This is the second in a series of articles from Viridian’s project consultant, John Paul, covering the various stages of a live Competitive Dialogue procurement process. Subsequent articles will track the progress of the project, from its inception through to, we hope, contract signatures. The first article was published in the September 2012 issue of Housing Technology
In the last edition I described why I think the OJEU Competitive Dialogue (CD) process is suited to IT application procurements and this month I will be updating you on how a real life one is progressing.
Using a structured scoring system, we selected the top six Pre-Qualification Questionnaire (PQQ) submissions for the next CD stage, Invitation to Submit Outline Proposal (ISOP). This stage is quite like the Request for Proposal (RFP) approach but of course being a public procurement, we have to take great care to provide a fair and transparent assessment process. The practical outcome of this is an ISOP document that runs to over 40 pages – deep joy for all.
Get the general idea first
However, is a discipline that makes you set out the selection criteria and scoring system early in the process really a bad thing? In order to be able to produce the ISOP document, you have to be able to write down the selection process, knowing also that you will have to stick to it. It still surprises me just how effective producing written statements is in winkling out areas of disagreement or lacking in clarity. When drafting these documents we are obliged to resolve disagreements or set them out as alternative options. My experience so far is that the discussion needed to get to written statements is a good way to get engagement and the procurement timetable sets out deadlines for this to happen. A key benefit of this approach is that it defines a timeline where we start from a general idea of what is required and then move through stages of adding detail before ending with a contract. I like the staged approach because it allows time for people’s ideas to crystallise and time to expose and resolve areas of difference.
So far, so long winded, but recent news has produced a couple of worrying developments on public procurement. Of course, the big one is the West Coast rail franchise and closer to home, Circle’s maintenance contracts. There are couple of useful lessons here. The first is that very complicated scoring and ranking systems are a potential minefield. They need to be checked and checked again to ensure they really provide a fair assessment which means that the assumptions need to be very clear. Usually the assumptions would be set out by the procurer but it is reasonable to allow suppliers some leeway here. For example, if a supplier believes its software can be operated by fewer people, it might be reasonable for them to include fewer licences, but how could you verify this? In most software procurements it is probably best to stick to fixed assumptions that are set out in the document and used in all submissions.
Risk of legal challenge
The Circle procurement illustrates the reality that the risk of legal challenge is high when high value contracts are involved. The standard defence is to run a fair process, sticking to the rules and document everything. Our legal friends can help, particularly in making sure documentation is well drafted but I think there is another, less tangible but important factor to address. It is really important that suppliers feel they have been dealt with fairly and reasonably. If there are perceptions of unfairness then they can be a key factor in the decision to launch a legal challenge. Anyone who saw Richard Branson after Virgin lost the West Coast franchise could see that he felt very strongly that they had been unfairly treated. Of course, all the legal work needed to ensure that the process not only is fair but also feels fair to everyone takes time and money but consider the alternative; the government (a.k.a. us taxpayers) are having to dish out for all the abortive costs on the West Coast deal and run the whole thing again.
Enough doom and gloom, so how is my current project going? The ISOP stage is almost complete and has gone well. The dialogue with each supplier was focused around demonstrations of their products and produced interesting results. One supplier produced an unexpected option to reduce the complexity of the final solution which could add a lot of value. Another realised that their proposal did not fully align with our most important success factors and decided to withdraw from the process. The others all submitted excellent proposals which are now being reviewed and assessed to identify two or three to go forward to the next stage, Invitation to Submit Detailed Solution (ISDS).
This is where our focus shifts from the emphasis being on the paper submissions to more verification of capabilities through reference site visits. It would be great to do site visits at the ISOP stage but the time and resources to do this thoroughly for the larger number had to be taken into account. The other thing that is happening is that thinking around the wider IT application strategy is starting to focus on the options that are now on the table as part of the procurement. There are three strategic choices (which I can’t describe here) but the ISOP has brought them forward as real possibilities and ‘fit with strategy’ is built in to the assessment scoring.
The whole OJEU process takes time and resources but often you need time to get clarity of purpose from a wide group of people and to build the engagement needed for successful outcomes. It is a myth in most cases to think that you can get the best, clearest and most detailed statement of requirements set out at the start of a procurement project. Things change and if the requirements are set in stone they can be very out of date by the time of the contract is signed, let alone implementation.
The important thing is to achieve that elusive clarity and detail at the key critical points when decisions are made and resources committed. I see all procurements as learning journeys where we discover the unique situational knowledge needed for a successful outcome in each case. It’s unique because while there are plenty of common factors in every procurement, some key factors such as the people, organisations and operating environments are never exactly the same. And as ever, it’s the people and processes that are the keys to success, not just the technology.
John Paul is a project consultant at Viridian Housing.