I was thinking recently whilst driving back to my office after meeting with a client about the frustrations that I see in the public and private procurement process.
This has been an ongoing thought process for me and it seems that the governments attempt to reduce procurement costs is just tickling around the edges. It seems to me that what we need is a radical re-think of the whole process and if done properly it should address the drive to make bidding cheaper for companies, make selection easier for customers and enable greater alignment of objectives so that everyone gets what they want from the relationship. Does that sound impossible? With a change in approach, I really don’t think so…
There seems to be a trend towards bids now inviting bidders to operate in ‘partnership’ or take a ‘pro-active approach’ to collectively solving problems…but what does that really mean? It all seems great on the face of it and who wouldn’t want a collaborative and ultimately non-confrontational relationship with a customer? The problem I see is one of joined up thinking…or not as the case may be.
I’ve often spoken with my friend, Ted Garrison, from the USA about his experiences of a 20-item list of ‘must haves’ that one of his clients issued to bidding companies. This cut across the usual (often too) detailed requirements that respondents are asked to bid against. Simply put, the bidders were asked to say how they would achieve each item on the list and to rank them in order of the likelihood that they would be successful. Their response was then scored against the order of importance that the customer had provided them with- the one most aligned with the customer’s objectives and aspirations won!
Importantly this places responsibility with the authority most likely to have the answers and the resources to achieve the objective. In the case of construction related projects this is truly design and build- the contractor is given the opportunity to design the project in the way he wants to achieve the customer’s goals, and undertake the work accordingly without interference from those less qualified to say how it should be done. Since the contractor knows his business best he will work in the most efficient manner and meet the stated outcomes at much lower cost and considerably less stress for all concerned.
So if you’ve done it right you will now have a bidder that will take responsibility for delivering your project in the way you want…or do you?
If your contract is too complicated and overly restrictive with huge penalty clauses and complex operating requirements, then the likelihood is that all the cost benefits derived from a streamlined procurement process will be lost. So it is crucial that you have a contract that is simple. You should state the roles and responsibilities or each party, the outcomes that must be achieved, and the arrangements for payment…using plain English (or your particular language) always with the idea of keeping it as simple as possible so everyone understands their commitment and obligations.
It seems to me that when you use a simple procurement process that allows bidders to shine by doing what they do best…allowing them to find solutions that uses their expertise for your benefit at a fair price…and couple it with non adversarial contracts that act as a method statement for what must happen by whom and by when, then it should be much easier to really reduce the cost of procurement and the delivery of your project.
I’d like to see a stop to the usual way of saving money by horse-trading over price with supply chains that only serves to create imbalance and the likelihood of them retaliating during busier times. Surely by thinking differently and using the expertise of the people we work with we are more likely to achieve fair gain for everyone and a shared success in the outcomes that everyone wants.
Please share your thoughts so I can develop my thinking further. I am planning to use some of this thinking on my next bid that involves a detailed competitive dialogue process.