Will the courts ultimately become a key part of the government tendering process?

Posted by on Nov 30, 2011 | Comments Off on Will the courts ultimately become a key part of the government tendering process?

It seems apparent that the new rules have made it easier for suppliers to challenge. More information must be provided to suppliers losing a procurement competition and suppliers can now halt the award of a contract through an ‘automatic suspension’ mechanism if court action has been started.

Considering the current squeeze on the public purse, suppliers are going to be more inclined to take their chances with the courts. So watch out buyers.

from the November 21st, 2011 SupplyChainStandard article “Rising tide of supplier challenges brings danger” by Nick Allen

My initial reaction to reading the above story is that there is something seriously wrong with the acquisition process when an increasing number of suppliers can and are turning to the courts to settle disputes relative to the public sector bidding process.

Don’t get me wrong, the ability to challenge an award is an integral part of the RFP exercise in that it supposedly ensures an objective, third-party (at least in concept) hearing of grievances that is designed to keep the system honest.  Unfortunately, and as intimated by the article the real question is whether or not challenges that ultimately find their way into the courts are more punitive on the part of disgruntled suppliers than productive.

A point that is especially worthy of consideration when you consider Allen’s suggestion that “cuts to public spending have left many procurement departments lacking the necessary ‘in-house’ experience,” which implies that with the absence of important expertise in the vendor selection process there is an increased likelihood for reversible errors.

Truth be told, and referencing a roundtable discussion I had hosted on my radio show in April 2010 on transparency in government purchasing, this is nothing new.  In fact, one could make a reasonable argument that long-standing issues with buyer capability fuelled by inherently flawed policies within the public ranks has always been a problem.  At least this was the opinion of 35 year plus public sector expert author Colin Cram.

Cram’s opinion would tend to challenge, at least to a certain degree, Allen’s belief that “information, guidance and expert knowledge is going to be increasingly important to procuring organisations if challenges are to be avoided.”  This is due to the fact that the public sector belt with suspenders mindset actually cultivates if not encourages outright unimaginative, just following orders thinking.  Or to put it another way, all the expertise in the world will not overcome a culture of unthinking adherence to a flawed vision of a transparent and level playing field.

It is this homogenized view that all vendors and all vendor relationships are equal or at least the same that is more likely at the heart of the problems that ultimately opens the door to winnable challenges in the courts.

So while procurement legislative reforms such as the ones introduced in the UK in December 2009 may have had a direct impact on the number of challenges that have made their way through the legal system, the real issue is to find a way to loosen as opposed to tightening the legislative shackles associated with a flawed equal opportunity mindset.  Only when this has been accomplished can the government then look to attract the expertise that can be leveraged to deliver real value while reducing if not eliminating the reasons for said challenges to occur in the first place.

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