As an SME looking to engage with central government procurement we have recently found ourselves caught in a paradoxical situation where Francis Maude’s IT project management guidelines.
These urge government procurement to have greater engagement with SMEs in order to promote the delivery of more successful IT projects – is completely at odds with the reality of recent Government Procurement Service framework requirements.
Historically, SMEs have been reluctant to engage with government procurement due in part to the onerous paperwork associated with gaining access to frameworks; with this in mind I was fairly sceptical when the MD set me the task to get CatN onto the Government Procurement Service framework. Was this going to be a massive waste of time? Did we have any hope of being able to tick all the boxes? Even if we did get through the framework acceptance process would we actually win any contracts? I was asked to track the progress I made and identify all costs associated with getting onto the framework, in order to build up a ‘price’ of getting to the point of submission of the framework document. This would be used as a case study and also to test the GPS’s commitment to minister Maude’s project management guidelines.
Before I get into the detail of the GPS framework submission, I should note that we have been a successful member of the G-Cloud 1 framework and have delivered solutions to a number of government departments over the last 12 months. We are not completely ‘green’ when it comes to government hosting frameworks, but have never set out to track all costs associated with getting to the point of submission of the documents as a case study for the feasibility of SME engagement with central government procurement in the real world.
Working on the framework questions was much as I imagined, providing huge amounts of bureaucratic evidence and collateral to meet vague ideas of potential requirements over the next 5 years. Having to chase suppliers for pricing on equipment which was deemed to be obsolete even by the manufacturers themselves – with nothing more to go on that a description that the severs needed to come in ‘small’ ‘medium’ and ‘large’ – It was little consolation that the manufacturers themselves were also tearing their hair out at the prospect of needing to price these units with virtually no idea what specification was required.
There was no flexibility within the framework to make suggestions of innovative solutions or alternatives to the obsolete hardware – it was absolutely rigid. Like many other SMEs, CatN offer a number of effective, flexible and cost-efficient hosting solutions and we want to offer these to central government; our track record of delivery of hosting solutions speaks for itself.
The framework could have worked very well for SMEs, for instance the feedback system – where questions are collated and published with answers on a weekly basis – was very good and ensured that there was a single source of answers to question in each section available to every supplier. Having free text fields to allow answers to be made in as much detail as the supplier wanted was also a flexible approach, but the rigidity in other sections such as the pricing matrix did prevent us from demonstrating alternative approaches.
When the pricing came back for a ‘large’ spec AIX server – considered to be extremely out of date even by IBM themselves – at over £2.5 million for a system which was not even specced to its full potential it was easy to see that many SMEs could never hope to gain access to the framework, regardless of the paperwork element. In many respects we are lucky to be in a position where we could approach finance companies with an excellent credit history and a government purchase order in hand and be reasonably assured that we could get funding, however it would be naive to assume that all SMEs are in the same position. In addition, how many SMEs would choose to proceed once they had seen the huge upfront costs of such hardware, regardless of whether they could fund purchases with finance?
SME culture of offering innovative solutions, often at significantly lower cost than established oligopolies, should be embraced by any central government, but for this to be a success there must be constructive engagement between the Authority and SMEs, and moves away from rigid frameworks.
Of course with the adoption of G-Cloud there are considerable moves towards greater engagement with SMEs which is very encouraging. This has been vindicated by the continuation of the G-Cloud framework into a second round of agreements. Unfortunately the framework in this exercise seemed to be filled with blockers for an SME, but hopefully as the values of G-Cloud gain traction in central government we will see greater pan-government adoption and frameworks such as this will become far more accessible for a business in our position.
Government Procurement Service
So far we have been unable to access to the framework as we do not have a current ISO 9001 certificate, this binary decision is a case in point – many SMEs will not have this standard, but it does not automatically mean they do not have strong quality management procedures. There could be the opportunity here for constructive engagement between tendering organisations and the Authority so companies who do not have the ISO standard could demonstrate their evidence for how quality management is regulated internally.
Our total costs accrued in the process of framework submission were significant; staff time, time spent with upstream supplier and product experts as well as opportunity cost of investing in the framework. It is easy to understand how the labour-intensive submission process is off-putting to many SMEs. Often SMEs have a stark choice between assigning staff to complete a procurement framework or managing sales via a normal channel. If a customer approached an SME with a series of vague requirements, no guarantee of any sales materialising and a significant upfront price tag to even be considered there would be very little incentive for any SME to submit an RFP response.
