In need of fire power

14 September 2010
We cannot comment on why the National Audit Office did not accept some of the savings claimed by Firebuy for fire risk safety items, without knowing the benchmarks. But the problems of Firebuy are typical of similar consortiums in the health service, local government and police. There have been continuous efforts to standardise requirements, to prevent maverick buying in such groups. But the co-ordination of this has not been successful and poses significant policy issues. As Firebuy indicates, it does not have the power to make local fire and rescue services use its contracts but has to rely on persuasion, and mandating a central procurement service has not worked in the past. Each service currently specifies its requirements, has its own budget and is supported by its own in-house buying team. There is a lack of enthusiasm to support a central buying unit. Technical advisers do not wish to agree common specifications but promote their own views and buyers may fear redundancies as a result of centralisation. Thus the in-house overheads remain and are not necessarily separately identified. At the same time the central body has to recover its overheads which can be clearly established. These are often met with an on-cost or rebate from a supplier which appears to increase their price so there is not a fair comparison of costs. All suppliers know they will have second bites of the cherry by quoting to each of the services separately. The central organisation cannot guarantee a level of business or compliance by the services and, as a result, does not obtain the most competitive price. But their price is used as a benchmark by the various services who do not count the costs of duplicating requests for quotations or meeting suppliers. The service buyers may also not be considering whole-life costs but merely the buying price between suppliers. Divide and rule might suit the suppliers. The higher the spend does not necessarily mean a lower price is obtained. At the same time suppliers do not see any benefits which would arise from reducing sales and administrative effort or having a standard specification and continuity of production. Is it really impossible to have standard equipment, uniforms, fire engines and other service items and must all users have variations? What are the quantifiable and unquantifiable advantages of having common standards? Firebuy may be able to gain more support from its product working parties or by appointing lead buyers in the various services where the product expertise is high. Ultimately, however, government needs to clearly determine its policy in co-ordinating procurement. And it needs to support it by giving power of direction to these central buying units in order for them to succeed in making the savings which undoubtedly are available and necessary.
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