Category Archives: procurement

MoD rules out mutual option in reorganisation of Defence Equipment and Support arm

Posted on 06/12/2011 | 2 comments

By David Bicknell

The Ministry of Defence (MoD) has ruled out choosing a spin-off mutual as one of the three models being considered for a re-organisation of the key Defence Equipment and Support (DE&S) organisation.

Campaign4Change recently received a tip-off from an MoD insider who was concerned that the mutuals option had been ruled out.

The MoD has confirmed that there is no mutuals route, and that its three options will be:

*  A Trading Fund: where DE&S continues to be a part of the MoD but has a hard-charging regime. Its staff are civil service employees. 

* An Executive Non-Departmental Public Body: where DE&S remains in the public sector. Staff are public sector employees but not civil servants.

* A Government Owned Contractor Operated (GOCO): A private sector organisation. Staff are private sector employees with potentially some government secondees.

Asked why the mutuals option had been overlooked,  an MoD spokeswoman said, “Further to our conversation about the options that have been proposed for the future of DE&S, I can confirm that we’re not looking at mutuals. The reason for that is that simply, we do not consider it appropriate.

“We have considered a wide range of options for DE&S and centred analysis on three we believe will most suit the requirements of the organisation.  We have kept all stakeholders, including across central Government, aware of this analysis.” 

The MoD says the three options will be presented to ministers in due course who will decide on a preferred way forward.

Defence Equipment and Support (DE&S) equips and supports the UK’s armed forces for current and future operations. Employing around 20,000 people, with a budget of some £14 billion, its headquarters is in Bristol with other sites across the UK and overseas.

DE&S acquires and supports equipment and services, including ships, aircraft, vehicles and weapons, information systems and satellite communications. As well as continuing to supply general requirements, food, clothing, medical and temporary accommodation, DE&S is also responsible for HM Naval Bases, the joint support chain and British Forces Post Office.

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Posted in Campaign4Change, Defence, mutualisation, mutuals, private sector, procurement, public sector

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Officials pay supplier invoices – then raise purchase orders

Posted on 24/11/2011 | 1 comment

This morning the National Audit Office has published a report that says the Equality and Human Rights Commission, in up to 35% of cases, raises its purchase order after it gets the invoice from suppliers.

It’s unlikely that any private sector company could survive if it didn’t know what it owed, didn’t know what it had bought, and had to wait for an invoice from the supplier to raise the purchase order.

Amyas Morse, the head of the NAO, says in his report today:

“While I welcome the considerable improvements that the Commission has made in its controls over procurement, there are still areas where it needs to make improvements. In particular, up to 35% of the Commission’s purchase orders are still not raised until after the Commission has received an invoice for goods and services.

“This means that Commission staff are committing funds without going through proper processes and are avoiding some of the checking processes. Consequently the Commission does not have an accurate understanding of its committed expenditure at any one point in time.

“The Chief Executive has made it clear that he takes noncompliance with these processes seriously such that in cases of repeated non-compliance delegations will be withdrawn.”

A common practice? 

Is this absence of proper accounting worryingly common in central government and its agencies, particularly on IT contracts?

Auditors told us that in the case of NPfIT contracts they found some invoices that were paid when they came in, awaiting reconciliation with any past paperwork.

This, perhaps, ties in with the experiences of Conservative MP Richard Bacon, a member of Public Accounts Committee who, when asking civil servants for a breakdown of IT spending has, in the past, been referred to the department’s IT supplier.

On the C-Nomis IT project for prisons, the National Offender Management Service paid £161m without keeping any record of what the payments were for.

The Cabinet Office wants to cut the £17bn or so spent every year on public sector IT. But before departments, agencies and other organisations cut their costs they’ll need to know what those costs are. Maybe they should ask their major IT suppliers? We wonder if the domination of GovIT by a small number of suppliers has got to the stage where it’s the suppliers managing the civil service IT budgets. If that’s the case it is not the fault of suppliers.

