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September 20, 2006
A real procurement scandal
Tonight I have been leaked the "procurement tender" document for a large English council. It tells me how the decision is made to appoint one supplier rather than another. There are a whole list of criteria including whether the vendors have a showroom and whether they deliver on time. The document says that just 30% of the weighting is given to the price (or the discount) which the supplier charges.
In other words, if they have a nice showroom -and lots of other features like regular meetings- that can be easily more important than the price.
That is a scandal -- when we need as many books as we can and book funds are dwindling-- the value for money- -the number of books for your pound-- has to be the dominant criterion
If there had been no other reason for this blog than to expose this scandal, it would have been worthwhile. Imagine a buyer at WH Smith explaining to his or her director --
"we gave the contract to the most expensive bidder, because they have a nice showroom"
Oh my goodness. I am really am lost for words.. I shall leak all the details to the newspapers in due course.
Posted by Tim Coates at September 20, 2006 10:47 PM
Comments
Tim,
Hopefully, you will set many a biscuit tin rattling!
Posted by: Margo Harker at September 21, 2006 8:11 AM
I never thought I would be defending them but I can see the point of a showroom - they do have to go somewhere to select the books they are buying and either they wander round Waterstones, look up amazon rather vaguely, read lots of reviews and catalogues and cut out bits of paper or - have a showroom. And it should be decently laid out and well lit, with some comfortable chairs.. like a good library really. Oh and coffee and tea and biscuits.
I can see that a showroom is necessary. Ish.
Posted by: SUSAN HILL at September 21, 2006 8:56 AM
Clearly there should be very little weighting given to how posh a showroom is, but surely delivery time is important? What is the point of ordering lots of lovely cheap books if they don't arrive until months after publication?
I'd also like to think anyone looking at contracts would also give a weighting to breadth of stock available - if a supplier is only able to secure bestsellers, that's not going to be much use. Although of course I agree that price has to be a hugely important element.
Posted by: Duchess of Malfi at September 21, 2006 1:22 PM
Firstly - to the Duchess of Malfi: my suggestion is that the selection process is wrong. It shouldn't be done by weighting things that are not comparable.
So I would say that firstly in order to enter the selection process a supplier has to demonstrate that they have access to the full range of stock (and publishers) and secondly that they can prove they deliver within 72 hours.
They only get into the second round if these conditions and similar ones (eg electronic invoicing etc) are met and it is understood they will be conditions of any supply contract.
Then in the second round value for money can be weighted, and if you really want a showroom and publicity material etc, they can count for 10% and price for 90%
To Susan, the problem with the showroomds used by library suppliers are they incredibly expensive and wasteful. 4 people travelling and staying overnight in Lancashire (however beautiful it is) and then buying a few trolleys full of books, is an enormous waste of time and money. Many showroom purchases are of childrens' books. If after seeing all the publishers material and the information on a supplier's abundant website, a librarian still wants to see a title, the chances are it only costs £3 and it is better to buy it and take the risk, rather than visit the seaside and spend a fortune.
Posted by: Tim at September 21, 2006 8:09 PM
You state that 30% of the evaluation weighting is given to price but don't tell us what the other 70% is given for. You also seem to be recommending two tendering rounds - now there's a waste of public money. If this document is worth its salt then it should cover all of the inportant issues including supply times, breadth of stock and price. Give us the whole picture, not just the bits that appear to support your own agenda.
Posted by: james tredegar at September 21, 2006 11:27 PM
James
Thank you very much- you are right to say I have picked the headline out of this matter. I am saying that a process that is supposed to be transparent and intended to produce best value, is neither. It is a complex subject and if you are in a council- or anyone reading this is in a consortium, I would be happy to discuss the process at length with the idea of reducing the process and improving the value.
Councils have established procedures for identifying approved suppliers - and then separately negotiating price arrangements for purchasing goods.
In my view it is a matter that should have been dealt with in detail by Price Waterhouse Cooper review of procurement. There is a huge amount of wasted money both in the process and the results it achieves. Their conclusions should have been derived from a properly costed analysis of what currently takes place.
Posted by: Tim Coates at September 22, 2006 8:05 AM
You still haven't answered the question - what is the other 70% of the evaluation evaluating. Whether or not this particular tender is transparent etc is difficult to decide without seeing the whole document. Bear in mind that local authorities have Standing Orders associated with tender processes, and any library service opting to go for a tender has to comply with these requirements and the process is subject to EU regulations. There is only so much the originating library can do to reduce what is, indeed, a complex process.
Posted by: james tredegar at September 22, 2006 8:57 AM
James
Same answer: if you are from a council or a consortium I would be delighted to discuss how to contract supply in detail with you. But this is professional expertise and given that Price Waterhouse Cooper were paid over £100,000 to answer these questions - and didn't- I am not prepared to hand out my experience for free! You would need to pay.
