Speaking of onboarding providers and reducing opportunity and transaction costs

Warren Smith, Global Digital Marketplace Programme Director replied to my tweet this morning about the Commission’s Single Market Scorecard:

For the Digital Outcomes and Specialists framework the Government Digital Service is getting 98% of the tenders with more than one bidder. I’m not a fan of frameworks but this shows how they can be used to increase competition.

The secret? Well, continuous improvement of course. Talking with suppliers, and reducing opportunity and transaction costs associated with procurement. That includes working on what happens before the procedure is launched, the procedure itself and, surprise, surprise, the contracts too.

Commission publishes 2018 Single Market Scoreboard

The Commission published yesterday the 2018 Single Market Scoreboard. The overall results can be found here and the procurement section is here. As usual, the caveat on poor data from TED and the ‘qualitative policy judgment’ applies, but let’s see how things are in procurement:

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There is a lot of red in that table and if we look at the countries, it is obvious the ones faring the worst are Portugal, Spain, Italy, Slovenia, Greece, Bulgaria and Romania, or PIBGRSSs. This would warrant a post in of itself, but let’s focus on the first indicator instead in this post. The Commission is, correctly in my view, paying attention to the number of single bidder tenders in the EU and the signs are not particularly positive.

The single bidder indicator is considered green if less than 10% of the opportunities get one bidder and red if the number is above 20%. Looking at the colours in that graph it is clear that the situation is dire. That is not a surprise for me and fits well with the paper I am currently drafting at the moment. It is a proverbial canary in the coal mine indicating the low health of our procurement systems. If this carries on we will have ever less competitive procurement markets.

In my view the time is coming for us to have a conversation about the health of procurement and what can be done to change the situation. My general opinion is that the current approach has failed and we need to facilitate the process from onboarding to contract to payment. The traditional fixation on the procedure itself is not really working.

Links I Liked [Public Procurement]

1. Public Works Slowdown Following Implementation of the New Italian Public Procurement Code.

2. Public Procurement Single Market scoreboard for 2015 is out. I think Albert has criticised the scoreboard in the past, but there is a measurement I find quite interesting - procedures with a single bidder. The figures for some countries like Poland and Hungary are really telling, but it would be important to know as well what is the percentage of procedures without transparency where that is happening.

3. World Bank Public Procurement Benchmarking: Behind the Numbers. More here.

4. UK’s Ministry of Defence No Closer to Winning the War on Procurement Waste.

5. Public Procurement Trade-offs: Commerciality Versus Corruption. Peter Smith raises some important and obvious points about trade-offs in public procurement. Beware the siren's call for more "negotiations".