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Posted in Campaign4Change, capacity building, change management, Government IT, managing change, managing outsourced services, operational issues, private sector lessons for the public sector, procurement, public sector, public services, supplier relationships

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Chief procurement officer: “40% of government contracts in September were with SMEs”

Posted on 23/11/2011 | Leave a comment

By David Bicknell

The Government has put forward the Olympic Delivery Authority as an example of procurement best practice in the public sector.

Chief procurement officer John Collington told the Cabinet Office  procurement conference earlier this week: “They have delivered the Olympics in time and on schedule in terms of the work so far and they have done so with openness and transparency.

“We in government must take the same approach, so every procurement must start with the principle, what will that supply chain look like and how will SMEs be allowed into that supply chain.”

Collington said that in September 2011, 1600 contracts, or 40% of government contracts, were agreed with small and medium sized enterprises (SMEs), compared with only 5% in January.

Coillington has promised more business with SMEs in the future, along with new commercial contractual models, more instances of re-use of equipment and systems across government and more savings and value for money.

Banned – consultants on some procurements
Government is giving more business to smaller firms

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Posted in Campaign4Change, government, Government IT, procurement, SME

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Government CIO to retire

Posted on 22/11/2011 | 1 comment

By Tony Collins

CIO reports today that Joe Harley, the Government CIO and CIO for the Department for Work and Pensions (DWP), is retiring next year.

Harley has been CIO for the DWP for seven years and just last year was promoted to Government CIO.

The DWP says on its website:

“After more than seven years of major accomplishments as CIO for the DWP and one year as the Government CIO, Joe Harley, CBE, has decided to retire from the Civil Service in the Spring of 2012.

“Joe has transformed IT in the Department which has made a huge difference to the efficiency and effectiveness of IT and of the DWP as a whole.”

Work and Pensions Secretary Iain Duncan Smith said:

“I would like to thank Joe for his significant and exceptional contribution to DWP and the Government – he has been instrumental in building reform and modernising our approach to technology.

“Joe leaves us with our highest regards having secured this Government well-placed to deliver major reform in the future.”

Harley said:

“It’s been a great honour and a privilege to have served the Department and Government over the years. It’s been a hugely fulfilling experience. I am proud to have made some contribution to improving Public Services for the benefit of the citizen and the tax payer.”

DWP Permanent Secretary Robert Devereux said:

“I want to thank Joe for his enormous contribution to the Department’s performance. He has been pivotal in establishing commercial arrangements which give value for money, and in the delivery of major changes to IT underpinning services which are critical for millions of people every day. The IT for Universal Credit, in particular, is on track. I wish him well in his retirement.”

Cabinet Office Permanent Secretary Ian Watmore said:

“Joe has accomplished great things in his time as Government CIO, having created and published a transformational ICT Strategy, along with plans of how it will be implemented.

“I would like to thank him personally for his leadership and huge contribution to Public Service and the ICT Profession across Government.”

Minister for Cabinet Office Francis Maude said:

“Joe has played an integral role in the past year whilst as Government CIO – he has led the delivery of a new ICT strategy and strategic implementation plan.

“These will ensure that the old siloed way of developing government ICT projects comes to an end, and leaves us with all departments working together to produce a fit-for-purpose and cost effective ICT system potentially saving £1.4 billion over the next 4 years.”

The process for selecting his successor, as CIO for DWP, will begin immediately. The Cabinet Office will run a separate process for the next Government CIO along with the process that is already underway to replace Bill McCluggage, the Deputy Government CIO.

Comment

Joe Harley has achieved much within the DWP – including cutting costs and helping to set up the administration, based on agile principles, of Universal Credit .

But it was always going to be difficult combining a full-time job as DWP CIO with that of Government CIO.

Harley’s retirement gives the government a chance to appoint a full-time CIO who is passionate about structural change and can build a strong public profile on the need for it.

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Posted in Campaign4Change, capacity building, change, change management, Government IT, managing change, managing outsourced services, operational issues, procurement, public sector, public services, reducing cost strategically, reforms, Universal Credit

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G-Cloud and agile briefings

Posted on 18/11/2011 | Leave a comment

By Tony Collins

On 22 November the Government Digital Service is giving a briefing for potential G-Cloud suppliers. It’ll be streamed live.

