Bidders Special

A reader recently made the following interesting suggestion:-  

One thing we should doing to help NAPO is to think about the questions that preferred bidders might want to ask the MoJ when it comes to negotiating the final contracts. In my view it will be at this point that it will be impossible for MoJ to get away with being unable to give the detail of how things will work in the contracts. So we need a list of questions to pass to NAPO to send to bidders as a sample of the questions they might want to ask the MoJ in order to understand the complexities of our work and how it will work in their contracts. 

In order to simplify things and because both potential bidders and the MoJ read this blog, lets have the discussion here. So, as a public service, this is the first in an occasional series of blog posts that aims to help clarify some of those little teething problems that still remain to be ironed-out before the TR omnishambles  can be deemed 'fit for purpose'. We return to the author of the original suggestion as they get into their stride:- 

Questions on subjects such as:-

Projected numbers of under 12 month custody cases? 
Expected breach rates in these cases? 
Success or otherwise of new court allocation processes? 
What happens to payments if people have multiple Orders? 
What happens if someone on a Community Order is sent to prison for a few years for an offence committed before the start of the CO? 
How will payment be calculated for the following (sample) of Court Orders or combinations of these:-

-12 month CO with 30 day RAR, and mental health treatment requirement
-12 month SSO with 25 day RAR and 9 month DRR
-18 month CO with 40 day RAR and 6 month ATR
And any of the thousands of variations that are possible.

What if someone on 18 month Community Order completes their 30 day RAR within 12 months but in their last appointment explains they are ready to relapse into heroin use or become homeless - is there any contractual obligation to support them for the remaining 6 months of their Order given that they have used up all of their RAR days?
What happens if a service user misses his appointment in Bolton and re-appears in Weston-Super-Mare?
What happens if an under 12month YO belonging to Gt Manchester is in HMP/YOI Doncaster (a different CRC area),or a female prisoner belonging to Cumbria is in HMP Styall (again a different CRC area)?
Will CRC service users have access to Approved Premises?
If a risky service user from north Wales is working in London for a period, will they be allowed to report to the local CRC office in Lambeth? 
Will video-conference facilities be shared? 
Where someone is recalled due to very risky behaviour, would CRC staff have to attend Oral Hearings if called as a witness? 
Will CRC staff have to provide progress reports to Court where this is asked for? 
What happens if a Court breach fails because CRC has not provided adequate information? 
What happens if we believe UPW hours are unworkable but NPS disagrees? 
Under what circumstances would CRC staff be expected to undertake home visits? 
What happens if an Order is amended (eg UPW hours are removed and Activity days imposed)?
Is there any obligation to pay travel costs for service users? 
At what point will an under 12 month custodial sentence be over if the person is continually recalled? 
Is breach of a Community Order deemed to be a reconviction? 
Is breach of a non-molestation order deemed to be a reconviction? 
If a CRC member of staff sees someone on their caseload committing an offence (eg, smoking cannabis, DWD) do they have a duty to report that to the police given that a PbR would depend upon no convictions?

Indeed that last question is can of worms in itself - if a CRC get an extra payment for there being no convictions, should they be obliged to compromise this by reporting any witnessed illegal activity?

There must a few dozen such questions we can helpfully provide preferred bidders to ask the MoJ. Of course if the bidder became unhappy with the responses (or more likely lack of responses), they might decide to pull out, and where would that leave the MoJ in terms of contracting that CPA before the election?

Actually on that last point potential bidders might like to cast their eye over this fascinating report on the Management Today website entitled 'How did the UK outsourcing industry get into such a mess?'  Here are some extracts:- 

The odd thing about these foul-ups is that it’s not only union officials and those who feel their jobs are threatened who delight in taking the moral high ground and bashing them, but also Tory ministers. Take this classic of the genre, from justice minister Chris Grayling: ‘There has been a culture within parts of Serco that has been totally unacceptable, and actions which need to be investigated by the police.’Pretty strong stuff. And the outsourcers are peeved. More than that, they feel betrayed about the way that government talks about them, on the one hand coming to them cap in hand to help make their ever faster, ever deeper cuts, on the other slagging them off when things go wrong.

‘I don’t think it helps their cause to be so antagonistic,’ muses a senior person at one outsourcing company. Another described the government as being ‘hostile’ towards the industry. One of the outsourcers sees the government’s attitude towards them as part of ‘a climate of being anti-big business’. He added: ‘The rhetoric is against big business, against the big outsourcers, banks and utilities. I find it curious that there is so much of this rhetoric, rather than a balanced commentary.’ Another adds, wistfully, that ‘maybe we all expected an easy ride from a Conservative government’. They feel that the Government is asking them to do complex, difficult things in a rush, and that ministers’ glee in slapping them down when they go wrong is cheap and nasty.

cont.......

