We will be featuring a number of the sessions and discussions from last week’s Wales Procurement Week, hosted by Bangor University’s Institute for Competition and Procurement Studies (ICPS) here in the days to come. With a good blend of legal and procurement practitioners, procurement and procurement law academics, and other interested parties, there was a huge amount of content to consider over the five days of the event.
One of the most thought-provoking sessions came from Abby Semple. She is a Trinity College Dublin trained lawyer, who is now based in London and advises organisations on public sector procurement issues, not purely law-related but covering aspects such as sustainability as well.
She has also written a book – A Practical Guide to Public Procurement – which will be published very soon by the Oxford University Press. It covers the 2014 directives, probably the first major reference work to do so, and we look forward to reading and reviewing that shortly.
Her session at the Wales event asked whether we could or should have more evidence-based procurement policy. That’s a topic that we’ve considered in the past, having grown somewhat frustrated and cynical about politicians – and sometimes officials – making major procurement policy decisions based on feel or their personal experience. In some cases, the evidence base for the decisions seems to be little more than talking to a few of their friends who own small businesses that supply government, probably over a drink at the golf club!
The alternative is to base policy decisions, including those in the procurement realm, on hard evidence, including the output from trials, experiments and similar scientific methods as opposed to (as Semple described it) “in distinction to policy based on ideology, ignorance or inertia.”
She commented early in her session that Governments should be risk averse in many cases. It is public money after all that they are spending. But there is increasing emphasis on the use of public procurement to achieve “horizontal objectives” – social value, supporting SMEs, environmental issues and so on. These policies are now pursued by public authorities across Europe, but there is little evidence of whether what has been implemented is really effective.
However, she said, new sources of data on public contracts are becoming available, and that will only increase with the mandate to use eProcurement and eInvoices, for example, and legislation such as the Local Government Transparency Act in the UK. Those data sources will increase the feasibility of analysis and even experimentation to bring a more rational base for policy decisions.
The use of randomised trials or other scientific approaches to make policy more robust and effective is not new. But the ability to analyse very large data sets to support this is. And, Semple claimed, public procurement may be very well suited to this approach as we have a constant stream of contracts and contract award decisions, with many being comparable.
As an example of what could be done, she talked about the Lord Young recommendations in the UK aimed at increasing SME participation and success in public procurement. Some of those have found their way into legislation, but were based largely on “anecdotal accounts of procedures that irritate some small firms.”
So that has led to a legal ban on the use of PQQs for lower value contracts. Semple questioned whether this will achieve its aims, and of course it has implications in terms of the higher number of tenders which will need to be evaluated in full.
But there could have been a different approach. She suggested that different contracts could have been randomly selected and specific measures applied to encourage SME success. A control group of contracts of similar value would have been selected in which no such measures were taken, and the results compared and validated. An excellent idea!
Here are some other questions which Semple suggests would be amenable to a more rigorous and analytical approach.
- Does greater competition lead to lower prices? Is this cancelled out by greater transaction costs?
- Are higher value contracts of greater cross-border interest?
- Does negotiation result in better contracts?
- What effect do environmental and social criteria have on tender outcomes?
- Does central purchasing impede chances of SME success?
So what is the main block to a more evidence-based approach? We suspect it is the desire of politicians to make decisions based on their views, ideas and prejudices. Maybe we need to try and get more scientifically trained politicians in place if we want to see a move to evidence-based policy making! But Semple’s campaign deserves the support of any thoughtful procurement practitioner.