GDS Digital by Default procurement -a good idea but poorly executed?

GDS Digital by Default procurement -a good idea but poorly executed?

This week the Government Digital Service @GDSteam informed the market which suppliers had successfully passed the first qualification round of the Digital Services public sector tender. This public sector procurement is looking to select 50 organisations to compete on a Framework for digital contracts worth an estimated £40m within the next 9 months. The contracts on offer are the 25 exemplar services identified by the core central government departments and agencies. 

While the GDS has to be applauded for their innovative and open approach in supplier sourcing I do question whether a positive outcome will be achieved. It is too early to confirm but my reservations are as follows:

  1. Will the framework attract the right type of suppliers with a positive blend of price, quality of service, breadth of experience as well as possess the appropriate behaviours to work effectively with government?
  2. Has their been sufficient quality control and measures in place in the selection of the successful 50? 
  3. Has enough thought gone into governance and management of delivery risk with multi-organisational delivery teams?

 

Right supplier

The sourcing approach has made this framework the most open and accessible in government procurement history. In order to take part all you needed to do was self-certify your capability in only 1 of the 8 capability areas and in only 1 of the defined 13 job roles. You also needed a company registration number, professional indemnity cover and the intellect to compose 250 words (largely plagiarized from the GDS's service manual) to demonstrate you knew what you were talking about in your chosen capability. In practice this meant there was no hurdles to overcome and little exclusion; you could be a self-employed graduate working out of his/her bedsit in Camden or a global multi-national IT services organisation.

While this openness has to be congratulated it doesn't come without risks. With the qualification hurdles so low, self-certification in play, price a non-contributory factor (in the first phase) and past experience largely ignored how have the GDS down selected organisations? And without any form of subjectivity? This remains to be seen but is raises concern that the right blend of suppliers will not find themselves onto the framework.

Quality controls

The second qualification stage of the Digital Services public sector procurement is a reverse eauction where the lowest price (day rates) is the single contributory factor in your success. In summary, the 50 organisations with the lowest day rates for each of the 13 defined job roles will make it onto the framework.

The purpose of the pricing strategy is to drive down day rates. GDS have clearly recognised the risk of unsustainable bids. They have advised that any bids of £70 or under will be ignored. This implies £71 is sustainable. If we break this down and remove VAT, the GPS management fee and travel expenses we are looking at a figure south of £50 per day. Divided into 8 hrs gives a figure below minimum wage - an interesting position for a government agency to be supporting. 

I can't help but feel uneasy that the approach taken by GDS runs the risk of sacrificing quality over price too much on programmes that are so strategically important in the transformation of government IT services.  The fact that all suppliers have self-certfied themselves could lead to abuse and potentially poor delivery.

Delivery risk 

The astute readers will have already recongised the potential last flaw in the sourcing strategy. The framework could end up with a "spaghetti pot" of suppliers who are qualified in some capability areas but not others and potentially no supplier qualified in all 8 enabling them to take end to end delivery risk and responsibility. 

As an example, company A may have only qualified for 3 of the 8 eight capability areas and 6 of the defined roles. However this combination may restrict them from specific or all off the digital call off contracts competed. Alternatively, where company A has qualified those capability areas may sit on the fringe of digital programmes that make them so uninteresting that they do not take part. This is clearly a concern as many suppliers have sought clarification.

However, the GDS have implied that they expect individual expertise to be sourced from multiple organisations to deliver a single digital programme. When questioned where the risk resides the GDS have communicated the organisation who has provided the delivery director role. A position most organisations would feel very uncomfortable about.

Summary

I am a huge advocate of the Cabinet Office's Digital by Default agenda and I do hope that they get this public sector procurement right. But the approach taken on sourcing and the communication coming out of the GDS procurement team gives me cause for concern. Government departments and agencies are not mandated to use this framework and like previous ones could end up being barely used and at the very best a manpower sourcing framework. As GCloud 4 excludes Agile Digital Services a potential net result could be the lack of a viable route to market for agile digital service providers.

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