Officials say the briefing will be particularly useful to suppliers whose employees have never participated in a government tender.

At the ApplyCamp, officials will explain G-Cloud, steps in the OJEU procurement process, what information potential G-Cloud suppliers need to give, and what happens next.

The event is particularly aimed at Infrastructure as a Service, Platform as a Service, Software as a Service and other specialist cloud service suppliers. It will be held at Google, 76 Buckingham Palace Road, London SW1W 9TQ – 3pm – 5pm.

Agile TeaCamp – 24 November

Between 4pm and 6pm at the Cafe Zest, House of Fraser, Victoria St, London, there will be talks on agile. Derrick Cameron, MD of software consultancy Eximium and COO of agile software house Procession will speak on “Becoming the Intelligent Buyer”.  Chris Parsons, a “freelance thinker, coder and trainer” will talk about the e-petitions project and the aims of the Agile Delivery Network.

Teacamps in November and December – Government Digital Service

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Posted in Agile, Business Intelligence, capacity building, change, change management, Cloud, Cloud Computing, EU procurement, G-Cloud, Government IT, innovation, Lean, managing change, procurement, public sector, public services, reducing cost strategically, reforms, SME, supplier relationships

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UK GovIT often a barrier not enabler says Cabinet Office official

Posted on 17/11/2011 | 1 comment

By Tony Collins

In an interview for UKauthority.com Chris Chant, Executive Director at the Cabinet Office and head of the G-Cloud programme,  debunks the claims of some that GovIT doing a great job and should remain largely untouched.

Chant says: “IT is supposed to be an enabler. Quite often in my experience in government IT it is actually a barrier to getting things done. That’s no way to use IT. It is supposed to support what we do.”

His criticism puts into context claims by some in the civil service that GovIT is an unpublicised success because of the ease and success of online re-taxing of vehicles, the payment of benefits to millions of people and the collection of taxes.

Chant has made clear his concern that some departments are locked into major IT suppliers through costly, inflexible long-term contracts that, in some cases, are being signed anew.

“In the main we are not delivering good quality IT to government and public sector workers. We are not delivering good IT solutions to the citizen …”

He calls for internal change and describes SMEs as “front and centre to what we need”.

“It is with SMEs that agility and innovation lie, and it is that market we are really encouraging… Good IT is not developed by spending a long time trying to work out a definitive answer, and then taking ages over delivering it only to discover it is not what we needed in the first place. It is about iteration. I have said all along that we do not have all the answers. We will develop as we go and take SMEs with us.”

Asked whether the public sector is ready for the cloud Chant replies: “No we are not. We are quite a way from that… We are very well positioned to operate in a world where our IT is delivered by multinationals but now it is a different world.”

He says that the cloud has security limitations. “It is difficult to see the cloud in the short term handling some of the higher security aspects of what we do but for a lot of what government does it’s about commodity products and we need to get people in who know how to handle that.”

The focus he says must always be on the citizen – assumptions should not start from a departmental or systems standpoint. “We will need to change the way we do things; we will need some new people and I suspect a lot of retraining. I think we will need a lot fewer people working on the client side of government IT…

“We are in really tough times and the idea that we can operate with [current] cost levels is wrong…”

Government clouds take shape – UKauthority.com.

The unavoidable truths about GovIT – Chris Chant.

Vested interests will try to stop GovIT changing.

What exactly is HM Revenue and Customs paying Capgemini billions for?

DWP signs new large contracts with HP, Accenture, IBM and Capgemini.

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Posted in Agile, capacity building, change, change management, Cloud, Cloud Computing, compliance with spending review, EU procurement, G-Cloud, Government IT, innovation, managing change, managing outsourced services, private sector lessons for the public sector, procurement, public sector, public services, reducing cost strategically, reforms, SME, supplier relationships, Value

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What exactly is HMRC paying Capgemini billions for?

