Public AdministrationWritten evidence submitted by Social Research Association (PROC 10)

Summary of Key Points

The aims of purchasers and suppliers of social research services are not contradictory: they share a common interest in ensuring the success of the procurement process.

People providing professional services, including research, need to exercise their judgement. Such services need to be procured in a different, and more flexible, way than does procurement of a standard product.

An early dialogue between research managers, procurement staff, and potential suppliers is needed to make research outputs useful to government and the wider community.

Successful procurement relates more to the decisions taken flexibly within the rules and guidelines, rather than the structure of the organisation.

There are advantages and disadvantages to all methods of procurement. Framework Agreements can bring efficiencies but are time consuming and expensive to set up. Open competition, with a two stage process, offers opportunities to a wider range of suppliers.

Effective and efficient procurement of research demands expertise in the techniques of procurement, sound understanding of the policy area, and knowledge of the research process.

The government model for research procurement has traditionally applied a combination of research and policy subject skills and expertise in procurement. This in-house model has been largely successful.

Procurement benefits from procurement staff working closely with research managers especially where procurement staff specialise in research procurement.

Consortia, led by a prime contractor, are common in social research because of the structure of the industry. They enable a range of skills to be brought together and generally work well.

The Social Research Association (SRA)

The SRA was founded in 1978 to advance the conduct, development and application of social research. The SRA is a charity (1123940) and limited liability company (6407985), run by and for its members, of which there are currently over 600 in the UK and Republic of Ireland. It is primarily an association of individual members drawn from people involved in social research across the academic, public and private sectors. The SRA’s interest in how research is commissioned dates back 25 years and is embodied in a series of publications. It believes that two core principles of good commissioning/procurement are:

clarity about what is being sought from the research—the concerns and questions to be addressed; and

the importance of developing a constructive dialogue between commissioner and commissioned.

The SRA’s Perspective on Procurement

In 2010, the SRA, supported by a grant from the Nuffield Foundation, examined how social research is commissioned by national statutory bodies in the UK. This study focussed on how procurement procedures, particularly framework agreements, operated and what effect the mode of commissioning had on the way research was conducted. The report on this work (Carol Goldstone Associates with Janet Lewis and Ceridwen Roberts, Effective procurement of social research in government: findings and recommendations. SRA 2011), concluded that no one mode of procurement—through different types of Framework Agreement or Open Competition—was preferred; different Departments found different routes most appropriate in providing best value and the opportunity to use the most suitable suppliers.

General Comments on the Procurement Process

The three stages of procurement—pre-procurement, the tender and the contract award, are standard for the procurement of all goods and services but they need to be handled differently depending on whether the project is:

highly complex, technical and expensive (railways, IT, defence);

purchasing of a standard item used by many government departments (paper, office equipment); or

seeking to address a particular problem or provide a service which requires the collation of evidence, making judgements and an element of creativity, as is the case with all knowledge-based professional services, including social research.

The SRA’s view is that research cannot be treated in the same way as purchasing objects. A one size fits all approach to procurement is inappropriate and will not produce the best outcomes. Procurement needs to be guided by rules and guidelines to ensure the process is fair, but it is important particularly for professional services, that staff are also able to exercise their judgement.

Response to specific questions in the Issues and Questions Paper

1. How successful has the Cabinet Office been at improving public procurement policy and practice?

1.1 It is too early to give an answer on how successful the work of the Cabinet Office has been in relation to social research as there has been little direct effect so far. The changes being introduced by the Cabinet Office have usefully led to various issues being examined and debated.

1.2 Contract Finder has been welcomed, particularly by smaller organisations.

1.3 Proposals to reduce bureaucracy on low value (under £100k) projects are welcome. Investment in the tender process must be commensurate with the value and timeliness of the expected outputs.

What should be the strategic aim of the Government’s public procurement policy?

2.1 Good procurement should be underpinned by clear principles and processes. It is important that a balance is achieved between ensuring fair competition and consistency in the tendering process with the recognition that not all procurement exercises are the same. Some flexibility is needed to deliver a successful outcome.

2.2 In relation to social research, the aims of the procurement process, common to both purchasers and suppliers, should be:

2.2.1To ensure that it delivers high quality research that fully addresses the policy issues; is good value for money; is robust, resilient and defensible; is open about methods, data, limitations etc; and that the process itself does not militate against these objectives.

