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Karen Cleale
March 19, 2018

10 things agile/digital teams need to know about procurement

10 things about procurement

At the recent #AgileP event, we discussed the need for a two-way learning journey — involving Digital AND Procurement. Digital Delivery teams shouldn’t be looking at procurement colleagues and expecting them to fully embed themselves without being met half-way.

If the best way to design services is to learn about, empathise with and meet the needs of users; then why don’t we apply the same methodology to transforming how we work with procurement colleagues… it’s a shared journey and codesign will be key.

Whilst I’m by no means a procurement expert, at #AgileP, we discussed creating a guide to the 10 things digital delivery teams needed to know about Procurement; so I thought I’d give it a go:

  1. Spend Thresholds
    As much as I’ve been irked over the years by the perceived procurement barriers; we need to remember that it’s public money! The spend thresholds are there to ensure that there is due diligence around the use of this public money and no department wants to find themselves facing litigation or making front page headlines when something goes wrong.
    The procurement thresholds are commonly:

£1 — £5,000–1 formal offer (i.e. a quote by email)

£5,001 — £25,000–3 formal offers

£25,001 — OJEU Threshold — 3 or more formal proposals (often led by the procurement team)
Full OJEU procurement for Goods and Services:
— £118,133 for Central Government
— £181,302 for Other Contracting Authorities.

  1. Aggregated Spend Matters
    We need to think ahead and plan for aggregated spend. This basically means that we can’t simply divide the contract up to avoid the thresholds…
  2. We need to be transparent about our buying decisions
    A lot of procurement obligations are met simply by being transparent about our procurement activity. In lots of ways, this should be the easiest bit for Digital Delivery teams to get their heads around — we build in the open, write blogs about our activity and even share our code — so this is just a natural step.

The frustrating bit is that by telling the market what we’re doing, we sometimes push the price up but we collaboratively need to find a way to resolve that one!

  1. You can’t just change the terms of existing contracts
    Sadly, doing a change notice isn’t always an option; for all of the reasons stated in #2 and
    3 above. Also, change notices need to be specific to the terms of the current contract — so you can’t add ‘build of x’ into a contract for service management, even if the supplier is more than capable and already knows your infrastructure etc.
  2. Pre-market engagement is encouraged
    I’ve worked in departments where they assure me that consultation is taboo. This isn’t the case but whilst pre-market engagement is possible, there are constraints but that shouldn’t be interpreted as ‘you can’t consult’.

You need to follow the guidelines in #3 above and ensure potential tenderers are given the same opportunities and access to the same information. Companies involved in the market consultation should not have an advantage over other tenderers.

  1. Lowest price isn’t always best
    Any marketplace has players, people that know the rules and can game the system — and I mean doing things like putting in a disproportionately small team for discovery but having a higher rate card. For me, the best measure should be evidence-based value for money; and not just the cheapest bid.
  2. Identify criteria that enable you to genuinely evaluate the differences
    Your procurement team should help you with this but you need to try to ask questions that will enable you to genuinely differentiate between supplier capability — and it’s REALLY hard to do this.

Add to this that companies are increasingly challenging the outcome of procurements (some for very valid reasons) and you’ll understand a little about the sometimes rigid/risk-averse procurement approach.

Contracts can only be awarded on the basis of either:
Lowest price: The lowest priced tender wins. No other element of the tender may be taken into account; or

The most economically advantageous tender (MEAT): Factors other than or in addition to price, like quality, technical merit and running costs can be taken into account but how you’re judging these needs to be shared with suppliers at the point of inviting responses.

You need to help your procurement business partners by refining your questions and requirements. I’d also advise you to include requirements about the live service management.

  1. Ensure that the whole process is documented
    If you’re engaging with a 3rd party/supplier; write it down. We run a confluence page for this kind of stuff — who, when and the gist of the conversation. Do the same throughout the process, better yet, ask your procurement partner to join the meeting and write down the stuff that needs to be captured. When you’re doing evaluations, scribble your notes/comments/questions/thoughts into the margins; share these with procurement too; writing to those that didn’t win and handling any questions can be a far bigger task than completing the procurement and making the award.
  2. Read the contract; and learn how to read them
    I get frustrated by procurement teams that don’t get involved in the detail and hold the pen on actual tender creation. The relationship seems to go

me “I want to buy something, can you do that for me?”

procurement “sure, if you write down every aspect of what you want to buy, then we’ll go to market”

me “er… what value do you bring then?”

The #AgileP movement suggests that our procurement colleagues are ready to get their sleeves rolled up and get involved. The flip side of that is that we need to do the same.

Good contracts are written in plain English and are there to protect us if things go wrong — and let’s face it, we can all point to times when things have gone wrong and we’ve wished for a good contract. So we, Digital Delivery folk, need to get reading those contracts and to scenario the stuff that could go wrong so that the contract is useful.

This doesn’t have to be a drainer — think of a procurement show & tell with a 45-minute workshop to scenario plan; kick the tyres on the contract.

  1. Procurement takes time
    Believe me, I’m the first to get frustrated that there is a process between me and getting on with delivery but the reality is that this stuff takes time and you need to plan that in.

The quickest you can undertake a DOS procurement is 6 weeks (Ann Kempster has done in 4 weeks, we love her!) but that’s from the time to market and includes the evaluators allocating time. It breaks down as 2 weeks for the PQQ/100 word stage, evaluate, 2 weeks for ITT stage, evaluate — and that’s quick. more normal is 8 weeks

And that 8 weeks starts when you have stuff issued! Plus DOS is the quickest route to market out there; the others are longer than a full OJEU can take 6 months.

Lastly, I’d advise you to prepare procurement documents early — it’ll take time to get them approved

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