But I'll give you a taste: in a council in which I have been working I asked the finance director what discount the libraries now obtained for their supply. He answered "35%: we are in a consortium which gets the best discount" I asked him to take a reasonable sample of invoices and calculate the actual achieved discount, because I have done that in other councils. The answer was 21.8%
So, however transparent that council might have thought its process is, neither the finance director nor the librarians who negotiated the contract, had any idea what they were paying for what they bought
You should try the same-- let us know how you get on.
Tim
Posted by: Tim Coates at September 22, 2006 8:39 PM
Where, in any of the posts I have made, have I asked you for advice. You claim to have some sort of document pertaining to a tender for library supply. You have quoted some figures from that. All I am asking is that you give us some more figures. You started this particular strand but you don't seem to want to back up what you are saying.
Posted by: james tredegar at September 22, 2006 9:42 PM
I was once told by a librarian that he bought books based on a perusal of things like the Good Book Guide - I can't see the need for showrooms at all.
Posted by: Clare at September 23, 2006 7:50 AM
Tim,
I might be missing something in your conversaton with James but I was also curious as to what the other 70% of weighting is based upon.
I have to say, having worked with a fairly wide range of stock, that in the selection process for children's books it is often necesary to see how well they are bound and feel the quality and weight of the paper. The books themselves might be cheap but it would be poor value for money (and poor service)if most of the titles fell apart after a couple of isssues or if board books had sharp edges or pop-up books had lots of fragile components. None of this can be seen from a website. Our children's team use supplier selection but even so they like to actually see the stock before it is put on the shelves (and their feedback should, in theory help our supplier to make suitable choices in future).
On a slightly different note, have you seen the Tallis Advisory Board's response to the PwC report?
Posted by: Miriam Palfrey at September 23, 2006 9:21 AM
James, Yes, I am being elusive, but it gives me the chance to make the points I want to make.
The next one is this: If 30% of the wieghting about the decision as to which supplier should be used is on their price, and all the suppliers are perfectly reputable and known to the council (before they were put on the list), then the other 70% of the weighting goes to other factors (as you say). The important thing here is none of these other factors is the quality of the goods. Each supplier is selling exactly the same books. The quality lies in what the author and the publisher did.
So there are a number of factors which can dominate the selection, none of which is price and quality.
Tim
Posted by: Tim Coates at September 23, 2006 9:27 AM
Miriam
At the heart of this is the cost. You will have seen from Richard Charkin's piece that the cost of people selecting £90m worth of books is £40m.
In reality it should only cost about £4m and that would mean an extra £36m to spend on more books.
I am trying to urge people not to take more time selecting and processsing books than they absolutely have to- we need the money.
In the case of a new children's title, the buyer at all of the main book suppliers are themselves extremely experienced children's librarians. Of course occasionally they will make a mistake and recommend a title on their website which is not appropriate, but it's much cheaper to believe them, in the first instance; then if they do send you something that you don't want, you have only lost five pounds
Trips to show rooms are incredibly expensive, for all these reasons; so is the practice of taking "approvals". If you calculate the cost of a supplier sending a box of "approvals"-- several meetings to assess what they have sent-- returning the box to the supplier with all the associated paperwork and handling--- you will find it exceeds the value of all those books and a great many more..
Suppliers have known these costs for years- and are forced to charge in the discount. That's why they shouldn't be weighed against discount in the contract. We can't afford methods like this. Tim
Posted by: Tim at September 23, 2006 11:56 AM
As I understand local authority tendering the tender can be either an open or closed tender. If what you are talking about is a closed tender then it would only go to selected suppliers and you would be correct that more than 30% should be apportioned to price. If this is an open tender then applications can be received from any interested supplier - right across Europe possibly. Therefore a proportion of the evaluation would go on the standing and operational experience of each supplier. So, which sort of tender is it? It would also be interesting to know how much the tender is for (or would I have to pay to get that info?).
Posted by: james tredegar at September 23, 2006 8:00 PM
James
In your words it was a "closed" tender for over £500,000 (divided into a number of categories, adult, children's, etc). The candidates were the normal UK library suppliers.
But the reason I am labouring this point- and am grateful for your tenacity, is that the process doesn't address almost any of the right issues and it all comes from the traditional (pre- Net Book Agreement demise) situation in which there was little or no opportunity to compete on price (because the law dictated the discount at basically 10%)so the contract was given to the supplier who offered the most generous add-ons for the benefit of the librarians.
That should have all gone by now.
Tim
Posted by: Tim at September 23, 2006 8:59 PM