Council spending

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Discussion

Mojooo

Original Poster:

12,783 posts

181 months

Friday 9th March 2012
quotequote all
Your thoughts on this:

Local Authority needs to buy an item. 2 suppliers have the correct item.

Supplier A is offering it for £70

Supplier B is offering it for £60

Supplier A is within the LA boundary area. They are £10 more expensive but is it worth spending the extra to keep the money within the LA area and help (in this case) a medium sized business in its own locality.

Supplier B is outside the LA area but is obviously cheaper.

Which should they use?

If you say Supplier A where is the line drawn in terms of extra expense? £20 £50 £100 £1000 ??????

12gauge

1,274 posts

175 months

Friday 9th March 2012
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They'll use whoever gives the most kickbacks, probably. Thats generally how it works.

Derek Smith

45,807 posts

249 months

Friday 9th March 2012
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Read Rotten Boroughs in Private Eye. That will explain that the returns of tenders have nothing to do with which supplier they select.

hyperblue

2,803 posts

181 months

Friday 9th March 2012
quotequote all
B, or you are using taxpayers money to subsidise an uncompetitive business, which will most likely fail in the long run.

Mojooo

Original Poster:

12,783 posts

181 months

Friday 9th March 2012
quotequote all
12gauge said:
They'll use whoever gives the most kickbacks, probably. Thats generally how it works.
Somewhat cynical - but not the case in this instance!




Oakey

27,610 posts

217 months

Friday 9th March 2012
quotequote all
If B are selling for cheaper and stll able to turn a profit then maybe A is overpriced?

Mojooo

Original Poster:

12,783 posts

181 months

Friday 9th March 2012
quotequote all
Oakey said:
If B are selling for cheaper and stll able to turn a profit then maybe A is overpriced?
Perhaps B are a bigger company?

The point is, Councils are very much encouraged to promote growth in their area etc - and they do indeed spend a lot of raw money on 'initiatives'.

I wondered whether they chould/should just spend raw money on supporting businesses directly when they could - but obviously not at any cost - i.e if a business is obviously far more expensive than a competitor.

richyb

4,615 posts

211 months

Friday 9th March 2012
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My experience is that there is no weighting for locality in council procurement. For larger tenders they are actively encouraged to seek applicants from all of Europe.

As someone mentioned it is unfortunate but there is often someone getting a kickback of sorts somewhere along the line.

Du1point8

21,613 posts

193 months

Friday 9th March 2012
quotequote all
Mojooo said:
Oakey said:
If B are selling for cheaper and stll able to turn a profit then maybe A is overpriced?
Perhaps B are a bigger company?

The point is, Councils are very much encouraged to promote growth in their area etc - and they do indeed spend a lot of raw money on 'initiatives'.

I wondered whether they chould/should just spend raw money on supporting businesses directly when they could - but obviously not at any cost - i.e if a business is obviously far more expensive than a competitor.
You sound like you would have voted bombardier for the trains, even though they can't cope with the UK order and the non UK company that got the contact have a reputation for developing better trains and keep to deadlines with deliverables and cost.

Supporting the UK despite it not being what the customer actually wants.

Mojooo

Original Poster:

12,783 posts

181 months

Friday 9th March 2012
quotequote all
Du1point8 said:
You sound like you would have voted bombardier for the trains, even though they can't cope with the UK order and the non UK company that got the contact have a reputation for developing better trains and keep to deadlines with deliverables and cost.

Supporting the UK despite it not being what the customer actually wants.
Well I couldn;t say for sure as I don't know the ins and outs but on the sounds of it is a different question altogether.

Clearly if you are tendering for multi thousand pound contracts you go for value/quality but when we are talking small sums for exactly the same product then there might be some value in keeping spending within a local area.

I suppose the bottom line is that it is hard to quantify any benefit to the local business/area whereas its very easy to quantify the spending differences.

BlueMR2

8,665 posts

203 months

Friday 9th March 2012
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Where they buy from will have been pre chosen based on who on the board knows the highest person in government and will probably be 25%-50% more than local companies.

Du1point8

21,613 posts

193 months

Friday 9th March 2012
quotequote all
Mojooo said:
Du1point8 said:
You sound like you would have voted bombardier for the trains, even though they can't cope with the UK order and the non UK company that got the contact have a reputation for developing better trains and keep to deadlines with deliverables and cost.

Supporting the UK despite it not being what the customer actually wants.
Well I couldn;t say for sure as I don't know the ins and outs but on the sounds of it is a different question altogether.

Clearly if you are tendering for multi thousand pound contracts you go for value/quality but when we are talking small sums for exactly the same product then there might be some value in keeping spending within a local area.

I suppose the bottom line is that it is hard to quantify any benefit to the local business/area whereas its very easy to quantify the spending differences.
supporting local industry by opting to pay an extra £10 on a singular item would be crazy... you would buy it from the cheapest place.

If it was a bigger thing then questions can be asked, but over £10.... no

Mr GrimNasty

8,172 posts

171 months

Friday 9th March 2012
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You ask supplier A to match B, then ask B if they want to beat A, then ask A........

Edit. My mistake, it's the council, so you tell B they're too cheap and you have to pay £50 extra or you lose the budget next year.

voyds9

8,489 posts

284 months

Friday 9th March 2012
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C the one who they play golf with irrespective of price.

1981linley

937 posts

148 months

Friday 9th March 2012
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D. In the case of schools they buy from the only catalogue they are allowed to, which is invariably double the price for every item.

sd477667

223 posts

150 months

Monday 12th March 2012
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Tell A if they price match B the deal is theirs


Bing o

15,184 posts

220 months

Monday 12th March 2012
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E. Buy it from a US/German company with a sweatshop in India/China/Vietnam.

hedgefinder

3,418 posts

171 months

Monday 12th March 2012
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you forgot to mention that the council department in question only "needs" to buy the item as they have a large ammount of money left in their budget for that tax year and as the tax year is coming to a close they want to get rid of the funds to guarantee they wont have their spending budget cut for the following year...

as an example fo such disgraceful waste of public money -
My company was called in to look at replacing the "tea/coffee station" at a local council office.
I arrived to measure up to find a reasonably new set of cupboards,sink,tap and worksurface (indeed I was told they were only 2 years old!). Bear in mind this was only for people from within the office to make cups of tea or coffee at. When I asked why they wanted a solid GRANITE top with undermounted sink and new units I was told it was because they had several thousand pounds left of that years budget and they needed to spend it quickly before the end of the budget year or face having their future budget cut!
I also know another department that bought new laptops for everyone then 6 months later bought all new laptops again due to it being within the following budget year...
I guarantee more money is wasted by local authorities in this manner than any of use dare consider...

StevieBee

12,967 posts

256 months

Monday 12th March 2012
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The correct 'technical' answer is that the council should choose the option that offers the greatest value to the council. In reality, this means, whatever is cheapest.

Inward Investment is a lovely notion spouted by politicians and council members but the officers responsible for procurement often have no power to deliver this in reality.

In 1999, Essex County Council appointed a Facilities Management company to handle the procurement of a wide range of services including printing. Up until this point, the council had placed almost all its quite hefty print orders within the county and many local business had thrived on this. Within two years of the FM company taking over, almost all of the printing was done either in Yorkshire or Poland with printers that the FM company either owned or had a stake in resulting in at least four sizeable printing companies folding, one a family run firm that had been in business for over 100 years.

But, hey, at least the council was getting good value!

oyster

12,639 posts

249 months

Monday 12th March 2012
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anonymous said:
[redacted]
What if supplier A is foreign and supplier B is British?
What if the British supplier was £600,001 and the foreign one was £600,000?