Monday 7 April 2014

More on Bidding 2

Continuing with our theme covering bidding, we have Joe Kuipers to thank, via his latest blog post, for sharing various insights gained at the recent NoOffence conference held in Derby. Joe says the mood amongst a room full of potential bidders was 'uncertain', but given the content of the day, I suspect that's a bit of understatement. 

Could these be some of the reasons why we hear bidders are dropping out in significant numbers? The full blog post can be found here, but the following is a slightly edited version:-


So, what was the uncertainty about? In a nutshell, bidders be they primes or second or third tier potential providers still had many questions. This applied especially to second and third tier providers, with some key questions for them being:
  • Can you afford to take part?
  • How much risk can you carry and for how long?
  • Are the Industry Standard Partnering Agreement (IPSA) and the 'Market Stewardship' principles sufficiently well defined from the general to the specifics of TR?
  • Do you know why you want to be involved, as the MoJ has declared continuing commitments to 'austerity' ? In other words, the probation 'pie' is a shrinking one with not a lot of profit scope.
My talk followed an engaging and MoJ approved opener from Jonathan Martin (of NOMS). He gave a fair overview of TR. In particular he referenced the 'trading relationship' (my words) between the NPS (to be managed by Service Level Agreements with NOMS) and the CRCs (to be subject to contracts with NOMS). It seems quite clear that the CRCs will have a subcontracting relationship with the NPS, i.e an accountability link, in addition to the more direct accountability to NOMS via the three NOMS account managers (in the process of being appointed) and their future teams. The 'chain of command' therefore for prime, second and third tier contractors could be interesting?

I focused on the plethora of interfaces that future contractors from whatever tier would need to consider if they were to provide an effective service, all in the context of the whole TR approach being a bad idea because of the disaggregation of offenders by risk. That said, I am committed to trying to help the case and staff transfers to be done as safely as possible - I and our ASPT team owe that to our communities and staff. I reminded the audience that reliance on a contract when things go wrong is naive and that at heart probation service delivery is a people business, with partnership and contracts needing to be grounded in agreed common purposes, principles and values. In this respect the concept of desistance is central reflecting a recognition that people normally change their behaviour somewhat slowly, with lapses - bit of a nuisance really in a world of PbR? Credit to Nigel Bennet of PublicCo for an excellent presentation on desistance.

For the primes the main interface (i.e.the one that will judge them) will be NOMS / MoJ. Now, I did not need to comment much on just how good the contract management NOMS / MoJ reputation was/is, but did remind listeners that in the future it was to be 'forensic'. This may well be the case as the MoJ can ill afford further contract debacles, so contractors, be warned.

Contracts can work between sensible and like-minded parties, in an environment of some stability. I asked the audience to reflect on the sensibility and stability of government, its long term thinking (or reactivity) and what the implications might be for longer term contracts. This consideration feeds right down the supply chain - kicks can get and feel bigger towards the bottom of the food chain. And, in relation to risks for the second and third tier providers (there are so many), regardless of IPSA etc how much risk will fall on them from the primes, for how long and what guarantees might they have about volumes and price? Will contracts devolve, will pricing be spot purchasing? And, if PbR is a devolved element, how long might you have to wait for the P, if it can be defined who was responsible for the R?


The big interface for the primes will be a fractured staff group, with varying intents and aspirations for the future. It is without doubt the case that the CRCs will be the subordinate partners in the new TR landscape, which is not the same as saying that staff in the NPS have the better deal. And, when it comes to future cuts it will be in the CRC arena, perhaps to the extent that it will cease to be a people business at all, instead TR marking a transition to major increases in electronic monitoring (which might just suit some primes?) in the lower risk 'market'.

I talked about all the other partners that probation trusts interface with and what a complex environment we work in; small but so connected throughout the justice system. All those interfaces need to work not just for one organisation as now, but for two major ones and a host of subcontractors. So, might we expect communication difficulties, overlaps, duplications, underlaps and gaps? 

This brings me onto what I considered to be a highlight of the conference day, a presentation by Mark Johnson and Owen Willcox of Geldards. They examined the draft contracts to be, between NOMS / MoJ and potential providers available to them at that time. Their assessment, and recognising that further work was expected on the contracts, did not make for reassuring listening for potential bidders, either primes or others. Below I pick out some key factors for those interested in probation contracts, and ask readers to note that their presentation was intended as a general guide to the contract structure, that documentation is subject to change, and that Geldards LLP shall not be liable for any reliance placed on this information in the absence of a specific retainer with them to advise. Critically there must be an emphasis on rehabilitation over profit.

