Procurement flea control

This isn’t half baked, not even 10% baked really.

“Great fleas have little fleas upon their back to bite ‘em, and little fleas have lesser fleas, and so ad infinitum”

I was listening to one of my favorite podcasts, ‘Inside Briefing with the Institute for Government’; how sad is that? Pretty darned, I confess. This episode was discussing the role of big suppliers in government procurement. Less than interesting, I hear you yawn, and yet, it’s about what they do with our money and what they achieve as a result. OK I give in, you are probably right. Nevertheless, I intend to continue…..

One of the contributors to the podcast asserted that supply chains can be very long, particularly due to the government habit of placing orders with a few large favoured suppliers such as Capita PLC, or Fujitsu. The contributor claimed that they had come across an example of one supplier to the Ministry of Defence who was the ninth supplier in a chain where the work had been contracted out by a big company to a smaller one, and in turn a smaller one, and so on, eight times. Each of the intermediate suppliers marked up their handling fee at each stage. These markups were obviously funded at the taxpayer’s expense.

If you agree that this is undesirable, how could we go about improving it? I imagine some hand waving vigorously now, ‘blockchainey’ type system is to be introduced, where yes you can subcontract as deep as you wish but there is a government management system which you MUST use to be allowed to do this.

The system employed to do this has a cap on the percentage and/ or absolute mark-up at each subcontracting stage. As a sweetener, it’s actually easier and more efficient if you are selected as an intermediate flea, since the contract at level N is copied and pasted in a standard manner from the contract at level N+1, plus essential tweaks only, in accordance with transparent rules. Each sub-contract is identified by a unique traceable encrypted transmission key. Receipt and invoicing from level N to level N+1 is also standardised.

I think this is a win-win-win system. We the public get more for our money as a result of the cap. The intermediate fleas get their finders fee in a more transparent manner, in return for a reduced and more productive smidgin of actual work. The end-to-end efficiency is increased because the software is optimally twiddled, developed and standardised using the most recently evolved techniques of business management- it was once called ‘Business Process Modelling’, then ‘Lean’, but the government has access to top current academic state of the art so use whatever buzzword has recently evolved. It’s easy to train and coach the users, as the government can control the software development and issue the training documentation. Being standardised, it can become part of the school curriculum. Delivery is accelerated. The blockchainey thing allows government nominated analysers, or clever AI, to analyse efficiency or its lack and performance against KPIs in a standard yet confidential manner. This is done even between and across different government departments; that’s currently a challenge due to barriers arising from ministerial fiefdoms. High performance promising suppliers even if they are SMEs are identified and nurtured rather than being lost in the blizzard of bloated and questionably motivated jumbo sized companies. Errors are easier to detect and correct. Responsibility and accountability are clearer. I could go on.

I’m toying with the idea of bombarding the Halfbakery with similarly poorly formed ideas since it’s fun so to do.