".
The irony is that they are often delivering to contract.
The problem is one of pride. The COO/CFO tell the organisation that they have found a great technology partner, etc, vision for transformation, improved services, etc... the gold plated contract.
When in reality they bought the bronze service as the cost point was too attractive to the CFO. An immediate mismatch so everyone ends up disappointed.
Oh, and the reality is that with 3rd/4th generation outsources there isn't that much inefficiency that can just be squeezed from IT - you need to look at the business process as well that is driving the consumption of IT. To often treated in isolation.
Always bid cheap to the CFO. Sell with the "A team". Deliver with the "Z team".
The irony is that they are often delivering to contract.
The problem is one of pride. The COO/CFO tell the organisation that they have found a great technology partner, etc, vision for transformation, improved services, etc... the gold plated contract.
When in reality they bought the bronze service as the cost point was too attractive to the CFO. An immediate mismatch so everyone ends up disappointed.
Oh, and the reality is that with 3rd/4th generation outsources there isn't that much inefficiency that can just be squeezed from IT - you need to look at the business process as well that is driving the consumption of IT. To often treated in isolation.
Digga said:
here is also colossal client-side mismanagement in many of these IT projects. Everything from failures at the initial brief, needless, lazy late delivery of time-critical input during the project, through to ineffective use of systems once implemented which, in part, is due to the mania for 'change' from above.
Yes massively. In fact I'd say this was a bigger problem than dodgy contract management from the vendor side.Public sector vendor management is absolutely shocking, most have no clue whatsoever, they just shove together a rubbish set of requirements, don't bother to properly manage it then moan years later when they are suddenly told by the business that IT is inflexible and they all want mobility or cloud and IT and procurement discover their crap sourcing contract means there is no flexibility and the costs are about to go through the roof for a new change management program.
The arrogance in public sector procurement kills me sometimes.
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