Political Innovation 2: The politics of buying things

This is a guest cross-post by Dominic Campbell – originally posted on the Political Innovation site here:

Well, you wouldn’t still be reading had I called it the politics of procurement now would you? (no, stop – don’t go!). No-one who engages with government procurement comes away impressed with it. It’s a process that wastes £billions and rewards process over outcomes.

Yet we all know that, deep down, it’s a symptom of a political problem. It is a system set up to manage risk in retrospect and trace blame for failure, rather than create a partnership between supplier and customer that allows us to prototype, innovate, and on occasion, fail (well). Because it’s a top-down process, the top are primarily concerned to shield themselves from criticism rather than to be the parents of success.

The risk of failure is very real, but worth the risk as long as failure happens quickly, cheaply and is learnt from with no same mistake being allowed to happen twice.

Procurement is currently about getting people at the top to define a problem that suppliers can solve. Surely it’s time that this process was turned on its head? Politicians and management alike need to let go, to accept they may not have all the answers but by working with colleagues, suppliers and citizens they may be able to develop and deliver solutions to problems better than ever before.

In many ways the government’s procurement process encapsulates everything that must change in the age of New Politics.  Slow, burdensome, anti-innovative and risk averse, it rewards anyone who can parrot the language of the procurer. It rarely takes account of the wider policy objectives that underlie the whole exercise. It scores against lateral thinkers (often smaller, creative suppliers).

It’s no wonder therefore procurement has been singled out on both sides of the Atlantic as a key signifier of change in government culture. Change procurement and you can change much of what is wrong in public service delivery.

In the UK we had the Conservative Party place emphasis on procurement within their Technology Manifesto (it must now extend well beyond this), whereas in the USA the General Services Administration (GSA) are pushing forward on a host of procurement modernisation projects.

While still trialing new ways of working themselves, the GSA (previously seen as the procurement problem not the solution by many) are intent on opening up procurement and bringing in notions of transparency and collaboration. Take the Better Buy Project for instance, where the GSA have developed a space online (a uservoice and a wiki) to co-create the specification for certain goods and services with their suppliers (and presumably their citizens too in the future if not already). Or the new and exciting Challenge.gov, where US government agencies are crowdsourcing solutions to identified problems.

No longer are requirements handed down from on high, but instead developed through an acceptance that ‘many brains are better than one’, they are developing far more honest and achievable set of requirements and saving money with it.

Similarly, FutureGov is developing a social innovation marketplace (Simpl) intended to provide the government with answers from citizens and social innovators to problems it may never knew it had. If it works, procurement will be transformed from the bottom up, with citizens identifying needs and recommending solutions to government rather than merely acting as passive recipients of services.

Clearly while none of this is easy, change is beginning to happen. We can’t hide behind old ideological divides between those who think the state should be doing less or more. Most of us agree that the state has to do something – and all sides of the political spectrum surely want that something to be done well?

This is an idea that needs to be understood and adopted by politicians of all colours. It’s a political innovation rather than a managerial one.

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  • Anon

    “New Politics”? Ugh.

    These is a fairly content lite piece. Anyone who has worked for a company that has had to jump through the ridiculous hoops set by big multinationals will know that the problem is not limited to government. They’ll also know that many people will speaks the language of supplier because a lot of purchasers fdon’t understand the market and actively seek guidance. And many people are risk averse because failure on major infrastructure is expensive.

    The top Better Buy idea there? 485 people and its “don’t rush purchases at the end of the year”. It’s open to gaming by a small number of people, and if it became significant it would not take companies and lobbists long to look for ways to game the system.

    It’s not I object to any of this, it’s simply any time I see anything on it is horrendiously vague. How do you enable failure to be cheap, particularly on large projects? How do you deal with hooking into legacy systems. How do you dela with variability if you push things down and open them up? How do you propogate good ideas? Are you completely dismissing the input from smart people close to the problems — those at the coalface and those who work in the suppliers? How do you ensure crowdsourced material is brought into a standard for industrial requirements – things need to be specific, and changes later are expensive? How do you make decisions about phases and ordering and the like? How do you stop a small number of people carrying disproportionate influence. There is a million questions. It’s not even I epxect answers to all of them, just some evidence of joined up thinking and a frmaework thatd eals with some of them rather than “Yeah, this is the future, man”

    Various internet things are always given as a classic example of this sort of stuff. But a lot of the protocols that make the internet tick are very well established, even when better solutions have been proposed. Displacement of new technology takes time, and sometimes the best things don’t always win out. There are a lot of open source projects, but many of them are ultimately the work of a few people, many die and many are supported by corporate interests in a structured way. There is more to it than organised chaos.