‘Some people have resisted the agenda and are defending their commercial position and not improving in the way we’d like to see,’ says Crothers.

More of the same is on the way. The Cabinet Office’s new Commissioning Academy will teach 1,500 public servants to be better at procurement by 2015. Traditionally, government buyers have concentrated on negotiating contracts, but they’ve realised that if you want the market to do certain things, then ‘market design’ is also important. In future, they will spend more of their time on the early stages of the procurement process, before the tender is even sent out.

As Crothers puts it, you need to ‘understand how you are going to package up what you are going shopping for’. If you go to market with a $1bn contract, you will get the usual suspects pitching. If you break it down into 10 £100m contracts then you open up the deal to new, smaller players. In future, the government could ‘spend months engaging with the market, holding roadshows, having conversations, listening to why they may or may not bid, adjusting contract terms and how you go to market. That way you maximise the degree of competition,’ Crothers says. 

They also want to get tougher on contractors that try to change terms after the deal is signed, causing value to leak away. This is all specifically designed to bring more entrants into the market, and reduce contractors’ profit margins. ‘We all pay a lot of tax, and if I can help us get to the point of paying less tax, then great. It’s for the public good,’ Crothers says.

There may be trouble ahead, all the same, because as well as making procurement more competitive and complex, the government is also asking outsourcers to do much, much harder jobs. The disability assessments, for example, try to reduce people’s unique sets of difficult, individual circumstances to a box-ticking exercise. Evidently, this tool is not up to the job.

According to the DWP, in 2011 10,600 people died within six months of being told that they were fit to go back to work, and people with untreatable degenerative illnesses have been told that they should get jobs. Clearly something is not working, but Atos ends up shouldering the blame for a mess that is far from entirely of its own making.

There are broadly four problems with the way the government is changing its outsourcing regime. Firstly, as mentioned above, in its haste to get things off the balance sheet, The government risks trying to outsource things that it shouldn’t, or can’t. It’s pretty easy to work out if the bins have been emptied, or if someone is collecting fines or answering phones within four rings, but when it comes to things like probation, or getting people back into work, measuring performance is much murkier.

In probation, for example, there are ‘lots of interfaces between probation and other services so there’s interaction to manage’, says Tom Gash, who has written several reports for think-tank the Institute for Government. ‘It’s also hard to say who or what has helped to stop an individual from reoffending, so it’s hard to measure the value the contractors add.’ 

This is an especially big problem, as another government mantra is ‘payment by results’. The big outsourcers say that some of the problems with things like electronic tagging arose because they were being asked to do difficult tasks on a scale never before undertaken – problems were inevitable.

Secondly, and relatedly, there is the problem of risk transfer. Politicians are keen to shift the risk for some services into the private sector. It’s nice to be able to blame an outsourcer when there’s a prison riot. But outsourcers need to be paid a fair price for taking on that risk, and that is not an easy calculation.

Take, for example, the case of employment services, where they are taking on the risk of the labour market. As Harries says of the mooted deal to outsource probation services: ‘Of course, the principle of introducing competition into probation is absolutely right but anyone who says they understand all the risks involved is taking quite a big punt.’

Then there is the specific question of reputational risk, as these deals come under more scrutiny. ‘We are in an era when things like transparency will be built into contracts, and the industry needs to get used to that,’ says Harries.

He says that government too often puts confidentiality clauses into contracts, but this has to change. ‘We need to move to a more mature relationship, and a recognition that these deals will be scrutinised. That might push the price of contracts up but it is the price of doing business with the taxpayer.’

Thirdly, if government goes too fast, it risks having no bidders for some contracts. Gash says that ‘in some cases, there is a limited capacity to respond to opportunities. So in the south-west and other rural areas there isn’t much competition, and if you let lots of contracts out at the same time, providers might not want to bid for all of them. The market may not be ready to respond to opportunities, it takes a while for providers to get up to speed.’This is especially likely if, as per the government’s new strategy, you want SME s to do the work. A tender with no bidders is no use.

And, fourthly, there is a drive to make outsourcing more varied, encouraging more joint-ventures and mutuals. There is a sound reason for this. Gary Sturgess, an academic expert in outsourcing who used to work for Serco, says: ‘One of the flaws in the contractual system of competition and contracting is that it is such a powerful tool for driving down price that that often trumps the need to be concerned about quality.’

Government is notorious for choosing the cheapest tender. Contracts can also get too big. ‘I’ve seen contracts that are too complex, that are over 1,000 pages long,’ says Iain Gravestock, a partner at KPMG. ‘When you are trying to understand the performance measures and metrics it gets to a point where contracting can introduce too much complexity.’

