Costs driven up in Highways procurement

We frequently see both the costs and timescales of public sector procurements extended beyond the original intentions of the relevant organisations.  This can be down to a number of factors, and generally a combination of several: over-ambitious timescales (often driven by organisational or national politics); lack of sufficient planning for advisors' fees, be they lawyers, financial advisors or technical consultants; the ever present risk of scope creep; and protracted negotiations - to name but a few.

But still, the Highways Agency's telecoms procurement (late by 3 years, over-budget by £12.5m in advisors' fees) seems an extreme example.  The Public Accounts Committee's report concludes that "Most of the additional time and cost was incurred in meeting the Agency’s requirements for high quality bid documents" - an admirable aim in itself, but the PAC also found that:

"The Agency never had a clear idea about the time and cost needed to complete the procurement. In every updated forecast, the Agency’s revised budget and timetable were optimistic, often by considerable margins."

"The Agency did not deploy effective controls over the work of its advisers".

So a salutary lesson for public sector procurement managers.  Inevitably, and rightly, a lot of time is often spent working out an organisation's requirements for the goods or services to be procured.  However, taking time to properly scope advisor requirements and to build good working relationships with them can be equally important - both in terms of budgeting for and managing likely costs and in making use of their expertise in sense-checking the proposed procurement structure and timetable.

Comments

[Dan]

This reminded me of a tender I was looking at last week for a public sector procurement of office furniture. The thing ran to 37 pages of requirements for the furniture (which is considerably longer than the testing report and explanation of standards applicable to your average desk) and went as far as having pie-charts of what proportion of a worker’s time will be spent on what task at the desk over a day. It was a good example of procurement overkill, written by someone who seemed to know more about producing a lengthy flashy document than the actual requirements of furniture. It did make me wonder how much more they could actually spend on desks that was instead being spent on buying them.

[twbrit]

This whole ‘over documenting’ and hyper checking of the documents by third parties etc is getting ridiculess and to the point where we’re inhibiting ourselves financially from improving.
Back in 2001 I was employed at an office in the City doing what they called ‘virtual system design’ for the London Underground Connect project. I had to put together a design document without actually seeing the environment for where this design was to be deployed and even complained about it. 5 years later I working for someone else at Vauxhall Cross, my job was to verify a design and survey to see if it could be done. The first document I picked up was the last document I wrote for the other company!!
So basically there had been 5 years and thousands of pounds wasted only for the same guy to do what he wanted and needed to do in the first place – it’s no great wonder that the LUL’s Connect project is now running to well in excess of £1billion. The system could have been in, up and running 4 years before.