Professional Services

Procurement Innovation – How do you buy a pound of innovation?

Creative services are notoriously hard to buy, may not be able to be easily quantified yet by definition can deliver huge benefits. If you are wanting to procure a crossing, then you hope that the bidders will inform the decision whether a bridge or tunnel is appropriate. The design contest will often be based upon aesthetics, where value is in the eye of the beholder.

We know that your conditions of tendering allow for innovative bids, but in practice the internal guidance is to look for experience and mitigates against new, and inevitably risky solutions. So how do you encourage innovation which inevitably, we are informed comes from SMEs, not from the larger organisations? This is a challenge to which we believe you may be seeking some innovatory thinking and solution?

If we said that the EU Directive on public procurement allows such a solution and that its really not being used, then isn’t this something you should investigate and develop?

If this solution would help to identify and encourage innovation, lead to more SME involvement with consequential benefits, allow faster more localised delivery and be within the law, then will this help to achieve the government’s policy objectives?

In short, the proposal is that Dynamic Procurement Systems (DPS) should be developed to achieve the above outcomes. A DPS is an wholly electronic system, where entrants can apply or leave at any time, meet indicative price and quality thresholds and conduct electronic tenders, perhaps using Agile methods. The physical mechanics have been described by OGC, but where is the software?

Most existing eprocurement systems handle eAuctions or competitive tenders from PQQ or open stages. They are not set up to manage and maintain a select list – apart from Frameworks, which can lead to lockout for the very firms you are trying to encourage. It’s a classic case of the tail wagging the dog. No wonder the government is listening to SMEs and in some areas, introducing Choice and Competition policies and decentralisation.

We do recall the days in which eProcurement was deemed to mean transmitting a purchase order by email. Now its attached to Enterprise Resource Systems, Financials and Payment Cards. What about the outcomes?

The differences are subtle but markets can be opened out for SMEs and particularly in innovation, care and health services, creative and marketing, professional services, new media and even construction and maintenance. They would be complementary to existing frameworks which still have a term to run.

Where you know a national framework isn’t delivering value, this would help you to deliver the missing value, keep on the right side of the law and the aggregation limits.  

Indeed, given the benefits, the question is that why hasn’t this been explored already? Perhaps it has and maybe it challenges some existing shibboleths? Isn’t that what innovation does? We’d welcome some feedback from you the reader on our conclusions and contact details are supplied below.

In providing an innovatory solution to the innovation challenge, this paper can inform your procurement innovation strategy.

So having provided one answer to the challenge of how to buy a pound of innovation, maybe we’ll see examples of the inertia and politics which tend to stifle innovation. The next question is how many pounds of innovation will be required to put this on the road?

Doug Forbes, Associate Director
Barony Consulting Group Limited
71-75 Shelton Street,Covent Garden, London, WC2H 9JQ
Tel: 0208 8191563


Barony – Performance through Innovation


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