2.2.2To buy “intelligently” by being clear what is wanted: that the staff are knowledgeable about the topic being addressed; and are able to enter into a dialogue with suppliers.

2.2.3Transparent; fair; and provide opportunities for SMEs as well as large companies.

3. Does the Government have the right skills and capabilities to procure effectively?

3.1 Does the civil service have the skills and capabilities required to negotiate and manage contracts effectively?

3.1.1Civil servants are just as capable of achieving effective procurement as anyone else, provided they have had appropriate training and are allowed to use their skills and judgement on how best to proceed within agreed rules and procedures. Progress has been made in recognising the skills involved and in training staff, but there are areas of weakness, which need addressing. Procurement training needs to give more attention to good contract management throughout the life of the project. In research the contract manager must have a sound grasp of the service the contract is delivering. This significantly reduces the risk of a poor outcome.

3.1.2A balance needs to be achieved between ensuring fair competition and consistency in the tendering process and recognising that not all procurement exercises are the same. Some flexibility is needed to deliver a successful outcome.

3.1.3There are some excellent social researchers working in government. Likewise there are those with first class knowledge of procurement matters. The procurement process works best when these two aspects are brought together effectively.

3.2 What skills do procurement authorities require in-house, what skills can be bought in and what skills can be contracted out?

3.2.1Good research procurement demands expertise in procurement techniques, together with a sound knowledge of the methods of research and analysis and an understanding of the policy or delivery area, where research is to be conducted. Without specialist research knowledge, it is not possible to identify the research specific risks to the project or make a realistic assessment of value for money. The government model for research procurement has traditionally applied a combination of research and policy subject skills with expertise in procurement, and this in-house model has been largely successful.

3.2.2Detailed knowledge about research results and their implications is often best bought in. Where particular skills reside—in-house or contracted out—relates more to specific situations and availability of staff than to a general rule. What distinguishes the public from the private sector, as far as research is concerned, is the context in which the staff work rather than a difference in skill.

3.3 What lessons can central government learn from local government on procurement?

3.3.1 The SRA has insufficient knowledge to be able to answer this question.

3.4 How successful are government departments and their agencies at communicating their needs to potential suppliers?

3.4.1Successful communication depends to a large extent on how knowledgeable the staff are about the topic to be researched and how the work might be done. Experience suggests that the procurement process benefits if procurement staff work closely with research managers. It is particularly good where procurement staff specialise in research procurement rather than purchasing research like standard items such as office supplies. Where the latter is the case procurement practices can impede and worsen communication between purchasers and providers and make the procurement less effective than it could be.

3.4.2Technology has improved the procurement process for both suppliers and commissioners but technology should never be the sole means of communication between parties. If it is used to keep suppliers at arms-length it is detrimental to good relationships and ultimately to the quality of the product delivered.

3.4.3Involving the end user or “customer”, as well as the supplier, in the procurement process helps to ensure the final product or service is fit for purpose. This does not always happen.

4. How should the civil service ensure it recruits and retains staff with the right skills to run procurements, to negotiate and manage contracts and to deliver major projects effectively?

4.1 Effective and efficient procurement demands both expertise in the techniques of procurement and a sound understanding of the business area, where goods and services are being procured. The skills of managing procurement are not so special that civil servants cannot develop them with appropriate training and experience.

5. Does the Government have the organisational structures in place to enable it to procure effectively? (For example, how far should the Government centralise responsibility for public procurement? Do central government procurement “framework agreements” enable more effective public procurement?)

5.1 It is the judgements made and actions taken by individuals, rather than the organisational structures within which they work, that are often the key to successful outcomes. In the SRA’s experience the things that can go wrong are due to:

a lack of initial clarity about what is actually being sought;

changes to requirements mid-way through the project;

lack of regard for, or ability to use, the expertise that the commissioner could bring to the identification of the problem and how to address it;

aspects of the tender such as inadequate time for the proper preparation of the bid; and

setting an unrealistic cost ceiling.

Whatever the structures, a dialogue between research managers in Government, procurement staff, and potential suppliers, at an early stage, is more likely to lead to the research outputs being useful to government and the wider community. Rigid procurement processes can stifle innovation by forcing bidders to frame their tender in a way that deters or prevents them from proposing innovative approaches.

5.2 Framework agreements are increasingly a feature of government bodies’ procurement of social research. The SRA’s study referred to earlier compared three different Government Departments using different procurement methods (an OJEU Framework, a non-OJEU Framework and a form of Open Competition, involving a two-stage process of getting short expressions of interest from interested parties and detailed proposals from a short list).