Posted on 16/11/2011 | 3 comments

By Tony Collins

When the National Audit Office published a largely-positive report on HMRC and its online filing systems last month, the department received some justifiably good media coverage.

What was little noticed was that auditors were unable to get a breakdown of what HMRC is paying its “Aspire” systems suppliers Capgemini and Fujitsu for online filing.

Collect your car after a service and your bill has a breakdown of the parts used, their cost, and the cost of labour. But when HMRC pays around £8bn to Capgemini for its Aspire IT service, a clear breakdown of costs is not provided.

Says the NAO report:  HM Revenue & Customs – The expansion of online filing of tax returns:

“HMRC has a high-level view of the overall costs of ICT provision through the ASPIRE contract. It has been taking steps to improve that information and achieve cost savings. It does not yet have a detailed breakdown of the costs of online filing services, so it cannot benchmark those costs to assess their value for money.

“HMRC is currently negotiating with the ASPIRE contractors to obtain a clearer breakdown of the costs of ICT services provided.”

In case you think the NAO has made a mistake, and that HMRC must surely have a breakdown of the costs of Capgemini’s services, the NAO makes it completely clear that the Department has no such breakdown.

“The ASPIRE contract includes a rolling programme of benchmarking the prices HMRC pays for the various contracted services, including those relevant to online filing … Since 2010, HMRC has introduced new processes to improve information on the cost and use of ICT and benchmarking of key ICT service lines. These processes cannot yet provide information in sufficient detail to benchmark and challenge the cost of individual online filing services…”

Unfortunately for taxpayers it is not unusual for a department to pay its main IT supplier without having a full breakdown of the bills.

Several years ago the Conservative MP Richard Bacon asked criminal justice officials for a breakdown of costs on the “Libra” contract for magistrates’ courts IT. The Department didn’t know. So it referred Bacon to Fujitsu, Libra’s main supplier.

Fujitsu eventually provided a breakdown so vague – with high-level categories such as “network services” – that Bacon had little choice but to ask the same questions repeatedly to find out how public funds were being spent with Fujitsu.

In the end Bacon failed – and he had little support from departmental officials.

Now, about 10 years on, Capgemini is keeping HMRC in a similar level of ignorance.

Can any department be trusted with the public funds to pay its IT suppliers billions of pounds without a clear and unambiguous breakdown of what it is paying for?

A supplier’s reluctance to supply a breakdown of costs is understandable.  A clear breakdown could clear a path through the fog of supplier pricing, so it could make price comparisons easier.

It is up to HMRC to insist on a breakdown.  Its IT services have been outsourced since 1994. Shouldn’t it know exactly what it is paying billions for by now?

Chris Chant, an Executive Director in the Cabinet Office, has deplored the high costs of locked-in long-term contracts with out-of-season monolithic suppliers.  Does the Aspire contract alone make a good case for the reform of central government?

The unavoidable truths about GovIT – Chris Chant.

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Posted in business environment, capacity building, change management, Cloud, Cloud Computing, G-Cloud, Government IT, managing change, managing outsourced services, operational issues, private sector lessons for the public sector, procurement, public sector, public services, reducing cost strategically, supplier relationships

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Public service mutuals and their single contracts

Posted on 15/11/2011 | Leave a comment

By David Bicknell

The Social Enterprise Summit last week carried more words from the wise about the dangers of mutual spin-outs relying on one contract.

“Mutuals need to steer clear of relying on one contract for all their business and income” – that was the warning, apparently, from delegates and speakers at the Guardian’s Social Enterprise Summit.

Comment

Maybe I’m missing something, but how many organisations in business are happy relying on one contract for all their business and income? No business – company, sole trader, never mind mutual – is going to rely on one contract. Those mutual spin-outs that have one are out there pushing for more. They know that putting all your eggs in one basket is asking for trouble. The notion that they would rely on one contract is inaccurate. They may have the one for now, because they’ve spun out, but believe me, they’re not complacently relying on it; they’re out there hunting for others. And yes, to accommodate that hunger, contracts and procurement will have to change.

