Behind the contracts

Written by Samera Owusu Tutu on 31 October 2014 in Features
Features

Sally Collier, chief executive of the Crown Commercial Service, says that procurement changes are at the heart of public service reform.

When Sally Collier sits at the table, she leans in. Literally. Coffee cup in hand and gaze fixed, she has a message to share and, despite the smile and good graces, is evangelical about ensuring her message is received loud and clear. 

Collier, the CEO of the Crown Commercial Service (CCS), looks your correspondent dead in the eye as she proclaims that procurement within the civil service is changing. It’s one of the key pillars of public sector reform, she says, and commercial skills are becoming a prerequisite for promotion to senior levels in the civil service.

“I think commercial is now more important than it’s ever been in the life of the civil servant,” she says. “You wouldn’t expect, today, anybody to rise through the ranks of the civil service without having had exposure to all things commercial, because more of our government services are being commissioned from outside the civil service.”

Her message has not, however, reached every quarter: “There is still a perception that procurement means ‘something in the back office’, akin to buying paperclips,” she notes. “The people we have in the profession don’t want to be seen [that way], and want career paths up to the senior levels of the civil service.” 

In a bid to professionalise government’s commercial functions Sally Collier, along with former CCS chairman Bill Crothers, has spearheaded both the extension of central controls and influence across the departments’ procurement and contract management operations, and the growth and development of the profession.

Viewed from the outside, these days the CCS can look a little like prime-time TV’s favoured depiction of the FBI: a big-brother force that swoops in to solve big cases when district police forces are out of their depth. But Collier says her team are simply responding to calls for assistance. 

“For the government’s largest, most complex projects, departments are saying to us: ‘Help. Please help us.’ So it’s not an FBI saying: ‘We are going to come and examine and interfere’, it’s departments saying: ‘Actually, we recognise that you have some skills and we recognise that you can help us here’,” she says. “That’s a real change in dynamic, and a dynamic I want to have. The challenge for me as chief executive is to balance that demand, because if I took everyone in today who wanted to come in, I wouldn’t have the capability to service that. So FBI? I don’t think so. I’d rather be John Lewis!”

To help and support those departments, Collier explains, the CCS is beefing up its skills and capabilities:  “We’ve had a very successful recruitment campaign in the last few months. We’ve brought in a number of senior players, many of whom are from the private sector, because we want that injection of skills into the top of the organisation.”

Collier’s elevation to the top of the CCS has prompted sighs of relief among many government suppliers. Bill Crothers had concentrated on knocking suppliers into shape, ensuring that they took the public sector more seriously and government acted as a single customer. Now his job is done, Collier can come to the fore while Crothers cracks the whip behind the scenes.

“We now have Bill Crothers as chief commercial officer,” says Collier, explaining that he’s tasked with “raising skills across Whitehall in its entirety — not just in the profession, but across every civil servant in Whitehall. It’s a big job.”

The chairman role is now a non-executive one held by Ed Smith who, Collier asserts, brings both private and public expertise to the table: he’s been a chief strategy guru at PwC, and currently holds non-executive directorships at the Department for Transport and NHS England. “He’s all about customer service and how you provide that service. So a great hire for us going forward.”

It’s a heavyweight mix, but it’s Collier — the only career civil servant among the three, with 20 years’ experience — who runs all the CCS’s key functions: the scrutiny, approval, support, and buying framework operations that have pushed and cajoled departments into sharpening up their commercial work. At the moment, her focus is on strengthening the CCS by recruiting in talent.

“We’ve got an attraction strategy for universities in all our locations to attract the brightest – people who would have wanted to go into the diplomatic service,” she says. “My coup is to get them into commercial.”

In the past, government procurement has been something of a finishing school for the business world, with private sector firms cherry-picking the civil service’s best — who, given the onerous civil service pay restrictions, have often been eager to jump ship. Collier acknowledges that pay remains a barrier, but argues that heavy investment in training and professional development is addressing these legacy problems.

“We haven’t kept all our talent because when you get to a certain level, people can often be paid more [elsewhere] and we’ve lost them,” she says. “I think we’ve got the best chance now of keeping those professionals; the whole structure of the profession is going to change. They’ll have a career path; they’ll have permanent secretaries and director generals and management teams interested in what they can do.

Losing staff to the private sector is, she says, “less of a risk in this climate than it perhaps was a few years ago; but also, it’s now working the other way round, because we’re cherry-picking some of those people, and so long as we get that flow — we let some people go, we get some people back — I think that’s fine. I think perhaps in the past the flow was rather more one-way.”

