OJEU debate misses the point

2 September 2010
Peter Smith, director of Procurement ExcellenceI’m going to pick up on Dave Henshall’s blog from last week, looking at some of the comments that were made by readers of Dave’s piece (so thanks to those who influenced this). I’m afraid the entire debate of whether government should abandon the OJEU, while interesting, started from a false premise. Having spent the weekend at the Reading Festival, it is a bit like me starting a debate about whether I would prefer to be lead guitarist for the Arcade Fire or Blink 182. It passes the time amusingly but doesn’t really have any relationship to reality. And so it is with debates about “abandoning” the EU procurement process. We can’t stop using it unless we withdraw from the EU (as Graham Crook pointed out in the comments). And let’s get real on that; I reckon anti-EU parties won about 5 per cent of the election vote in May. I would like to see a real debate about the EU, particularly at a time when government spend is being cut, why isn’t our contribution to Europe under the same scrutiny? But that’s a separate issue. And (as Roy Ayliffe pointed out) we should stress the rules are not for the benefit of procurement people. They are to reflect EU Treaty principles, such as open access for all EU countries, fairness and transparency. But in any case, what do you really think would happen if there were no rules? A golden age of informed, smart procurement people running open, but rapid and low cost procurement competitions? Or councillors awarding contracts on the basis of “they’re a local firm, supporting local employment” (the subtext of which is, in my experience, “and I play golf with the MD every Saturday”)? Or departments awarding outsourcing contracts on the basis of “we need to move quickly to realise the savings. IBM/EDS/Accenture are clear market leaders in this area so there was no need for full competition”? I know which I believe is the more likely, and of course how suppliers would react to the suspension of overtly fair procurement. I remember before the election a group of business leaders sent a letter to the Daily Telegraph saying that “arcane procurement rules” caused inefficiencies. I speculated at the time in my blog that Justin King at Sainsbury’s – one of the signatories – would “be straight in to see the permanent secretary within hours if Tesco were awarded some huge food supply contract without proper and fair competition”. The rules also help the fight against corruption. The private sector manages without OJEU, but then what might be defined as “corrupt” procurement is pretty common in private business. That ranges from really dodgy stuff, to the CEO being taken to Glyndebourne by the investment bankers who just earned £5 million advising him badly on a botched takeover. There is still corruption in the public sector, but I believe it is more prevalent in the private - we just don’t get to hear about it. The EU rules make fraud less likely, not impossible (read Private Eye’s Rotten Boroughs column for a regular eye-opener). So let’s change the terms of the debate. OJEU and the other rules aren’t going to disappear or be abolished by this or (probably) any other government. Let’s talk instead about how we should work within them in a more effective and efficient manner. Let’s ask why are so many organisations so bad at running compliant EU procurement processes? Let’s ask why do they take nine, 12 or 18 months to run competitions the legislation allows to be done in about three? Why do we see 25 page PQQs for £50,000 projects, or tenders that require hundreds of days’ work for relatively straightforward requirements? Why was a recent competition to put in place a framework for procurement consultancy delayed and ended up taking almost 18 months - just for something that arguably duplicates a Buying Solutions framework, doesn’t guarantee a pound’s worth of business and will require further mini-competitions? Another example of the misconceptions around this. Michael Gove recently blamed the EU regulations (at least partially) for the complexity of the Building Schools for the Future programme. What nonsense. The chosen procurement process was complex and arguably created high bidding costs, delays and contributed to apparently high final project costs. But that wasn’t the EU process. That was officials and politicians who designed it that way. It’s a bit like the child, late handing in their history essay, saying, “Sorry, it hasn’t come back from the bookbinders yet. They’re out of pigskin”. Note to Gove and Byles, nobody in Brussels made you do it that way! (Of course Gove had no involvement in designing BSF at all so it is a mystery to me why he is blaming EU regulations rather than the previous government.) Perhaps we should start a debate around how EU procurement rules can be improved instead?
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