All Change In UK Government Procurement? by Colin Cram

Posted on August 4, 2015 by

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Bill Crothers, the UK government’s Chief Commercial Officer is moving on.

This will be welcome news to some suppliers.

Bill was the first chief executive of the Crown Commercial Service, the creation of which I recommended to the UK Parliament’s Public Administration Select Committee in January 2013. He later passed the baton to Sally Collier and focused on boosting the commercial skills of senior civil servants. A consequence of a lack of commercial appreciation and skills are that policy decisions are made with inadequate understanding either of the commercial implications or naivety about what is involved in ensuring that they work.

The lack of commercial skills at senior levels has been a problem that I have observed for the whole of my career. It has resulted in some of the contracting fiascos of the past 5 years such as the alleged fraud by Serco and G4S where they charged for more work, in tagging criminal offenders, than was being done. Another example was the West Coast Main Line fiasco where, due to legal action by Virgin, the losing bidder, serious shortcomings were identified in the tendering evaluation. In other words, Virgin would appear to have submitted the best bid.

Another example of naivety was when the top civil servant in the then Department of Health and Social Security struggled to accept that procurement was much different from shopping around at the weekend for the best deal. I won’t claim to have convinced him, but at least I obtained a sufficient budget to start building a procurement organisation in that department. Eventually I built up a team that as well as letting major contracts, saved about 20% on the department’s mid-1990s £300million annual repetitive procurement spend. So much for weekend shopping!

Another example of naivety that I experienced was when I told a senior civil servant who was on a commercial skills course that the civil service got what it deserved when it experienced fraud. He rounded on me for making such an outlandish statement, completely missing the point that suppliers, contracts and markets have to be managed properly, otherwise things are likely to go wrong. Many government departments were poor at this, hence the need for the Crown Commercial Service to be created to take over their procurement.

One of Bill Crothers’ early tasks with the Crown Commercial Service was to work with the Ministry of Justice in sorting out the mess of the Serco and G4S tagging contracts. Though a criminal investigation is still underway, Serco settled for paying the UK government £68.5million and G4S £108.9million ($180million). The amounts of the settlements appear to have been far greater than the value of the alleged frauds. Serco has had to re-shape its organisation in order to bid for more central government business and lost its chief executive. He was also involved in negotiating to save money with existing suppliers, which delivered savings of £800million and he echoed the comments on the IT industry made by Peter (now Lord) Gershon 15 years earler who said that no industry had promised so much and delivered so little in respect of public sector contracts. http://www.bbc.co.uk/news/uk-politics-25884915

More recently, in his Chief Commercial Officer role, he has taken a more conciliatory line with suppliers.

I doubt if one could claim that Crothers was a popular person, though I found him pleasant and likeable. However, his legacies of getting the Crown Commercial Service off the ground, changing the relationship with major suppliers, and contribution to improving the commercial understanding of senior civil servants are hugely important and will live on. I wish him well in what he does next.

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