Government and why it's different

Government is a somewhat imprecise term; I’m applying it to all organisations that feel bound by government purchasing rules which include health, education, local government, government agencies, and organisations that have previously been within government and continue to follow its rules as well as the central government departments.   The term, the wider public sector, is also often used, although I prefer the simpler ‘government’.  It’s a big market opportunity; government spends approximately £175 billion a year on procuring the goods and services needed to deliver public services[1]

Before getting into specifics it’s worth pondering why the government and the private sector are different. I don’t see the people as different rather that they are reacting to different pressures:

  • External scrutiny – In the private sector if the CEO says do something that’s usually enough and whilst shareholders may well be interested they will only want to interfere when something goes badly wrong.  In government many are interested and nothing much can be hidden from scrutiny, therefore ministers, the opposition, the press and the watchdogs[2] feel they have a duty to interfere.  In consequence public servants are always aware that someone is looking over their shoulder and as a result running a compliant, low risk and transparent process can become more important than project success.
  • Best value – Often confused with lowest cost, which by ignoring the balance of cost and project outcomes is actually unprofessional. In the private sector profitable projects lead to career success.  In government policy success allied to not being exposed leads to career success.  Although this is changing, even where budgets are set and strictly monitored, there is a strong temptation to push for a larger than necessary budget and not feel that costs should be controlled too tightly, leaving some slack in case anything goes wrong.  In consequence value for money in government can sometimes equate to being able to justify decisions rather than achieving policy objectives at minimum cost. 
  • Ill considered policies – The political and press attention span is short and policy initiatives may therefore be devised and communicated ‘on the hoof’ with little if any thought of how they might be delivered. The fundamental incompatibility between the short term political horizon and long term government project can result in projects that get dramatically changed or cancelled.
  • Continuity – Although there has been progress in recent years it is quite likely that some of the people involved in a government project will be moved on to develop their careers.  In the private sector the team will be rewarded when the project is successfully delivered so will want to stay associated with it. In government there is more emphasis on having created new policy initiatives which naturally encourages staff to move on when projects go beyond policy towards delivery.

Reactions to these pressures will be ‘individual’ and the people you deal with may be anywhere on a spectrum of cautiously bureaucratic to aggressively entrepreneurial. It’s therefore really important to be able to predict how the buyers you are selling to are likely to behave.

A CBI survey into public sector procurement in 2007 found that the rating for procurement skills were good 9%, adequate 41%, poor or very poor 46%. This illustrates that competence is low, both individually and within teams in government.  Some insight into the capability of central government departments, including spend maps, can be gained from the Office of Government Commerce (OGC) published Procurement Capability Reviews (PCR)[3]. NB responsibility for the work of the OGC has now transfered to the Cabinet Office.

You should expect to see the buyer’s decision makers involved. For large projects this would be the Senior Responsible Owner (SRO), i.e. the person responsible for ensuring that a change project or programme meets its objectives and delivers the projected benefits.  Procurement professionals should be making sure that everything is legal and that time and money is not being wasted, not taking policy decisions.  You should understand the business and policy drivers and the people responsible for them. If the high level business decisions are not being taken by the right people there is a risk that in the later stages of the procurement they will be changed or the procurement abandoned.  So never be tempted to have a decision that’s in your favour taken by people who haven’t the right level of knowledge and authority (building up a network of contacts to enable you to identify them is discussed later).

Procurement documents are often put together quickly and can present an incomplete and possibly out of date view of what the buyer wants. They also tend to specify inputs and outputs rather than the outcomes the buyer wants, so you may correctly answer the questions but completely miss what they are looking for. Also be aware that the writer will possibly not want to explain what they really value in a document available for external scrutiny, for example, “we are not answering 60% of the calls received at our call centre and would like help”. 

Understand the buyer’s approach and what they really want before spending too much, discriminating between:

  • Decision makers (who should be focussed on achieving business outcomes)
  • Project managers (who manage budgets and deliverables)
  • Procurement (who make sure the procurement process is being operated correctly)
  • Business users (who can advise on the business context)

It’s also important to understand their personal and professional drivers. If you aren’t confident I recommend you talk to the buyers directly, making sure that their responsibilities and interrelationships are understood, or engage consultants to help.

Although I’ve emphasised the negatives there are positives to cling to, including that most government employees are bright people trying to make a difference and they need to buy products and services. To maximise the chances that they buy from you it pays to:

  • understand what they are trying to achieve, and
  • be creative and differentiate yourself from the competition. 

making the effort to show potential buyers why it’s going to generate benefits for them.

 


[1] The public sector currently spends approximately £175 billion a year on procuring the goods and services needed to deliver public services. Within this £175 billion, £70 billion is spent on common goods and services that is a product or service which is purchased by more than one organisation. From  the SME National Procurement Conference 2009 publicity material at http://www.bipsolutions.com/events/sme09/index.php

[2] For example the National Audit Office and the Audit Commission

[3] PCR’s can be found at http://83.231.159.113/ogc_-_transforming_government_procurement_procurement_capability_reviews.asp