With this drive to bring expertise into the CCS at all levels, is there a worry that departmental commercial teams will remain short of top-level skills? Collier flags the crown representative shadowing scheme as a knowledge-sharing initiative.

“The crown representatives have been a phenomenon, and have made a real change – both to how the centre is perceived, and in terms of our capability,” she says. “The add-on benefit, which I’m not sure we fully appreciated when we brought them in, is that they are apprenticing people in the business. So their skills and their wisdom are being shared.” 

This sounds a little marginal – currently, only commercial directors can bid to spend time with a crown rep – but it’s an offering that Collier would like to expand.

The CCS chief paints a good picture of changes in commercial work; it’s easy to forget about the string of public sector commissioning debacles in recent years. Systemic weaknesses in procurement and contract management have fostered calamities in the Department for Transport and Ministry of Justice, among others. 

“I think some of the recent ‘calamities’, as you call them, have driven large-scale improvements,” she replies. Over-charging in the MoJ’s tagging contracts, for example, revealed the need for improved contract management: “It wasn’t that there was a lack of contract management: it was that there were many thousands of KPIs. How do you see the wood for the trees? It’s taught us an awful lot about [the need for] excellent contract management.”

Collier admits that in many cases the bulk of department commercial manpower has been allocated to the pivotal contract-letting aspect of the purchasing process, leaving a shortfall in capability in the initial planning and contract management phases: “There are far fewer people in the two ‘ends’, and quite a lot of junior people. What I’m trying to do at CCS, and I think what the tagging contract shows, is that there needs to be much more of a focus on contract management — both in terms of board attention, and in terms of individual accountabilities and responsibilities.”

To help address the civil service’s weaknesses in contract management, Collier says, the CCS is running a trial with a number of big contracts on open book accounting — meaning that civil service contract managers can inspect the suppliers’ accounts to check they’re getting value for money. But surely the government is already running dozens of open-book contracts, in advance of the trial’s results?

“Yes, many contracts do have open book provisions,” she replies. “Some of them weren’t used at all. And where they were, they probably weren’t used to optimum effect — let’s put it that way. That’s why we’re doing the trial, to say: ‘Look, this is actually quite new in terms of government. How do we really get to the nub of this?’”

One clear problem, she adds, is that such contracts are often signed by commercial and procurement professionals but then “handed over to someone who hasn’t got both those disciplines. There is currently a mismatch between the skills that we’ve got out there and the skills that we need, for sure.”

The solution Collier presents is training, and this leads us out of fog of bad press and onto a topic about which Collier is clearly passionate. Might a contract management academy be the best way to train departmental staff? “Possibly, possibly. The Commissioning Academy was my baby in a way, so I’ve kind of set it off and I think it’s been phenomenally successful in ways that we could never have imagined when we kicked it off. So yeah, wouldn’t it be great if we had something similar?”

On the policy front, Collier has instigated significant change. Tasked by Cabinet Office minister Francis Maude with reducing the procurement barriers faced by SMEs, Collier was deeply involved in negotiating changes to the EU rules governing public procurement. “We are rolling out the new regulations to 50,000 public sector procurement professionals; we are rolling out the government’s aspiration that 25% of its business goes to small firms,” she says. 

A big push for simplification of the procurement process has dramatically reduced the burden for SME suppliers, she says. And under the new directives, suppliers will be able to bid using ‘self-declarations’ setting out their qualifications for the role; only the winning bidder then has to provide original documentation. “It’s a fantastic win,” she explains. “We fought hard for that one. Only having to submit documentation if you’re a winning bidder is massive.” 

Relaxing the demands on bidders gives civil servants less certainty about potential suppliers, and some may be reluctant to release the comfort blanket of rigid, ‘gold-plated’ procurement systems. But Collier is unwavering; it’s time to man up. “It will put much more of the onus on the procurer, on the commissioner to take judgment,” she says. “When we first talked about these new provisions, there was an absolute clamour of: ‘Where’s the guidance? Where’s it all written down, in steps 1 to 127, as to what I need to do here?’ And we’ve said: ‘There are no steps. It’s you; it’s your decision.’ This is part of the growing of our profession. You want to be taken seriously at the top table? You want to have a voice? Step up, be confident and take commercial judgments. Don’t slavishly follow the process.”

Collier believes that it’s time for civil servants to stop thinking that making contracts legally bullet-proof will protect them against disaster: the emphasis should be on taking common-sense decisions. “The other myth is that we need lawyers; to help us round all of this, we all need to get trained by lawyers,” she says. “Quite the opposite! Clearly we’re not taking wild risks; we should be saying: ‘What’s the balance of risk here?’” Tight processes and legal advice haven’t avoided procurement failures in the past; only being a more intelligent customer can do that, Collier believes.

