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Keystone Column 39 – Reimagining Procurement

By 30th September 2016 No Comments
The Keystone Column - No 39. Reimagining Procurement.

Welcome to this week’s edition of the Keystone Column containing business stories and public procurement opportunities that drive the commercial strategy of ambitious companies. This week, we look at how the HSE has been reprimanded for its procurement approach, how banks are being challenged by FinTech start-ups, a legal expert that has embarked upon the modest task of reimagining procurement and an Irish start-up that has designed a technology business offering for the developing world that is quite inspiring. Our weekly list of open tenders in the Irish public sector is also included below.

 

Business stories

HSE sanctioned over non-compliant procurement procedures

The Health Services Exective (HSE) has been reprimanded by the Comptroller and Auditor General following a sample audit of its procurement processes. The sample audit found serious breaches in 30% of the files examined. The statement by the HSE stating that the Office of Government Procurement (OGP) will aid its compliance is less than convincing to those that understand how procurement systems operate. The OGP will help with larger ticket items that are pertinent to its skills and competencies (which are aimed at this level). Lower level expenditure and items outside the frameworks will continue to have discretionary involvement. This means the risk of non-compliance will not be solved fully by OGP frameworks – they undoubtedly help but there is a long road ahead for the HSE to follow. We have not even touched upon the practices of charities and HSE funded bodies and their compliance with procurement rules here either (the so called s. 38 and s. 39 bodies like Rehab, the Central Remedial Clinic and Console). All links to all three of the named bodies are to articles featuring the word “scandal” and the specific scandals relate to governance issues. This is not the first or last time we will be featuring issues to do with HSE procurement.

FinTech companies providing stern challenge to the existence of traditional banks

A survey by an international consultancy company found that most banks fear losing customers and businesses to financial technology start-ups. Its conclusion that banks need to make their products and services clearer for customers is not news to anyone that has purchased financial products. The report highlights the puzzling question as to why there has been so much inertia within the banking sector with regard to valuing the custom of people placing money on deposit with them. The report’s finding that banks spend more on security and protection for customer’s money is invariably true (in general). The question is however – is this what people, particularly those under the age of 40, value from their bank? When money can be placed via peer-to-peer lending platforms like Kickstarter or Linked Finance and yield between 9% and 15% in less than three years, one can see why a bank that pays 0.01% on deposited cash may be worried. Consumers will make their own decisions about risk vs. reward so banks will need to put a bit more effort into thinking about the relevance of their service offering. It may be that the banks share of the consumer financial portfolio is in terminal decline. Further to this, on the payments side of banking, PayPal, Realex and Stripe to name but a few well known FinTech companies are challenging the very concept of banking and whether these institutions have a future at all.

 

Interesting trends

Reimagining Procurement (a legal perspective)

Dr. Albert Sánchez-Graells of Bristol University is a leading thinker on the legal side of public procurement. His excellent blog How to crack a nut which we have previously highlighted is entering the foothills of a very interesting debate. Dr. Sanchez-Graells has set himself the modest task of reimagining procurement. More specifically, he has started a debate focused on reimagining the legal framework upon which public procurement is based in the EU.

We think this is very welcome. Some key points mentioned as pillars for a putative legal framework include:

  • A focus on outcomes (was the right thing bought) rather than process (did we buy it correctly whether it is fit for purpose or not).
  • To shift the focus to what people are meant do in practical terms to be fair and compliant rather than lay down abstract concepts that require professional advice for people to follow.
  • A principles based approach rather than one that is too prescriptive.

This is reimagining procurement. These changes would be radical and may be what is needed to put a rocket under vital concepts like the innovation partnership. Not one innovation partnership with a value in excess of €25,000 has been attempted in Ireland since May 2016 when these procedures came into force (as an option). How will we procure smart solutions to complex problems without some of the changes emphasised in his article?

The innovation partnership in theory is meant to be:

  • Outcomes-focused rather than prescriptive in laying down one set of requirements;
  • Practical in solving specific complex problems; and
  • Principles-led because the core procurement principles must be evidenced but the process is less defined that for other procedure (because its meant to be outcome rather than process driven).

One final point Dr. Sanchez-Graells highlights (consistently in his work) is the issue across Europe with regard to dispute resolution. What we have in Ireland is quite simply not fit for purpose and it has long been our view that the public sector is ‘guilty until proven innocent’ until something other than high court appeals / judicial reviews are put in place to assist appeals and disputes. Reimagining procurement is a lofty aim but it is also overdue and necessary. We look forward to watching this process evolve further (and perhaps contributing to reimagining procurement a little ourselves).

 

Innovation – low energy computers designed for the developing world

It’s hard to use the word low energy these days without picturing Donald Trump attacking Jeb Bush. An Irish company Mandac have developed a great business idea that may just make low energy great again. Their idea provides computer and internet access to people trapped behind a power wall in the developing world. Repurposed computers and even new computers provided to schools, businesses, charities and communities in the developing world are often very power hungry and expensive to operate. While the latter point (expense) is important, it is directly linked to the amount of power that these computers use. Low energy computers reduce the cost to users and also reduce the risk of overloading the grid causing outages at a local or sub-district level. Mandac’s innovative solution is to provide access to satellite based internet using computers that are designed to operate at a fraction of the energy required to run a computer straight off the assembly line (or repurposed following donation). Their pre-pay model is already up and running in six African countries and in Pakistan. It is a brilliant idea with a great future that is helping to knock down the digital divide in the developing world.

 

New public procurement tenders this week 

Visit the Keystone website to view our take on the 500+ active public procurement opportunities with more than five days until their deadline. There are a vast range of services, supplies and construction related to public procurement opportunities in the following sectors (there are many more sectors than the sample list below):

  • Construction and related trades, 
  • Professional & Advisory Services, 
  • PR, Media, Advertising and related,
  • ICT supplies and services, 
  • Training,
  • Property & facilities management,
  • Vehicle & automotive,
  • Catering and related services,
  • Cleaning and related services,
  • Waste Management,
  • Maintenance and related services,
  • Horticultural supplies & services,
  • Research & environmental monitoring,
  • Printing, office supplies and related services,
  • Trades,
  • Medical and scientific research, supplies and services,
  • A vast range of other services and supplies.

Businesses interested in any of these public procurement opportunities that are unsure of how they can follow-up on these tenders can contact Keystone at any stage. We would be happy to discuss your needs and where they may fit with your business growth plans. These public procurement opportunities are sources of business growth and innovation for companies across the country.

Keystone E-Tenders Report Open YTD as at 2909 (by date of publication)

Keystone E-Tenders Report Open YTD as at 2909 (by sector)

Please note, e-tenders often has public procurement opportunities incorrectly categorised so people relying on e-tender alerts could easily miss out on opportunities if they are dependent on it. E-tenders is only as reliable as the people inputting tenders and mistakes are made very frequently. The Keystone Column includes all live tenders posted on e-tenders since January 4th 2016 that have five or more days until their deadline as at September 29th 2016.