Latest Government Procurement - Wider use of Charities, Risks and Challenges
Published in Supply Management on 3rd November is a thought provoking article about the government's decision in awarding the first outsourced contracts for the probation service. The topics of interest are:
The current coalition government has championed the "big society" and the wider encouragement of SME to bid for government work, the latter enshrined in the government's consultation paper on the forthcoming OJEU 2015 Regulation. The area of probation and the potential risk to society is a brave area to choose as a showpiece for widespread use of charities. Recognising that the charities selected have deep sector knowledge it is a sound move to harness that knowledge and experience for the greater good of probation activities.
The partnership mix of charities and private sector outsourcing companies would seem an odd choice; trying to blend specialists focussed on delivering bespoke needs with the providers of high volume repetitive services. The naysayers will say that the partners will be viewing the service delivery through very different lenses having contrasting views on cost drivers. A brave in move in as much that the charities will bring expertise and knowledge that will be coupled with the outsourcers skill in delivering high volume activities within stringent economic bounds.
The current probation service is undergoing significant change post the splitting of the service in June of this year. It is always unwise to either outsource a problem or outsource a service that is in transition. Why? confusion and uncertainty of roles, responsibilities and interfaces will be uncertain and the ability to benchmark future performance against current performance will either be skewed or non-existent as the current data could be flawed, not present or incomplete. With the probation service being split between government provision and outsourced service the ability to accurately performance measure both elements will be crucial and there remains a risk that failure by one party will be prejudicial to the public perception of the entire service.
Recognising the points above and the nature of the service this is a bold move to outsource a service that could impact on public security. When the risk review was undertaken before the decision to outsource the service was taken presumably a room full of wise people took the tabloid review (how would this look if a bad news story appeared on the front of the daily tabloids).
Perhaps one of the most striking features of this activity, which in itself is a highly interesting case, is the provision of a 'poison pill' clause. This clause is intended to remunerate the contract service providers with their guaranteed profits if the contract is cancelled after the next general election, should a different party/mixture of parties be in power.
If all of the above were not enough reason to be wary of this activity the probation service is challenging the award. On what grounds, apart from the uniqueness of the situation, is unclear but this will be a very interesting case to follow over the coming weeks and months.
Link to article - http://www.supplymanagement.com/news/2014/probation-contracts-face-legal-challenge-from-union
- The wide use of charities to undertake work in this sensitive area.
- The mixture of charities and private sector companies as partnerships in delivering the services.
- The sensitive nature of the service being outsourced and the serious ramifications if the outsourced services fail.
- The shifting nature of the current service and the uncertainty that a split service will face (for the rehabilitation of serious offenders the current government service will remain in place).
- The adoption of a remuneration clause if the contracts are cancelled.
The current coalition government has championed the "big society" and the wider encouragement of SME to bid for government work, the latter enshrined in the government's consultation paper on the forthcoming OJEU 2015 Regulation. The area of probation and the potential risk to society is a brave area to choose as a showpiece for widespread use of charities. Recognising that the charities selected have deep sector knowledge it is a sound move to harness that knowledge and experience for the greater good of probation activities.
The partnership mix of charities and private sector outsourcing companies would seem an odd choice; trying to blend specialists focussed on delivering bespoke needs with the providers of high volume repetitive services. The naysayers will say that the partners will be viewing the service delivery through very different lenses having contrasting views on cost drivers. A brave in move in as much that the charities will bring expertise and knowledge that will be coupled with the outsourcers skill in delivering high volume activities within stringent economic bounds.
The current probation service is undergoing significant change post the splitting of the service in June of this year. It is always unwise to either outsource a problem or outsource a service that is in transition. Why? confusion and uncertainty of roles, responsibilities and interfaces will be uncertain and the ability to benchmark future performance against current performance will either be skewed or non-existent as the current data could be flawed, not present or incomplete. With the probation service being split between government provision and outsourced service the ability to accurately performance measure both elements will be crucial and there remains a risk that failure by one party will be prejudicial to the public perception of the entire service.
Recognising the points above and the nature of the service this is a bold move to outsource a service that could impact on public security. When the risk review was undertaken before the decision to outsource the service was taken presumably a room full of wise people took the tabloid review (how would this look if a bad news story appeared on the front of the daily tabloids).
Perhaps one of the most striking features of this activity, which in itself is a highly interesting case, is the provision of a 'poison pill' clause. This clause is intended to remunerate the contract service providers with their guaranteed profits if the contract is cancelled after the next general election, should a different party/mixture of parties be in power.
If all of the above were not enough reason to be wary of this activity the probation service is challenging the award. On what grounds, apart from the uniqueness of the situation, is unclear but this will be a very interesting case to follow over the coming weeks and months.
Link to article - http://www.supplymanagement.com/news/2014/probation-contracts-face-legal-challenge-from-union
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