  • Anon:

    “They’ll also know that many people will speaks the language of supplier because a lot of purchasers don’t understand the market and actively seek guidance.”

    That’s exactly the problem that this seems to be aiming to solve. And I think your overall response here is a bit unimaginative. Dominic’s outline may not solve a very specific problem that you have in mind but it would be a huge improvement on the way that many public sector procurements are managed. Not all purchases are rocket science where the ‘Market for Lemons‘ is a factor. This is about breaking the narrow monopolies and monopsonies that drive prices up and service-quality down.

    So much procurement is done on the basis that an officer with a general managerial grasp of processes goes and buys a service on behalf of a wider group of people who aren’t involved in the purchasing decision and have no opportunity to drill down for detail or develop a relationship with potential suppliers. How can that be in anyone’s interests?

    So much procurement is almost entirely contractual – where an inept attempt is made by bureaucrats to describe every aspect of the service as a contract and then everyone is surprised with the suppliers respond with a lawyerly interpretation of what’s in and what’s out of scope for the piece of work in question. If you can involve a lot more people in seeking assurances on individual bits of quality, how can that not be an improvement on the current situation?

  • Anon

    Paul

    That’s exactly the problem that this seems to be aiming to solve.

    It’s not a problem, necessarily. I work in telecoms. You can ask an end user what they want, but it will not tell you what infrastructure the carrier needs to support it. Carriers should know, but don’t always. So they listen to a variety of people, including suppliers. Getting it wrong will typically cost money and maket share. We have a vested interest in working this out because if we don’t we die. Getting into the supply chain of major companies is really hard because they are risk averse. They are risk averse because if the services we provide go down, they cost a hell of a lot of money. I feel you are dismissing expertise; suppliers are not all out to game customers. It’s a bad long term strategy.

    We love clear requirements. If people actually reviewed these things and caught things earlier, or stopped putting in checkbox nonsense, brilliant. But that is precise work that goes deeper than I want X. And at some point you lock in a contract and can’t just pile on things later without cost to schedule and time and if your schedules are too aggressive, that will also cause issues.

    It’s also a myth that suppliers can also endlessly tailor software to a customer’s whim. That leads to a slow death of endless codelines and being led by your customer while competitors innovate wuith things customers don’t know they need.

    If you can involve a lot more people in seeking assurances on individual bits of quality, how can that not be an improvement on the current situation?

    For many things you don’t actually want the entire public. they know zip about it. Some use around the margins reviewing, but really what you want is the 50 or 100 people that will actually use or manage it regularly and understand the problems. And they might me in 10 different companies.

    Anyhoo, I may be unimaginative, but you are unrealistic and don’t understand the scale and difficultly of some problems and the hoops suppliers have to jump through. Private sector, but I imagine government is as bad if not worse.

    I’m not against this, there is certainly potential in crowdsourcing things. There is a lot successful open source projects and iniatives. This article states this and no more. I’d prefer a bit of thought as to what things work and why. Else you can’t replicate it, except by luck.

  • I’m not dismissing expertise. I’ve worked at an ISP and I understand the complexities. If anything, I’ve found that – sometimes – public sector procurement exercises have been designed to *stop* purchasers having the relationship with suppliers that you’re outlining here.

    The private sector does some of these things a great deal better, and as far as I can see, this outline is about overcoming the problems that *political* demands superimpose on public sector purchasing.

  • Anon

    The politics are driven by the very public you want to review things!

    This what you said:

    “If it works, procurement will be transformed from the bottom up, with citizens identifying needs and recommending solutions to government rather than merely acting as passive recipients of services.”

    How? What is the model? What works with these models and what doesn’t and how do you plan to dela with it. If this series isn’t the place to pull deeper at these issues than “this is interesting and here’s a few things already done”, where is?

  • Yes – the workflow is….