  • MoJ retains a special share with veto rights.
  • 7-10 Year Contract Period, capable of 3 year extension.
  • The contractor has no power to terminate (!).
  • No volume guarantee by the Authority.
  • Instructions from other commissioners (e.g. PCCs and NPS) are mandatory.
  • The contractor must comply with the requirements of Contract, Good Industry Practice (especially safeguarding & risk) and directions (including Probation Service Instruction, Prison Service Instructions).
  • There is a range of Applicable Laws: Offender Management Act; Human Rights Act; Equality Act; Freedom of Information Act; State Aid regulations; Children Act 2004; Care Act 2014; MAPPA; European Social Fund Obligation; Welsh Language Act.
  • Contractor deemed to have satisfied itself as to assets and nature & extent of risks under Contract (clause 15(1) and clause 39(3)).
  • Authority excludes all liability for failure to provide information or incorrect information.
  • Contractor indemnifies Authority for death & personal injury, property damage, third party claims advisory from its acts or omissions (clause 17).
  • There is a limited cap in schedule 11 App 8 but subject to important exceptions – data protection breach, IPR breach, ESF obligations, ‘off contract’ services.
  • Detailed programme of insurances required (schedule 16).
  • General principle, each party retains its pre-existing Intellectual Property rights, BUT the contractor must grant free licence to Authority to use all IPR necessary to perform services (includes right to sublicence contractor).
  • New IPR developed by Contractor belongs to the Authority!
  • And, be careful about use of third party rights (e.g. software licences) – contractor indemnifies Authority for any breaches.
On PbR, we know there will be a fee for services and a PbR element, which will change over time. The maximum that can be paid is £4,000 per unit paid after 26 months (the binary measure), and a possible £1,000 per unit paid 35 months later (the frequency measure).  I won't go on about the payment mechanism - the key question for bidders must be how long they can wait to be paid? Please note, 'unit' is not my terminology - it is just how the business will be seen in the future. A reductionist and monitarist approach.

Mark and Owen set out the areas of greatest risk, as they could see at the time of the conference:
  •  Payment (calculations/volumes/measures open to dispute).
  •  Interfaces with other agencies (things falling down the gap).
  •  Authority’s and others’ capacity to manage the contact.
  •  Changes in laws or government policy.
Now, am I going to argue with that? Good luck to bidders, and it looks as if your contracts are to be just about as one-sided as ours have been, but you will have better hiding places? Finally, the best advice for those considering dipping their feet in the TR bidding process, especially if you are a smaller business, is don't sign anything without good legal advice and without an escape route.

Editors note - 'Authority' refers to MoJ/Noms 

6 comments:

  1. I'm more board chairs had been like Joe I'm sure the situation would have been very different.

    A bit off topic, but worth adding there's the unhappy staff too that bidders will need to take into account. Employee satisfaction is key to productivity.

    Staff are currently Pledging against TR and this can't be hidden as there is a growing amount of probation officers writing about their jobs.

    Other issues such as the book ban and rising suicides can't help much either. Yes, TR cannot be very inviting to bidders right now, despite the £4000 per unit they're set to rake in.

    ReplyDelete
  2. Sorry to break topic but this may be of interest (and maybe informative on a number of levels) on BBC 3 tonight.

    http://www.bbc.co.uk/programmes/b040mz4l

    ReplyDelete
  3. Banged up and Left to Fail

    Natalie seems like any other university student on her Policing, Investigation and Criminology degree, but she has more experience than most. From the age of 13, she was repeatedly in and out of the criminal justice system. It took Natalie nine years to stop offending and she believes it was support from outside - rather than inside the prison system - that helped her change. Natalie's story isn't unique. Nearly 60 per cent of all offenders on a short sentence will commit further crimes within a year of release from prison.

    In this documentary, Natalie explores the impact being locked up has had on young adult offenders like Sephton, who spent most of his adolescence in prison and now struggles with basic tasks such as food shopping and cooking a meal. She also meets those in charge, such as Minister for Prisons and Rehabilitation, Jeremy Wright, to find out what the government are doing to tackle our high re-offending rates.

    ReplyDelete
    Replies
    1. Firstly I'd like to say well done to Natalie. Turning your life around is hard work and a major achievement that deserves recognition.
      But I have been struck over the last week or so with national and local press reporting on the 'staggering' rate of reoffending. Each local paper appears to report the number of offenders reoffending with over 50 previous convictions in any particular region.
      These statistics are obviously provided by the MoJ, and it's obviously creating the impression on the general public that our current system is failing badly, ergo, privatisation is essential.
      I have the feeling that this programme on BBC 3 tonight at 9pm maybe a further attempt to convince the public that probation aren't just up to the job.
      There does seem to be a very bias participation with only Wright and Spurr named as being involved.
      I'll watch with interest, but if it follows the tone of the recent press releases, then I'll take it as a sign of just how much trouble TR is really in.
      You just wouldn't resort to such a tactical campaign if it wasn't.

      Delete
  4. It is Being broadcast on BBC 3 TV at 9 pm tonight ans is the second part of a series called "Crime & Punishment Season"

    Details here: -

    http://www.bbc.co.uk/programmes/p01ssdrs

    the series seems 'bitty' and focused on principles and issues of Crime and punishment - internationally rather than a forensic enquiry of how things are in UK.

    Does not seem to have a programme centred on the restructuring of probation in England & Wales, or what I would have found of particular interest a comparison between the different legal systems in the UK and Channel Islands and Isle of Man.

    I expect I shall need to prepare in advance to retain my composure when they broadcast the arch advocate - Jeremy Wright's - contribution!

    ReplyDelete
  5. Will the government reclaim the cost of such assistance from Capita? I think not!

    http://www.theguardian.com/society/2014/apr/06/civil-servants-capita-pip-assessments-backlog

    ReplyDelete