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back to article Crumbs, we're going to lose that public sector bid - Jeeves, send for the lawyers

The number of complaints raised by businesses over the awarding of public sector contracts has more than doubled over the last year, according to new figures. According to data released by the Cabinet Office following a freedom of information request by Pinsent Masons, the law firm behind Out-Law.com, business complaints about …

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Silver badge

Failure is not an option ... it's a distinct possibility

> For example, businesses will complain about the procurement strategy that public sector body is following if they think that strategy favours their competitor

Remarkable! You'd expect people or companies who felt they were being discriminated against to just sit quietly and let it go.

I wonder if the Cabinet Office, who investigate these complaints could ever come to the conclusion that most of them (In 19 per cent of the cases investigated no serious concerns were found) - the other 81% - DO actually have merit and the fault could simply be that the officials responsible for drafting the bids are a bunch of clueless bureaucrats who have no idea about what they want, how business works or even what is technically possible.

It could also help to explain why so many government projects are so utterly flawed.

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You have to wonder how this can be value for money for the public. Is the private sector really that much more efficient that it can overcome all these additional costs of the bidding process, contact monitoring, as well as taking profit and paying executives salaries and bonuses.

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A lot of the procurement that goes on by tender is for equipment and services, rather than IT development. Sure the IT development stuff is doomed to costing beelions with a reasonable chance of failure, and not just because it's the public sector.

The equipment and service purchases, on the other hand ought to provide the buyer with a good route to selecting the best product at the best price. Unfortunately they are often written up to favour a particular product or supplier, because really that's what the customer wants to buy and the tender process is an irritation that needs to be dealt with along the way.

Rightly or wrongly, if you are not the pre-selected winner, you are going to have cause to complain.

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@Steve Murphy

The evidence is available as to if its value for money for the public. But I guess they tendered out the analysis of the data and the people who make a killing out of this said it was fine.

I think anyone who hasn't been inducted into the church of capitalism can see otherwise.

Economics these days makes social science look good!

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Facepalm

Re: @Steve Murphy

@Tom 7

"The evidence is available as to if its value for money for the public. But I guess they tendered out the analysis of the data and the people who make a killing out of this said it was fine.

I think anyone who hasn't been inducted into the church of capitalism can see otherwise."

There is nothing wrong with capitalism. That is why it served us well in the past. The problem is that british govs have a bad habit of demanding more control and interfere. As a result we have endless failure and people spending our tax money on covering up their mistakes and stuffing it in their pockets. I see plenty comments claiming capitalism is bad but yet it is the moving away from capitalism that causes many of the problems.

I am not saying capitalism is a silver bullet but we cant really complain about it in this country as we dont have it. We have gov busybodies failing to do the many extra tasks they take on. Economics these days are a dangerous mix of saying we are capitalist, shafting capitalism with a very big stick and then crying that capitalism caused all the problems.

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Anonymous Coward

Its not about efficiency its about balancing the books and hiding costs.

I worked for a government department that was privatised purely because the cost to upgrade the archaic hardware installed by the previous contractor when their contract run out would be roughly £1-5million.

This hardware upgrade cost would then be the private owner's responsibility which would then be included in the contract so as not to show a huge spike in outgoings on the department budget.

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Re: @Steve Murphy

Capitalism is a huge problem for procurement contracts. EU directives state that the main factor for handing out a contract has to be cost (makes up roughly 70% of the scoring), so as long as the boxes are ticked whoever offers the lowest gets the contract.

This leads to companies such as Fujitsu (I've worked for a government department that had them as a contractor) who offer the lowest upfront bid to get the contract but keep the aftermarkert support gimped because it has no significant weighting on the result. That way Fujitsu get the contract, build products to fail and charge the government agencies over-the odds for technical support that wasn't included in the original brief.

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Anonymous Coward

Its proving you were hard done by that's the trick. When we missed out on a tender to provide a product to the NHS, we had scored highly in quality ( the highest) and specification but lost out overall because we came behind a competitor on price.

Said competitor had an established relationship with the tendee and possibly knew exactly how much the market would bear.

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Anonymous Coward

Re: @Steve Murphy

"There is nothing wrong with capitalism. That is why it served us well in the past."?

Explain!

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Bronze badge

Re: @Steve Murphy

@AC

"Explain!"