  • Public – poorly articulated need / demand communicated to politicians
  • Politicians – poorly understood need and even poorer grasp of how to implement a solution communicated to civil servants (key concerns: whatever you do, don’t f**k it up or I’ll get the blame)
  • Civil servants – no real motivation to meet the concerns articulated (poorly) by the public in the first place – start to seek supplier (key concern: whatever you do, make sure that blame can be handed up to the politician or down to the supplier if it goes pear-shaped
  • Supplier (once selected) “Bloody hell, that was an expensive and risky procurement exercise for me to win – loads of expensive and unnecessary paperwork and arse-covering – I’ve bid for 30 contracts this year and this is the only one I’ve won – I need to make a profit on this one. I don’t know any of the people I’m working with / for and few of them will ever know anything about me – so I’m not doing anything that isn’t in the contract and I’ll probably argue about the bits that are”
  • Anything that short-circuits this pantomime can’t be a bad thing. And I’m not sure that it’s fair to expect much more fleshing out than that in a blog-post, is it?

  • Anon

    No it’s precisely fair. What you are suggesting is mostly:

    Point 1: Allowing suggestions from the public and reacting to demand by implementing suggestions.
    Allowing the public to review procurement documents and / or submissions.
    We’ll take the first one, and ignore all shortcomings.

    It is posisble to get to a point whereby customers can demand a service and something can be quickly built and rolled out. Google can roll out new services pretty quickly if it desires. It implies however, that your underlying infrastructure allows for such a thing. You are going to have to spend money on setting this up. You’ll need to:

    Decide the scope – is this a standard that runs across the entire public service, or limited to a single department? Are you running a pilot somewhere first? How is is rolled out if it is a success?
    Assess the various software options – there are variety of webservers using a variety of differnet languages. Open source or not?
    Assess the hardware needs – centralised, distributed? What is the cost? How does it scale in future?
    What is the workflow for rolling out new services? What’s th eone for rolling back. Upgrade?

    So you have a plan for how you’ll produce these services, how they’ll be built and how they’ll roll out. But wait, none of this maes any sense without the data:

    Do you need to link to legacy systems? How are you opening it up – do you need another layer in between to sort these things out?
    Is new data automatically published? Does it need to hook into these new systems?
    What about sensitive data? How is handled, how is it masked.

    So to work all those things out you need budgets teams, schedules. Management. Some of it can be opened up to public help, some of it can’t.

    And so on and so on

    So from an original very simple request, you have got a complicated picture. Now at the end of this process you might get to the poitn where the cost of failure for new services are cheap, and people are more tolerant of it. But the infrastructure costs are posisbly high, and no one will be tolerant of a failure of the overall infrastructure anyway.

    So then you come to – does the public sector need to do all this? Can we free the information and let the private sector do some of it? People could build services or communities if we free some of this data. Which I think is the rationale behoind some of the things the Obama Adminstration are doing.

    I could do similar thigs for the second point. These are not as quick wins as people are arguing for. So you need a budget, you need to know very clearly what you want, and you need to have an idea of what it will cost because some of these ideas are implying structural changes in the public sector that cost serious money. It can be done, it’s probably a very good thing, but a lot of people could argue for a lot of very good infrastructure projects. Why should this win, what will it cost and so on?

  • The Raven

    “Yet we all know that, deep down, it’s a symptom of a political problem. It is a system set up to manage risk in retrospect and trace blame for failure, rather than create a partnership between supplier and customer that allows us to prototype, innovate, and on occasion, fail (well). ”

    I just wanted to throw in a tuppence-worth here. I am beginning to completely empathise with the civil servants when it comes to public procurement. A chap I know in central government recently put out a call for project tenders. He went through the process, and came out with a winner.

    However, what he didn’t count on was the immediate – and increasingly common – response from two other tendering organisations, who on learning they had been unsuccessful, immediately sent solictor’s letters. The poring-over and raking through of the whole process has made a mockery of procurement. They sought to pick holes in every single aspect of the tender, from the opening of the envelopes to the final tallying of scores. They were unsuccessful.

    I meet the MD of one of those unsuccessful companies quite regularly. On one of those occasions, he actually boasted about how sueing those organisations which didn’t award tenders was now “part of his business plan”.

    I asked him, in the nicest way I could find, about how he felt about the cost to the public purse everytime someone has to come off their existing workload and deal with his cases.

    His answer? “I don’t care; I’ll get one of them sooner or later, and then it will be payday.”

    Now, when that is the attitude of certain elements of the private sector, who can blame the public sector for adding hoop after hoop, and for nothing ever moving forward…?