Risky procurement processes increase the risk of project failure
With the headlines dominated by Brexit this year, it would have been easy to miss two stories bubbling under in the procurement world; the collapse of a major HS2 consultancy contract and the government handing back £100m to unsuccessful bidders on a nuclear decommissioning contract.
- In the HS2 story, alleged conflicts of interest and incorrect tendering documentation have led an unsuccessful bidder to raise concern with enough gusto to force the successful bidder to hand back the contract.
- In the nuclear story, a High Court ruling has found that the Nuclear Decommissioning Authority had "fudged" the tendering process, wrongly deciding the outcome of the procurement process.
Both stories should be seen as potential text book examples of how not to run a tender process.
Risky procurement processes, where information provided by the client is incomplete, inaccurate or misleading will lead onto projects being delayed, costs increasing and, potentially, complete project failure. They risk the reputation of the client and confidence reduces in their ability to award correctly within the marketplace; potentially leading to higher prices and reduced competition.
One way to vastly reduce the risk of challenge or procurement failure is to use frameworks. With the announcement of the Scape National Contractor Framework due soon, and a host of other OJEU compliant procurement routes available in the marketplace, it still amazes me that spot procurement takes place, extending project timescales and potentially increasing client costs.
As the industry takes note of lessons to be learned from these examples, I hope they act as a reminder that doing your own thing isn't always the best course of action!