Technology & Tools
UK Ministry of Defence – Is New Procurement System Running Into Trouble?

There appears to be trouble brewing over a new procurement systems implementation at the UK’s Ministry of Defence (MOD). Last year, the MOD announced that it was “changing and improving its procurement systems, to provide a more, effective and efficient way of interacting with its supply base”.

The new system is called “Contracting, Purchasing and Finance” (CP&F) and is going to “provide a single end-to-end capability which will enable significant improvements for both MOD and suppliers. It will enhance both contract visibility and the contract management processes”.

It appears to be a pretty complete purchase to pay system, and the MOD claimed that it would improve a number of processes;

  • – The management of contract data and control of contract spend
  • – The on-boarding of new suppliers
  • – The management of catalogue data
  • – Changes to managing suppliers and customers
  • – Changes to the processing of invoices

This would drive a more uniform way of working, a single data input system and improved contract and supplier management processes across the whole department. The MOD said that there would be a significant release of new CP&F components on December 5th 2016.

However, one should never under-estimate the difficulty of making technology changes in an environment like MOD! The sheer scale of the organisation, both size and geographic spread must be a challenge. Inevitably, there will be security constraints and issues; think about the sort of “interesting” information that must reside even in a system that handles “just” procurement and supplier data. Then there are the usual issues around any major technology implementation in any organisation, from transfer of legacy data to integration with existing systems to training of staff and suppliers.

So perhaps we should not be surprised that things appear to be going wrong. The Government Computing website seems to have got the “exclusive” on this, and we’re surprised it has not got into national media yet assuming their report is correct. They say that “smaller suppliers say delays with “CP&F” upgrade means they have not been paid since October 2016, forcing them to approach their banks for financial support”.

If that is true, it is pretty shocking – not being paid for several months could be fatal if the MOD is a major customer for these firms. Even if firms can get emergency finding from their bank or other quarters, it is not an acceptable situation.

Government Computing says one supplier contacted themto say that the system did not appear to have gone live in a workable form, and as a result, a large number of contractors have not been paid by MoD since October 2016.  The suppliers have been given no indication of when that might change the vendor said”.

One supplier said they weren’t convinced anything had happened on December 5th, and another suggested it could be a Firewall issue with the new system “meaning that although its invoices are visible to both itself and the MoD project teams (who sign off the invoices for payment), they cannot be seen by Defence Business Services (DBS) Liverpool which actually pays them”.

As well as being potentially serious for the firms involved in these delays, this is embarrassing given the UK government’s oft-stated aim of encouraging smaller suppliers and looking to them for innovation. There is a target now for 33% of central government spend to go to SMEs, and the MOD is the biggest buyer involved in that target, so let’s hope they can get this issue resolved quickly. At time of writing, MOD had not responded to the Government Computing request for comment; but we will update you with further developments.

Voices (2)

  1. Peter Stuttard says:

    It’s certainly true SMEs have not been paid, I can personally vouch for that.

  2. Digby Barker says:

    I’m not sure Government Computing is correct in categorising CP&F as MoD’s “new procurement system”: it’s really just it’s new Bill Payment System and we can hardly be surprised if we have yet another example of a bespoke Government IT system turning out to be a bit of a nightmare. What I would categorise as MoD’s ‘New Procurement System’ is the implementation of its Materiel Strategy under which a standardised approach to procurement – or Acquisition as MoD has for some time termed the ‘Requirement to Results’ process – is being rolled out with the help of a handful of Managed Service Providers who are contracted to demonstrate what improvements can be achieved by the introduction of private sector ‘takes’ on relevant specialist skills such as commercial, financial, engineering, project and programme and supplier management. Whether the standardised elements of this, such as ITT and Contract Templates, turn out to be a step forward or not we must wait and see: what I have thus far experienced of the rigid way these are being applied coupled with a growing disregard – or awareness ? – of the Procurement Regulations has not given me confidence that this latest in a long line of Acquisition Reforms will actually turn out to be another attempt to de-skill the process in order to make the running costs more palatable.

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