Procurers also need to make better judgments around how success is measured, she argues. Payment-by-results may have many advantages, but she points out that it can make life difficult for SMEs: “We need to be very careful that payment-by-outcomes is not the panacea for everything.” 

Collier notes that “there are many occasions when payment linked to an outcome is absolutely the right way to go” – but in order to get the offer correct, procurers need to ask: “What can the market bear?” SMEs often can’t compete in a payment-by-outcome system, she explains, and using the approach may make it hard to attract SME bidders: “There has to be a shift; we want to encourage many more innovative new providers to deliver public services. They will only do that in certain circumstances.”

Another provision in the new EU rules will allow procurers to break up large contracts into bite-sized chunks that suit SMEs. Collier acknowledges that whilst this will benefit smaller bidders, it will mean more work for departments: “There’s no denying that managing 10 contracts is going to be more onerous than managing one contract; potentially, you have 10 different sets of providers.” 

But she argues that buying from SMEs can drive down prices — and the taxpayer comes first: “What are we trying to do? We’re trying to get a better deal for taxpayer’s money. That’s all we’re here to do; and we’re trying to, in so doing, promote a vibrant marketplace.”

To those wondering how they’ll manage 10 components with the same number of staff, Collier’s response is simple: “You do it much smarter. You work out what your risk is, and you come back to contract management.”

The other potential game-changer in the EU reforms is the ability to consider evidence on suppliers’ past performance, gathered from all their previous government contracts, when selecting a contractor. Previously, procurers could only make decisions on the basis of formal bid documents – so poor-performing suppliers could win bids time and time again. 

Helpfully, the government now has a system in place through which buyers can share data and advice on bidders: the crown representative boards. “For the first time now, for the largest suppliers to government, we have that intelligence,” says Collier. “So we know where there’s patterns of poor behaviour, and we can gather evidence for that. When the new regulations come in, we can use that evidence if necessary to exclude for that particular procurement.”

The crown representatives enable the CCS to judge suppliers on the basis of their work right across government, says Collier – and to spot occasions when contractors are offering a service of variable quality. To date, she adds, inconsistencies have occurred “because the A-Team is on contract one and the Z-Team is on [another]; we don’t want the Z-Team. This is one public sector.” This approach will be helpful to smaller buyers in government, Collier explains: even if “it’s a smaller contract over there, we still don’t want the Z-Team.”

Sometimes, blemishes on a supplier’s record may be the result of failings inside the commissioning department – so under the new rules, procurers will have to separate out civil service errors from those of suppliers in order to make a fair judgement. Acknowledging these instances of shared responsibility, Collier says: “Of course, sometimes there’s faults on both sides. If there is just one failure, and the rest of the performance is fantastic, then we also have to look at what needs to change in the department. 

“Suppliers have to have the chance to say: ‘Well, I’ve put this right.’ But for me it’s fairly easy. If there is a constant stream of complaints and evidence of non-delivery, there’s a problem, and we shouldn’t be contracting.”

Collier is very happy with the outcome of the EU negotiations. David Cameron may have suffered a series of defeats in Europe, but she seems to have got a result – despite strained relationships in the EC and with European partners. “Negotiating in the current climate in Europe was not easy,” she says, “and I think we got maybe a dozen or so wins that if you’d have said to me at the start: ‘Are you going to get all of those?’, I would have said: ‘I’m not so sure’.” Francis Maude has taken a keen interest, she adds: the minister “was a tough taskmaster. He said: ‘I want you to go after these things,’ and substantially we got all of them.”

Since 2010, the CCS has made good progress in improving government’s commercial operations: it claims to have saved the taxpayer £5.4bn last year, and commercial has moved from back office to centre stage. But Collier shows no sign of slowing down: “We are many component parts coming together, we’re up and running, and we’re off,” she says. “And we’ve done some great things, we’ve brought in some great people — but we’re not there yet.”

The commercial chief is full of ideas and plans about the next phase of reform: even with an election on the horizon, Collier continues to stoke the coals. For this work is fundamental to public sector reform, she says: “Whatever happens, the momentum that we’ve got around commercial continues. The deficit position isn’t likely to see any huge improvement, so the pressure to save taxpayers’ money is still going to be there. And we’re going to continue on this journey.” 

This article first appeared on Civil Service World, the sister website of PublicTechnology.net

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