5.3 The SRA’s study found that there were pros and cons for all modes of procurement. No one mode of procurement was more effective in all circumstances than any other.

5.4 Setting up a Framework is very time consuming and expensive for both parties but, once set up, can bring efficiencies, by reducing the effort on both sides. Finding a supplier through a Framework is quicker than going to open competition but the fixed pool of contractors on a Framework can become restrictive if the requirements of the Department change. Frameworks also tend to favour larger organisations which are able to offer a wider range of work than SMEs or niche suppliers. How the lots within a framework are organised can greatly affect how the framework operates. Suppliers who were successful at getting onto a Framework generally found they worked well, provided the Framework had been well constructed. (The study heard of cases of poorly designed Frameworks which resulted in cumbersome and expensive procurement arrangements). But equally, both the Department concerned and suppliers felt the two-stage form of open competition to be effective.

5.5 In research, an important element of the expertise required of contractors is department-specific; for example a policy or programme evaluation can require the contractor to have a good understanding of the policy area, knowledge of the policy delivery mechanisms and access to departmental administrative records (to be able to draw a sample). Government research is typically managed by a “subject expert”, either alone or in combination with a technical expert. Departmental Frameworks have successfully facilitated this process.

5.6 A single pan-government Research Framework Agreement could result in a loss of detailed departmental knowledge in the procurement process and a reduction in opportunities for SMEs and subject specialists to be involved, as they are even less likely to be successful if there is only one Framework. But where Departments commission very little social research there would be advantages in their being able to use a central Framework, to provide greater consistency, provided it was set up to cover a sufficiently broad range of subjects and specialisms.

6. Does the Government collect the management information it needs to understand how public procurement is working?

6.1 The SRA is unable to answer this question.

7. How should Government ensure that European directives on public procurement do not inhibit public bodies’ ability to procure effectively?

7.1 The European directives pertaining to social and market research and to policy evaluation are confusing and reflect a lack of a clear understanding about definitions and how the different elements work together. The effect is that different departments interpret the same directives in different ways, causing confusion for contractors and working against a level playing field in research procurement. Time spent devising “workarounds” for badly drafted legislation could be avoided with some simple redrafting of the relevant directives.

7.2 The SRA submitted evidence to the EU consultation on public procurement in April 2011 and, in particular, argued strongly that it is necessary to distinguish services that have an important element of consultancy, design, creativity or intellectual property from supplies of material products or even services that can be tightly pre-specified and the outputs measured, such as hotel services, transport services or personal care services. Following the consultation, the Commission is proposing reforms to simplify rules and procedures, which will be very welcome.

8. How should Government assess and manage risk when negotiating procurement contracts? (For example, how much risk should Government be prepared to accept and what are the limits on the transfer of risk to the private sector?)

8.1 It is important to recognise that the majority of social research organisations are SMEs and also that the financial risks in social research are low in most contracts. The key outcome requirements for a contract should take this into account. This is facilitated when the supply side is able to contribute to target setting.

9. What is the best role for “prime contractors” and what are the advantages and disadvantages of relying on “prime contractors”?

9.1 The social and market research sector consists of a small number of large organisations, a large number of smaller organisations and many sole traders. All have something to contribute, from specialist subject knowledge to the ability to organise and manage large data collection exercises. Consortia made up of a number of partners under the leadership of one organisation, as prime contractor, can work well, for both suppliers and commissioners, by ensuring that the necessary range of skills are available. They are a way of combining the subject knowledge present in the academic sector and among other specialists, with the management and logistical capability of commercial organisations, to deliver large and challenging projects. In some cases relationships between contractors have been formed that have endured for many years, leading to very effective ways of working. Consortia bids of this kind are common and felt to be successful.

An alternative model of having a prime contractor who takes responsibility for managing a fixed supply chain covering the technical, operational and financial performance of sub-contractors has the advantage for the commissioner of avoiding the need to contract with more than one entity. But to suppliers it can be less transparent and fair. It may therefore provide worse value for money for the client.

10. What are the key lessons to be learned from the experience of cost overruns, delays and project failures in central Government procurement over the past five years or so?

10.1 The SRA has no detailed knowledge about the large-scale project failures in the last few years.

January 2013

Prepared 18th July 2013