Government/Public sector procurement systems, bit of a rant.
Discussion
They've made a fair bit of noise about this recently...
What a load of old horse poo.
GCAT / Catalist and all the rest... what an absolute shower of poop.
A public sector client has said they are now going to do all their procurement via a particular government "approved" organisation, so we apply to get on the list of suppliers... next round of applications? 2012.....
FFS
We can quite easily compete on price and service with all the big boys on those lists, and potentially can save money for the public sector bodies doing the spending, but never get a look in because its essentially a closed system.
The whole system is full of price fixing, back handers and is, as far as I can see, utterly corrupt.
To make matters worse, most of the procurement people we deal with in the public sector are actually fairly switched on, and wise to this too. They would gladly purchase elsewhere for better service and pricing, and know they could easily save money by using other suppliers, but their hands are tied and they are forced to use whatever procurement system management have chosen.
For all the small business "help" that is supposed to be available they've completely cut most or all of them out of the procurement process for the public sector.
No real point to this, just getting it off my chest...
What a load of old horse poo.
GCAT / Catalist and all the rest... what an absolute shower of poop.
A public sector client has said they are now going to do all their procurement via a particular government "approved" organisation, so we apply to get on the list of suppliers... next round of applications? 2012.....
FFS
We can quite easily compete on price and service with all the big boys on those lists, and potentially can save money for the public sector bodies doing the spending, but never get a look in because its essentially a closed system.
The whole system is full of price fixing, back handers and is, as far as I can see, utterly corrupt.
To make matters worse, most of the procurement people we deal with in the public sector are actually fairly switched on, and wise to this too. They would gladly purchase elsewhere for better service and pricing, and know they could easily save money by using other suppliers, but their hands are tied and they are forced to use whatever procurement system management have chosen.
For all the small business "help" that is supposed to be available they've completely cut most or all of them out of the procurement process for the public sector.
No real point to this, just getting it off my chest...
There's a lot of companies that are on the preferred supplier lists that are taking a cut to act as a conduit for companies not on the list. Seems like a waste of cash but it's a way in and you you can get your product in there you should have more of a chance of making on to the list next time it goes to competition.
RizzoTheRat said:
There's a lot of companies that are on the preferred supplier lists that are taking a cut to act as a conduit for companies not on the list. Seems like a waste of cash but it's a way in and you you can get your product in there you should have more of a chance of making on to the list next time it goes to competition.
Been there, done that...Typically these relationships last 6-8 months before the "listed" company gets smart and tries to up their margins, and we loose the business.
Very frustrating, as typically we would do all the ground work, pre-sales, evaluations etc, and use one of the listed co's as a conduit, by this point we know exactly what the customer is expecting to pay, and exactly what price will win the deal when it goes to tender. Then some smart-arse account manager decides to stick an extra point or two on top so he can hit a target, and the deal goes elsewhere.
Happened time and time again, and the listed co's treat the smaller suppliers like their little b
h, which isnt a lot of fun either.But it's what we're stuck with at the moment.
We're currently looking to employ some one legged, midget, lesbian, single mothers from an ethnic minority, once we get a couple of those on board we're guaranteed a place on the list!
davido140 said:
The whole system is full of price fixing, back handers and is, as far as I can see, utterly corrupt.
This subject is very much my bette noir at the moment. Spent a lot of time looking at this and I don't think it's corrupt. It's just that public sector procurement is exceptionally poorly executed. It's intent is to provide best value but in truth, it's about removing risk and responsibility.It seldom provides best practice and is flawed at just about every level.
For example...
Tenders that state scoring is 40% cost, 60% experience/quality. You would think that if you were not the cheapest, you could make up the difference on quality. Not so!
Let's say 5 companies bid for a contract worth around £100,000. The most expensive company quotes £99,000. The cheapest quotes £98,500. The calculation of percentage points is based upon the spread of costs so the cheapest scores 40% and the most expensive (even by just 500 quid) gets 0%.
The cheapest quote then may only score 25% on experience and skills and the most expensive may score the full 60% but the cheapest wins the contract by 5%!
Nobody (and I have asked many times) has been able to explain to me how this delivers "best value".
For consultants, it gets even trickier. We are often asked to provide an hourly rate which we know to be high compared to others. However, we also know we can deliver work far quicker than our nearest competitors and until we see a brief for a bit of work, we have no way of telling how much time is needed anyway.
We have in the past lost contracts due to a high hour rate. It's tempting to quote a stupidly low rate then spend a stupid amount of time doing the work to make up the shortfall.
Poor old public sector, always getting the bad press.
Meanwhile in the "real world" a very large and successful multinational I know of is just setting up its global procurement operations in Germany, amending all payment terms to 180 days, and charging the vendors a service fee of 4% of invoice totals.
It's not nice out there at the mo...
Meanwhile in the "real world" a very large and successful multinational I know of is just setting up its global procurement operations in Germany, amending all payment terms to 180 days, and charging the vendors a service fee of 4% of invoice totals.
It's not nice out there at the mo...
StevieBee said:
prand said:
and charging the vendors a service fee of 4% of invoice totals
Happening in the public sector too.Not a problem though. Everyone just raises their fees/costs by 4%. Hell, why not make it 8% to cover OUR costs?
Also, 4% !!!!!!!!!!!!!!
On a Large IT order you are doing well to retain a 5% margin, 3-4% is not uncommon.
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