Harry Metcalfe

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How government’s SME relationship should smell

Dec 19th 2011
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Thoughts

Since I started dxw a few years ago, surprisingly little has changed in the way that we contract with Government. Now that the Government Digital Service has thoroughly arrived on the scene, I thought it might be a good time to write something about how I think contracting for digital ought to work. Or perhaps more accurately, how it should smell.

I’ve never worked as a civil servant, and I’m not a legal expert. The only experience I have of procurement is that of a small supplier to Government trying to get things done. So, this post is neither comprehensive, nor a solution. More a statement of principle.

There are many problems with the contracts under which Government currently works with SMEs (at least, all the ones I’ve seen). They’re too long. They’re not really being used for the purpose they were designed for.

But, on a much more practical level, they’re so long and abstruse that no one reads them. I really mean that: neither the client, nor the supplier, nor, I often suspect, the procurement staff. They are universally regarded as an unavoidable bit of bureaucracy on the route to starting a project. They are almost never challenged, because they have existed throughout the aeons, having been handed down from on high.

These contracts contain lots of detail that — theoretically —  defines the working relationship between government and it suppliers. And I suspect that they do exactly that when Government takes on big projects with big suppliers. But those processes are totally inappropriate for a working relationship with an SME — and the smaller the SME, the less sensible they become. For a company like dxw, they’re absurd.

We very rarely deal with change requests, serving written notices, purchase order amendments, management information, audit requirements, getting permission for staff changes, or any of the myriad other things that these contracts tend to require. Because when we’re working on a project, there are generally two or three people at dxw working with two or three civil servants. And the biggest project we’ve ever had was worth about £30k.

When you’re talking about that number of people, and that value of contract, most of the working arrangements in these contracts become ridiculous. Because they’re designed for much bigger teams, working on much bigger things.

When the teams are small, these arrangements are worse than a waste of time. If we were to follow the letter of these contracts, we’d spend more time on management than on delivering useful things. We’d have to charge lots more money to cover all that time, and the client would get next to no value out of that extra spend.

So, we don’t. And the client doesn’t ask us to. And we all play out the charade, going through the motions of a procurement process that everyone knows is overcomplicated, and that no one intends to think about after the project starts.

Strangely enough, this is ok, in practice. Because in practice, these projects involve a small number of people who are like-minded, and who share a common understanding of a project and its goals for success. The contracts we all agree to aren’t ignored out of malice. No one is being duplicitous. It’s just that they’re obviously unnecessary, and everyone gets by just fine without thinking about them.

Most of our clients no longer even require us to write a formal proposal. Instead, we write a short letter explaining what we’re going to do, by when, and what it will cost. This works best for everyone, because it’s short, readable and useful. But it still sits within a framework contract and a procurement process that aren’t fit for purpose. That are designed to shape a complex working relationship that doesn’t exist, and to facilitate litigation that will never happen.

Because of the efforts of right-thinking clients who just want to get the job done, and who understand the relationship, we’ve ended up with day-to-day working practices which are quite good. But they’re not formally recognised, or enshrined in any process. And that’s a missed opportunity: because the civil servants who need to commission a digital project for the first time, or who work within a more traditional government department, will turn to the process for guidance. As they should. And the process is maddeningly, hopelessly wrong.

So, I think there should be a new process. Since I only know about digital and SMEs, I’ll say that that’s what the process should be for. But these ideas probably apply more widely. I think we need a new framework contract and process which:

  • Values brevity and simplicity above comprehensiveness, ignoring unlikely scenarios in favour of increasing usefulness and readability
  • Has a primary, core purpose of leaving all the parties better informed about the project, what they’re supposed to do and what’s expected of them, and what success looks like
  • Is written for the benefit of the staff actually delivering the project (SME and government), and not for lawyers, procurement staff, or as a tool for litigation
  • Is written using language and styling that makes it likely that those people will actually read and absorb it

At its root, the process needs to recognise that in digital projects (and probably other ones too) success far more often emanates from the close and effective personal relationships of people acting in good faith than it does in detailed specification of process, requirements or outcomes.

Those bullet points accurately describe what almost every project we’ve ever worked on has ended up smelling like, despite the procurement process and legalese.

For dxw, procurement will be “fixed” when the process we follow is designed to facilitate and enhance that relationship. I hope we get there soon.


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12 Responses

  1. Mark Foden says:

    Absolutely. And I’d say these ideas do apply more widely than digital. Puts me in mind of a Tweet I saw today: “Simple rules lead to complex behavior. Complicated rules lead to stupid behavior.” (@webisteme).

    • Harry says:

      Ah, that’s a lovely quote. I shall remember that.

