The reputation of public procurement (and specifically the outsourcing of “back office” functions) has taken another beating.
Headlines to die for have been gifted to the media who love nothing better than reporting on the waste of public funds inherent in paying for services provided to dead people.
G4S and Serco are bearing the brunt at the moment – claims under their contracts with the Government amounting to “…in the low tens of millions of pounds…” for tagging the deceased, people actually in custody, people who never should have been (and never were!) tagged, etc etc.
Chris Grayling, the Minister responsible, didn’t leave the blame wholly with the private sector, however. He announced yesterday a disciplinary review of the mismanagement of these contracts by his department. Problems with the payment processes which had the potential to result in errors were discovered as long as 5 years ago but no action was taken.
With one of the two companies allegedly not co-operating in the investigation, prompting the Minister to call in the Serious Fraud Office, this is not going to go away any time soon.
So what does it tell us about the current state of public procurement?
There is probably a lifetime’s work in providing a full and detailed answer to that question, but here are a few thoughts. There is the “garbage in, garbage out” theory. You get what you procure. Too often, procurement is not regarded as a core function (both in the public and private sectors) and its business-criticality is neither valued nor understood.
This can lead to numerous fault lines. Procurement not matching requirement, practicality around delivery having no presence in the review and analysis, a failure to understand the real commercial impact of the bids into the process and procurement by individuals who have neither the experience of the operational needs of the entity in question, nor sophisticated enough procurement knowledge and expertise (to name but a few).
And this is not all down to that meme, “over regulation by Europe”. Regulation is regulation, it is not procurement – procurement is what needs to go on independent of (but in compliance with) the regulation which is in place.
Unless and until in both the public and private sector, procurement is regarded universally as a core, business-critical function for buyers and suppliers alike then disasters like this one are going to keep happening.
There are many advocates of this message in the procurement community – keep up the good work!