The complete article is well worth reading, especially by potential bidders and will help inject a bit more reality into the situation, in stark contrast to PR nonsense such as this:-

The Opportunity:

In ‘Transforming Rehabilitation: A Strategy for Reform’, the Secretary of State for Justice set out plans to introduce a new system for the management and rehabilitation of offenders in the community across England and Wales that will begin in April 2015.

This new system creates competition processes to encourage the public, commercial and voluntary sectors to work together and deliver ‘what works’ to reduce reoffending. The emphasis will be on consistently engaging offenders, changing negative behaviours and providing the motivation to work, developing positive relationships and constructive lifestyles.

This represents a massive opportunity for voluntary sector organisations who can provide these services for offenders.

Offenders have complex needs and cost-effective innovation will be required to produce results and receive payment. Large commercial prime contractors are currently developing strong partnerships in contract pack areas with the voluntary sector and linking up closely with prisons, probations services and the police.

 Cumbria is in a contract pack area with Lancashire and there are six prime contractors in the process of bidding for this £20M contract (approx.). 

The winning prime contractor is likely to contract 2^nd Tier providers to deliver these services. Each 2^nd Tier provider will be responsible for a specific area of delivery and, in turn, manage a group of 3^rd Tier providers who will work at a local/community level.

Who we are:

Living Well Trust, Brathay Trust and the Community Development Foundation have formed a partnership to trade in this area called Cumbria Desistance Partnership (CDP).

We wish to engage with the prime contractors to deliver high quality provision for the rehabilitation of offenders in Cumbria and benefit communities across the county.

The structure requires specialist provision at local and county levels to support the rehabilitation of offenders and we would like to hear from any organisation who would like to deliver their services to this target group.

Register your interest now if:

•      You deliver any services in Cumbria for offenders

•      You would like to deliver a service in Cumbria for offenders

Please complete the attached form ASAP and return it to:  

Please forward this opportunity to anyone in your network who might be interested.

I'll round this first 'bidders special' off with some information from readers regarding the prime probation property that successful bidders can expect to be occupying shortly, courtesy of the MoJ:- 

There have been bidders’ visits arranged in the next month, for them to look at a carefully chosen selection of probation premises. Bidders, you would do well to check a few things before you sign on the dotted line.

Pre-bid Visits

You will probably only get to see the buildings that are in reasonable condition. Almost certainly you won’t get to see the 19th century buildings in a very poor state of repair, but they certainly do exist within the probation estate. You will be quietly steered away from these sites. You will need to establish how much your company needs to pay in order to get all the sites up to a reasonable standard -- the MoJ certainly hasn’t got the money to do it. Ensure the visit results in a representative sample being shown to you, and get an accurate and independent assessment of the repair costs involved.

What if you want to relocate later?

If the CRC initially share a building with the NPS but then want to move to a new site, there may be hidden costs. Make sure there are no contract clauses that oblige your company to bring the previously co-located NPS staff with you to the new site. You may also be obliged to heavily subsidise the NPS space in this event. The MoJ don’t want to get involved with all the overheads that come with a relocation, nor do they want to be left paying full price for a half-empty building after the CRC move out, so they may write the contract in such a way that minimises these risks for them.

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If the MoJ has a list of sites they don't want prospective bidders to see I'd say Margate would be on there.

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In the midst of terrible sadness and despair, something very funny has happened this week. For a reason unknown to man nor beast, the MoJ have decided that the office to be displayed to bidders in the whole of Xxxxxxxxxxx (which includes Xxxxxxxxxxx and Xxxxxxxxx) is...Xxxxxxxxx!!!! . My Colleague who will be working there that day – yes she’s the only one – has been told to expect 11 bidders to turn up and have a look around but that she should carry on her work as normal. The part time admin has been asked not to whinge when they come in.  

Let me tell you about Xxxxxxxx office. It’s a two up two down terraced house. On the Ground floor, there is a tiny reception office with a part time admin. Where the understairs cupboard would be, there are two chairs next to each other. That is the waiting room and there is a little interview room used by IOM and all agencies. On the next floor up,  there are two rooms that go from left to right off the stairs. One is the PO’s one is the PSO’s. This is where they see all the clients. They are little tiny rooms. In the windowless basement underground, there is a tiny kitchen area, secure file storage and a staff toilet.  That’s it.

Firstly 11 people won’t fit in, secondly I hope they haven’t come far and might need a wee. Because the only toilet is in the secure file area, we have to send all non staff to the public toilets down the hill.