      I’d imagine they would apply much more widely, but wanted to stick to my own experience. Would love to see other perspectives though!

  2. ‘Procurement’ is basically an insurance policy. If you’re insuring something expensive, you should expect the premium to be relatively expensive. But if it’s something small, the premium should be similarly small. And sometimes, the value might be so small, that it’s not really worth insuring at all.

    • Harry says:

      I agree that’s part of it, but I don’t think that’s the whole thing. Getting everyone’s brain into the same place is important too — I think the procurement process could do that.

  3. Actually, please can @harrym be co-opted as SME Procurement Tsar on the basis of this: http://t.co/yZmupqvL

  4. Steph Gray says:

    Agreed.

    I guess there’s the issue of frameworks vs projects, which is worth remembering. Procurement is about briefing projects (to an extent), and like Simon says, insurance (to an extent) – it’s also about the legitimate protection of public money from nefarious or unstable suppliers, and a well-meaning desire to promote various kinds of social good (equality, employment rights, the environment, etc). A lot of the problems in the procurements we see these days is that the ‘protection of public money’ and ‘pursuit of social good’ objectives go a bit too far, to the extent that they become the domain of procurement and legal experts, to the exclusion of the even more important goals.

    So when the process works fairly well – and I think COI’s frameworks circa 2005 would be an example of that – then the hassles of demonstrating the track record and financial soundness to get on the framework can be separated from the more important task of briefing individual projects clearly. Most of the companies on those frameworks were various kinds of SMEs (though few micro SMEs, hence the Approved Supplier List introduced in later years), and as someone who both bought through them and won business through them – they basically worked. There were other problems with COI, but I wouldn’t count its frameworks and SME management among them.

    Projects need briefs for sure, but I guess I’m saying procurement frameworks can be SME friendly too.

    • harry says:

      @Steph: The ASL is great, but have you read its terms? They’re awful. And routinely ignored. Though the hassle involved in getting on it in the first place was admirably minimal, and a great example of the right way to do it.

      dxw’s experience of COI’s frameworks has been good, in practice. But those awful terms that we agreed to a few years ago aren’t at all reflected in our day-to-day client work. I had a quick look over them before I wrote this post, but before today, I hadn’t read them since we were originally applying to join the ASL.

      I do recall a project we did a couple of years ago where the project manager at COI stuck to the letter of those terms. There were a few minor amendments to the contract that we agreed with the client over the course of the project, and we had to go through a formal COI change request before we could invoice for the work. Despite the fact that the client had already agreed to the change, and we had already done it and delivered the project. It was all just a bit silly, and added nothing of value.

      Things would have been rather better if the framework terms had been designed to set the scene for proper, agile, digital working. And if the PM had felt empowered to make sure that the delivery of the project went awesomely smoothly, rather than feeling obliged to go through the motions of an overbearing, pointless process…

  5. Paul says:

    Whilst I agree with your sentiments entirely, I think the absolute stumbling block to your proposals is something which you mention only once in passing.

    Lawyers.

    As a contract is, in essence, a legal agreement, it inevitably has, at the heart of its creation and existence, those abstruse and abstract creatures who will simply not allow the kind of jargon free, user-friendly contracts that any other right-minded individual would like to work with.

    However, I’d like to think that at least some fresh thinking may help to create, at least, some discussion of such issues, good piece overalll and compelling. Thanks.

    • harry says:

      Thanks! But I think there is hope for lawyers. We have a very good one, and have often asked him to produce/review contracts written for humans, which he’s been able to do. Since the main goal of our contracts is to leave people better informed, these work very well. I cannot imagine a scenario where we’d end up litigating over any of these projects, so I’m not too worried about that. But, if we did, I think they would be fine — mostly because they’re simple, so there’s little room for misinterpretation or ambiguity.

  6. [...] have already been discussing this for some time. Hurrah. I’ve also just been re-reading Harry Metcalfe’s ideas about “How government’s SME relationship should smell” which he shared at the end of last [...]

  7. Helen Snape says:

    Just intrigued as someone with public sector experience. Fairly sure the organisations I have worked with have defined various monetary thresholds to determine whether there a) needed to be a proper procurement exercise and b) how complicated that had to be and how widely we had to throw the net. £30k doesn’t sound like that much, but maybe Austerity has led to a tightening up of procedures.

    • Harry says:

      Yes, that’s normal in my experience. Austerity has led to some tightening (generally requiring spending approval from a person more senior than might have been required before) but that’s part of internal processes for making the case that money should be spent in the first place, rather than a part of a the procurement process after it’s been decided that there’s a business case.

      In a nutshell: these processes are usually designed by people who are quite risk averse, and for whom large procurements are the norm. So the processes for small procurements end up being a bit over the top.

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