10 December 2010 | Paul
Snell
The UK Treasury is concerned that the
competitive dialogue (CD) procurement procedure is the default process for
everything but the simplest tenders for some public sector buyers.
It is also worried that its own guidance “may have been interpreted as an
implied ban on everything but competitive dialogue,” which has meant some
purchasers are now so risk-averse they are “nervous” about using other
processes.
These were among the findings of the Treasury’s 18
month-long review of the effectiveness of CD, which was designed as a new way
for public buyers to procure complex contracts, such as multimillion-pound IT,
infrastructure and public private partnership deals. But instead of just a
handful of contracts using the CD process, it is estimated 1,200 deals have
been awarded this way since its introduction in 2006.
The report found an inconsistent approach to CD and a lack of skills and
experience across the sector. This has led to a reliance on private sector
consultants to help run processes. Current training efforts are also
inconsistent, it said.
A survey by the department found 44 per cent of deals purchased using CD were
for less than five years, and 41 per cent had a value under £5 million. It also
uncovered examples of its incorrect use. Among these was a deal to buy
clothing, a local government newsletter and cleaning services for a single
school.
The Treasury concluded the introduction of CD has been positive where the
process has been used appropriately – but where it has not, it is burdensome
and expensive.
The process maintains competition, imposes discipline on parties involved,
establishes better relationships and ultimately provides a better deal for
buyers. But suppliers are critical that it costs more, tendering times have
increased and preparation is often “the most neglected and poorly executed part
of the process”. Vendors were also critical that buyers are using the procedure
as “free consultancy” – asking for suggestions during the dialogue process,
then tailoring their requirements
accordingly.
Recommendations
included more training for buyers, publication of a plan (including the
justification for using CD) before the procurement begins to reassure bidders,
and fresh guidance from the Efficiency and Reform Group advising the best
process to choose.
