Wendy Sutherland, Managing Director at Ramsay Todd asks if new approaches in procurement will really work.
Both public and private sector are going through changes, but are they for the better?
As Chair of the BIFM Procurement Special Interest Group, I have an active interest in how FM services are procured and work with a team of committed FM professionals from all sectors to develop industry best practice.
Public sector procurement is heavily regulated and process driven but the green shoots of change are springing up in the private sector, which is challenging the perception of how services can be procured. Innovative approaches are being used to break the cycle of:
It’s a bit uncomfortable for those of us that live and breathe the procurement supply chain cycle but at the same time you can’t help thinking, what if it works?
So what’s different? Pre-qualification is gone, specifications are developed at a later stage and the need for all bidders to complete lengthy tender responses have disappeared. It’s replaced by:
- Contractor presentations at the first stage n The specification is issued to the selected bidder
- The selected bidder produces the tender response and finances
- The final price and contract is negotiated and agreed
The private sector can afford to take the risk with this approach and it wouldn’t work for all organisations but, if cultural fit is the key driver, then you can see why this format is being adopted. I can hear the purists amongst you saying ‘but where’s the financial competition?’ That’s not easy to answer and my initial thought was this is crazy but, isn’t this exactly where a catering consultant comes into their own? We know the market and how contractors build their costs therefore a good procurement professional will be able to determine if the quote is fair and reasonable to both parties.
What this procurement format does is: n Enables SMEs to compete on an even playing field
- Removes the investment issue
- Removes cost for Bidders with producing expensive tender responses
- Challenges Bidders to demonstrate their USPs in a focused, controlled way
- Reduces the evaluation period saving time and money on resources
There would need to be checks and balances in place at the end of the process but if we’re honest, the gap between contractors has been narrowing for some time. They all promote the use of fresh, healthy food, local suppliers, environmental credentials, and programmes for staff training and development. How often is the final decision made based on who the client wants to work with?
Speed dating for catering service providers has been in place for many years when selecting which suppliers to invite to tender. The thought of using this approach as the basis of the tender is both thrilling and terrifying at the same time.
The public sector is restrained by OJEU requirements but the private sector can be creative and enterprising with their procurement methods. I will wait with interest to see the results of the new approaches and will be working with my colleagues at CIPS and BIFM to evaluate and share the outcomes. What is exciting however is, that even within the procurement world, the status quo is being challenged and that can only be a good thing.