I find it hard to understand how the GPS can credibly state that they are committed to minister Maude’s project guidelines on greater engagement with SMEs while putting in significant financial barriers to entry which rule out all but the largest players in the market – directly contradicting Francis Maude’s statement that ‘The Government will also put an end to the oligopoly of large suppliers that monopolise its ICT provision’?
Perhaps they believe that ISO 9001 is simply a standard but to really drive innovation collaboration on the scope of the standard actually required and intelligent buying is going to be needed.
If a level playing field is what the GPS is seeking to implement then it’s great news for SMEs, but it can feel frustrating that this sea change will not happen quickly; for example, exploring whether it would be effective for the Authority to send out some civil servants to visit SMEs seeking to get onto frameworks to engage with us in a face to face dialogue and help us understand how we can work together. It is in the interests of both parties to promote constructive dialogue, and can often promote cost efficiencies as both parties will better understand one another.
Until more SMEs engage with these frameworks (which are not promoted as being ‘SME Friendly’ such as G-Cloud) and voice suggestions which then lead to constructive engagement with the Authority, the process will probably remain the preserve of the traditional SIs.
In summary, the project was not a ‘failure’. I learned a great deal about frameworks, we now have a benchmark cost for getting to the framework submission stage, and we have submitted a number of concerns to the Cabinet Office ‘mystery shopper’ scheme which I hope will result in these framework processes being made more accessible to SMEs in future. Frameworks such as these require a good understanding of the sort of supplier which government aims to attract – SMEs need to have the flexibility to demonstrate how they can challenge prescriptive approaches which larger suppliers are more used to. If government procurement can take these suggestions on board I believe they can procure more effective solutions in a smarter way, cut costs and see a great improvement in successful project delivery.
Very good post pointing out some of the issues with procurement. It’s not just government either – this spreads throughout the public sector where unnecessarily complex tendering processes are put in place for even comparatively small pieces of work. As you say it can cut out the creative part of client/supplier relationships and although is claimed to be fair I am not convinced as scoring matrices can be manipulated to prove anything. What is also happening is that these processes are creating a large amount of wasted work and effort for SMEs to meet the PQQ and Tender requirements which often involve not only a large burden of admin but also speculative work which we can ill afford. This is the real problem for SMEs rather than the myth of general Red Tape.
Thanks for the comment Brian!
I completely agree with you, having been involved in the tendering process for a number of local and county council hosting contracts in addition to the GPS framework I discuss above, we know how complex these pieces of work can be made. By stifling SME’s ability to demonstrate creative and innovative solutions through prescriptive tender processes the real losers are the Authorities themselves.
The upfront administrative burden is a huge blocker to SME engagement with government procurement. Examples like this just serve to reinforce that preconception amongst SMEs who may be in a position to offer effective and disruptive services but chose not to put themselves through the perceived torturous process.
Interesting, this framework has now been cancelled based on similar feedback received from other SMEs – I’ll shortly be blogging about this and making suggestions on how these frameworks can be made more inclusive in future.
Having been a police officer “customer” trying to get what I wanted/needed through Force procurement system and, since leaving, having worked with a very specialist SME trying to provide high-quality, project-proven, operational support services to the police, only to find the whole procurement system utterly loaded against SMEs as you describe (ISO9001; various other “kitemarks”, impossible (and utterly irrelevant for service being procured!) financial requirements…), I have concluded that Governments (not just this one) are lying.
They are simply not interested in doing business with SMEs – the whole system is set up to give a sheen of respectability to their desire to give public money to their mates in the massive multi-national oligopolies who, in turn, give large portins of it back to the politicians in donations, freebies, etc.
Utterly, utterly corrupt from start to finish! (If not, how come devastating failure is consistently rewarded with yet more public sector contracts??)
Some good points made here about timescales and the effort SME’s are expected to spend on speculative procurement. The system is generally presented as “inclusive and open”, when its not. I have worked with SME’s through procurement and they genuinely try to show interest to compete, even at the risk of disclosing commercial sensitivies and undermining SME’s expertise. If it is merely a paperwork gathering exercise to show competency to actually complete the procurement submission rather than the focus of the bid submission. Okay so, you do have to do some work to prove you know what your talking about, but whilst raising standards is important, so is a sense of active fair play and when that goes – so does SME interest and engagement.
shows why government cost are so unrealistically high & also why they can not reduce them,protectionism of the beast of incompetence & wastefulness,some call it corrupt