I think it would be for you to counter the statement if you dont agree. And feel free not to agree, but what are your reasons?

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Boffin

Re: @Steve Murphy

"Economics these days makes social science look good!"

Economics is classed as a social science.

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That's nothing to do with special relationships, EU guidelines are that cost has to be the primary decider for who wins the contract. Cost makes up about 70% of the scoring and not adhering to that is a breach of fairness. If the NHS gave you the contract your competitors could have appealed the verdict and the EU would side with them.

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Facepalm

"Hyper-competitive businesses file ever more complaints over public sector tenders"

Doubtless a reflection of just how much gravy is pouring off the public sector procuremenmt train.

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Re: "Hyper-competitive businesses file ever more complaints over public sector tenders"

I'm sure they would also complain about the way private sector work was distributed if there were any rules about how it should be done and anyone to complain about if it was done wrongly.

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Not New

Public sector tenders are stupid and pointless. Generally they come in 2 flavours:

Tender A: The one, which has clauses in it that only <Big Company> can possible say yes to (e.g. your system must fully integrate with <Big Company Proprietary System>... which has no externally available API).

Tender B: The one where the clients don't know what they need so they pick as many tick-box requirements as they can. ISO XXXX, AAA accessibility, Investor in People, CRB ... et al. These ones are especially frustrating because those who come up with them play a game where they attend public sector conferences and talk with other tender creation people to exchange new tick-boxes. It's like swapping stickers for them.

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Anonymous Coward

small as well as big business affected

Relatively small procurement as well as huge projects are covered by tendering rules.

our (small) company put in a tender for a project. We were more than a bit annoyed to find (through the power of a google search) that the draft project protocol already assumed a competing company product would be used. Though not sufficient basis to go to war with lawyers in our case, I understand why when the stakes are high companies would exploit any chinks in the process to get an advantage or counter perceived bias.

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Anonymous Coward

Re: small as well as big business affected

Be glad you didn't win the contract, unless you are the owner/partner/shareholder in a small company a Public Sector contract is a death sentence.

For one of the government departments I worked in the contract winner was a small business, as soon as that was announced IBM bought them up, kept the contract and dissolved the company and only keeping the minimum number of staff.

A local independent computer store chain won a local council contract, they were bought out by a larger chain, the stores rebranded and closed within 12 months making all the staff redundant.

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Silver badge

Re: small as well as big business affected

Providing OTS kit to any government is a loser. The margins are insanely small (far smaller than retail) plus you have to deal with all the bureaucracy and govt people. It sucks.

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Its a sellers market

So I assume that the government is taking account of this and driving much harder bargains.

Wow I actually made it to the end of that sentence before bursting into laughter.

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Anonymous Coward

Re: Its a sellers market

Like hell we are. I worked for one of the Government's Shared Services (an attempt to consolidate back office work such as finance, HR, payroll etc.) and we had three agencies, using the same suppliers for the same products who refused to pool their buying power to get a better price because it meant relinquishing some of their independence.

When you can't get three agencies who work for the same department to agree to buying pens together to get a discount you can't expect them to capitalise on a downturn.

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Anonymous Coward

Now look here, the rules are simple enough!

Tendering for public sector gravy is easy peasy, as long as you follow a very simple rule:

Is one of Serco, G4S, Capita or Branson also bidding for the contract?

- If yes, then give up immediately as the contract might as well have been awarded already

- If no, then keep in there, as there's an outside chance the tendering process might actually be clean.

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Re: Now look here, the rules are simple enough!

There's a lot more to the public sector than the sort of big contracts you are thinking of there (and you missed out BT).

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Holmes

Re: Now look here, the rules are simple enough!

Is one of Serco, G4S, Capita or Branson also bidding for the contract?

- If yes, then give up immediately as the contract might as well have been awarded already

- If no, then keep in there, as there's an outside chance the tendering process might actually be clean.

Sorry, but I disagree. It's probably the totally screwed-up renewal of the InterCity West Coast train franchise that has led to the increase in complaints. FirstGroup were awarded the new franchise, Virgin complained about the procurement process, and it was eventually agreed that it had had serious flaws.

I'm no fan of the bearded one, but he seems to have been right that time.

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Anonymous Coward

Re: Now look here, the rules are simple enough!

