Scale without impact: government procurement today

The procurement process today is as inaccessible as it has ever been

Government doesn’t have a great relationship with small and medium-sized businesses. That’s especially true for digital delivery

But if it’s going to prioritise outcomes over processes, it will need specialist expertise often only found in SMEs. And that’s going to demand a radical reform of procurement.

Make procurement accessible again

The procurement process today is as inaccessible as it has ever been.

The first hurdle for most SMEs are the frameworks – the agreements businesses sign up to that enable them to bid for work. The default today are ‘closed shop frameworks’ – multi-year frameworks that prevent new suppliers from signing up for years at a time.

These frameworks are weighted so strongly in favour of incumbent suppliers that many businesses our size don’t bother exploring any further. And winning work through them is a further challenge.

Let’s assume we’re signed up to some of these though. If I want to find out what new contracts might suit dxw, I have to keep an eye on upwards of 40 different procurement portals. For each new tender, I have to cross reference several documents to understand who the work is for, what they need, and how much a contract is worth. This will be on a closed portal, which is impossible to share with colleagues.

There’s no way to automate or aggregate the information, because every piece of information I need is in a document, behind a login, with no consistent standard adhered to across different buyers.

All of that means that dxw has to hire people to analyse and understand what work we could apply for. That vast amount of manual labour is a hurdle most SMEs can’t overcome, regardless of how good their team is.

The high-water mark for openness was probably 2017. At that point, government had invested significant energy into making digital procurement more accessible for suppliers.

The GCloud and DOS frameworks were a relatively lightweight way for businesses to declare their fitness for contracts. These contracts went out through the Digital Marketplace, an open platform for bidding for work. It was relatively easy to sign up to be a supplier, and new opportunities were published in the open. With one link teams could quickly get a sense of what the work involved and whether they’d be a fit for it.

This procurement strategy was designed to do two things. First, break the stranglehold a small collection of suppliers had on government services. Second, enable a proliferation of smaller contracts looking for targeted, outcome-based delivery.

These changes made a meaningful difference to the range of suppliers government worked with. For a time it felt like a genuine ecosystem: expertise moved in and out of government, and the focus really was on what users need.

We’re a long way from that now. But it’s a precedent: government could consolidate and open up procurement again. Dynamic Purchasing Systems could become the standard frameworks for digital opportunities, and a shared platform would make applications significantly easier (not to mention cheaper for government).

It would be a powerful signal that the digital economy matters to government.

Stop prioritising process over product

Another sign that something’s awry can be found in the detail of contracts.

Digitally mature buyers – departments like the Ministry of Justice – empower teams to deliver services in whatever way works for that team. Although our teams need to align on software choices and other departmental standards, they’re trusted to deliver outcomes they’re on the hook for.

That’s not common. Departments desperate to prove their digital credentials put all sorts of requirements into contracts.

In an era where measurement against outcomes is patchy, some departments have decided to measure things like ‘story velocity within project management software’ instead. As a temperature check for a team it might make sense (strong emphasis on ‘might’). As a contract constraint, it’s absurd – and it reflects an immature understanding of what delivery really means.

There are often conditions that smaller companies find it hard to meet. Some include a need for people and teams to be brought in within two weeks. Now, the security vetting process takes longer than two weeks. So that implies suppliers will need to have a pre-vetted ‘bench’ of staff or contractors waiting on the sidelines just in case they need to be brought onto projects. In practical terms, those people will only be available if you pay them to be available. That’s not an option most SMEs can afford.

Constraints like this make a little sense if you’re working on short-term, just-in-time delivery. For things like Brexit transition or COVID-19 response, I can see the value of these requirements. But most digital delivery is for long-term policy priorities. There simply isn’t a need for it.

In our experience, a good team will know what expertise they need several sprints ahead of time. Putting last-minute provisions like this into contracts are either a sign of bad planning or a deliberate barrier to entry for companies below a certain scale.

Procurement teams need a more mature understanding of how agile service delivery works. That’s going to help them produce contracts accessible to the suppliers they need, and avoid situations where monolithic suppliers can hold them to ransom.

Right-sized contracts for right-sized teams

The contracts we’re seeing go out to market recently are massive. At the end of last year, I saw one department put out four contracts worth around £19 million each. Each sought a vast number of junior roles to attach to multi-year projects of work without clear outcomes.

This isn’t expert, agile delivery, it’s bodyshopping.

Massive contracts breed false certainty. The Post Office Horizon scandal demonstrates the risks of this ‘buy big’ approach. Expertise within government is diminished. Oversight is based on faith, not understanding. A supplier has the final say on whether change is possible (or desirable).

I can understand why a department might want to continue a relationship with a supplier through the lifespan of a programme, but there are better ways of doing that than locking in a single massive supplier for several years, and making them the arbiter of what good looks like. That’s a huge risk for government.

These big programmes need to be thought about as iterative processes. Contracts should be proportionate to the stage of life a product is on. Teams should be a mix of internal and external expertise, so that government knows that the outcomes and value of the services are where they need to be.

Making things open will make things better

There’s no doubt the UK’s digital maturity is slipping. In 2016, we led the E-Government rankings, we’re now 11th.

Ten years ago, government made huge gains disaggregating digital procurement and opening it up to new suppliers. That high tide has rolled back, but it shows what’s possible. New opportunities can be made accessible to SMEs who are experts in agile delivery.

All of this gets government closer to what the public wants: better services that are better value for money.