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Posted in Campaign4Change, EU procurement, mutualisation, mutuals, procurement, public sector, public services

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Making the case for “tilting the table” for mutuals

Posted on 11/11/2011 | Leave a comment

By David Bicknell

A recent get-together organised by Stepping Out discussed the landscape for mutuals and asked what needs to happen to get the mutuals show on the road.

The discussions are summed up in this well argued blog by Craig Dearden-Phillips.

A few paragraphs caught my eye:

“The general view in the room is that financial weakness – in the form of small balance sheets – is a disadvantage facing spin-outs tendering for contracts. There appears to be a truth that when tenders come up, this sector struggles to show the financial ‘leg’ necessary to get nervous public sector commissioners into bed. Instead they bee-line for safer-looking super-providers. Some would argue that social enterprises should be ‘gifted’ public assets in the form of property to address the balance sheet issue.

“Therefore, to what extent Government should ’tilt the table’ and if so how was one of the talking-points. There is a natural reluctance in many quarters of too much government intervention in markets of any sort. ‘Best is best’ is a common watchword in the world of public procurement. How to behave in markets is also a big question for spin-out organisations. Are they best, in the longer term, to partner up or even fold-in larger healthcare groups in order to gain efficiencies and achieve long-term stability? Or is this too much of a compromise that would water down their raison d’etre as socially focused organisations?

“This one of the unresolved questions facing spin-outs in this sector, particularly as they come up head to head with organisations whose chief competencies lie not in actual service delivery but the winning and fulfilment of contracts, often with third party deliverers.”

The blog makes some good points and appears to sum up the key issues facing mutuals.  To deliver any sense of a future for spin-out mutuals, the question is not whether to tilt the table, but how and when.

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Posted in change, mutualisation, mutuals, outsourcing, procurement, public sector, public services, Uncategorized

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SaaS or Cloud SME? – get in touch says Cabinet Office official

Posted on 11/11/2011 | Leave a comment

By Tony Collins

Chris Chant, Executive Director in the Cabinet Office working as Programme Director for the G-Cloud initiative, says in a blog post that “if you are an SME and you have a SaaS or other cloud service that government might use – we want to know about it”.

Chant says the government is changing the way it buys and uses IT. “We have trained our suppliers and ourselves to think that we need big, complex solutions to complicated problems; which has meant that all too often it’s only the big, complex suppliers that get a look in.

“We are changing all this. We are giving SMEs and ourselves a chance to work together by levelling the playing field for all IT suppliers.”

Chant says it won’t happen overnight and mistakes may be made.  “This is new territory for many departments and very few are experienced at handling this new way of working.

“I think it’s fair to say that many just can’t see how this can happen yet though
many know it must.” Government users are not so different to others.

“First off government has realised that it’s not that different. From now
on, if government wants some IT,  it needs to do what everyone else does and look  at what’s already available, not just what we can pay to have built for us and not just what we are used to doing.

“It will be uncomfortable, uncharted territory for many but it must be done. It is unacceptable for things to remain the same. So if you are a SME and you have a SaaS or other cloud service that government might use – we want to know about it.”

Chant says that government will use open standards wherever it can, and buy IT on pay-as-you-go or short term contracts.

“Some contracts may be longer but there must be a break option, in my view, at no later than 12 months.

“Of course organisations will offer lower prices for longer lock-ins but, as I’ve said before, the cost of being unable to exit will almost always outweigh the savings.”

Chant says that if you are an SME, any supplier that’s never worked with government, or an existing supplier that “gets” cloud “you are the type of people we need to work with the deliver the savings all of us need”.

Talk to us, he adds.

Chris Chant’s blog post.

Vested interests will try to stop GovIT changing.

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Posted in capacity building, change, change management, Cloud, Cloud Computing, EU procurement, G-Cloud, Government IT, innovation, managing change, open source, procurement, public sector, public services, reducing cost strategically, reforms, SME, supplier relationships, Uncategorized

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