Totally agree. Accenture is another one. I think the RPA guarantee them 10 million GBP change control money each year in their contract (for which Accenture have produced a crap system). 10 million. Even if there is no change control. And more money if the CC exceeds that minimum.

And for a system that requires so many staff to maintain it that they could just perform the tasks manually and it'd work out cheaper.

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Another cost of outsourcing

Regardless of whether the companies have a case or not, this just adds to the cost of outsourcing. It isn't just a case of following procurement procedures, it is a case of proving it. Therefore, an enormous paper trail must be created to show that everything was followed by the book. Lawyers need to be hired. Cases must be fought. Time must be wasted.

After taking these costs into account, it may still work out better to use the private sector, but it is still a cost.

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Go

Re: Another cost of outsourcing

Exactly.

How about this as an idea for fixing the system. If a company complains, the documentation, etc. goes to an independent examiner (I'm leaning towards judge or retired judge here). If no real breach was found, and its just the company trying to delay the tender or whatever - said company pays the costs of the investigation AND is banned from applying for all government tenders for a year (and make it stackable, so if they complain again the next year for nothing, they are banned for 2 yeas the next time etc.). Where a major breach is found, the government pays, is forced to restart the process from scratch taking into account the judges findings and the manager of the project who made the monumental cock-up/corrupt action is out on his a$$ and banned from taking employment with any company who has applied for that tender for 5 years. Where a minor breach is found, the government pays, the findings are taken into account immediately, and the process continues.

Sounds fair to me...

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Re: Another cost of outsourcing

Yes, that does sound about right. There is too little accountability in the public sector but it helps no one if every little gripe is turned into a witch-hunt.

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Silver badge

Re: Another cost of outsourcing

That would be fine except that people normally set up a new company for the specific bid they are going for.

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Go

Re: Another cost of outsourcing

Hmm... ok, ban not only the companies, but the senior executives from said companies.

It might prevent a few pump and dump exercises, as it will be harder to find work if its known that hiring a particular executive who just jumped from that previous company means your company cant bid for any of that juicy public sector gravy, i mean contracts...

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Re: Another cost of outsourcing

That's unworkable, the EU Procurement directives which every member state of the EU have to adhere to only allow companies to be prevented from consideration if the company is convicted of fraud or other illegal activities. Banning for wasting time is a breach of those directives.

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Anonymous Coward

Re: Another cost of outsourcing

"That would be fine except that people normally set up a new company for the specific bid they are going for."

Then cry like a little girl because they get knocked back in favour of someone who has more exprience/better reputation than a start up.

Let's face it if it weren't for the public sector (and we need services people) the private sector would see a huge hole if their market/finances!

You can't trust a civil servant (oiks, plebs) and you can't trust the private sector (posh boys, money grabbing scum). Who can you trust? None of the above.

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Anonymous Coward

81% valid

If even the notoriously poor internal complaints investigation shows 81% had serious concern then its a real issue.

Gov compliance processes albeit improving somewhat, basically rely on vendors being willing to sue the would be customer. Complaints normally get a token investigation followed up by a rationalisation and no redress in my experience. Unless you add in the threat of legal action complaints don't work.

So that number of 19% not having serious concern hides the fact that 81% did and that is probably a small subset of the ones where no-one thought it in their interest to accuse a customer of malpractice.

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Silver badge

Patronage!

Theyz don't haz it.

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What a surprise put a bunch of slimy, obnoxious rats in ever smaller containers and they fight with each evermore ferociously!

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Anonymous Coward

Outsourcing NEVER works

"The government has sought to outsource more in the last twelve months" which is why service levels across all departments have declined! Outsourcing never works!

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Meh

Re: Outsourcing NEVER works

Outsourcing works all the time. I know there are a lot of contractors on this site who make their living on outsourcing.

What hardly ever works though is government outsourcing of big software projects. They have no idea what they want and even if they do they are incapable of defining it. You get HUGE spec documents that take entire teams to read but the only requirement actually stated is something insanely vague thing like: Project (x) will be able to process all unemployment and disability claims.

By the time you've thrown 14.3 revisions at them and finally arrived at some concrete answers some new idiot is in office making insanely vague statements about what the system will now do. So you scrap what you've already done and start all over.

It really sucks and is really stupid.

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