STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
ARTicle 41
ARTICLE
Why do PUBL I C SE C T OR SUPP L I E R RE L AT I ONSH I P S seem so N A C C I DEN T PRO E ?
© 2014 State of Flux
Back in February 2014, the Chief Procurement Officer at the Cabinet Office was very forthright about a number of the government’s IT suppliers.
ARTICLE BY
Mel Shutes, Executive Consultant and Head of SRM at State of Flux. Call Mel on +44 (0)2078 420 600 or email him at mel.shutes@stateofflux.co.uk for more information on public sector supplier relationships.
He accused some suppliers of taking advantage of relationships with government and of 'monopolistic behaviour' – going as far as describing their behaviours as 'abusive'. Speaking to the BBC Radio 4 World at One programme he said, “This is about the oligopoly; the cluster of big suppliers that have had it too good for too long”. This is the latest in a number of public criticisms levelled at suppliers with government or public sector contracts. IT suppliers have long been in the firing line, but we have also seen the criticism of G4S leading up to the 2012 London Olympics and more recently of Serco relating to the electronic tagging of offenders. What characterises these statements is that they reach the public domain via a string of sound bites quoting individual horror stories, but seldom conveyed is any real context or appreciation of the bigger picture, which invariably has a very complex contract and
relationship underlying it. Typical examples will describe horrendous budget overruns or will include quotes such as 'we were charged £60 for a replacement cable' or 'we could buy this laptop cheaper on the high street'. Rarely, if ever, is there any acknowledgment of government procurement’s responsibility in allowing the situations to develop.
Before you think I’m blindly defending suppliers, I should point out that I am a procurement professional with 35 years’
experience. The first 25 years have been in senior purchasing positions and the last ten with State of Flux as an Executive Consultant and Head of SRM. Over that time I have seen many examples of poor supplier performance, alongside examples of extraordinarily good performance. Inmy experience, a high proportion of instances of poor performance have had in their root cause at least some failure by the customer to either define their requirements clearly or to meet their own obligations under the contract. I firmly
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