Mystery shopper service sees 270 complaints over public procurement practices

The Cabinet Office’s ‘mystery shopper’ service received 270 complaints about public procurement practices in the 18 months to February 2014.

In a report just published about the second 18 months of the service, which was launched in 2011, half (53%) of all cases related to issues with the procurement process. This was down on the 81% recorded in the previous report.

This meant the Cabinet Office saw a rise in its other identified ‘higher level’ issues of concern: the bureaucracy of the whole process (15%); procurement strategy (11%); contract management (9%); and technology and systems (7%).

Within the procurement process group of issues, there was an increase in the number of complaints regarding pre-qualification questionnaires (PQQ), which rose from 33% in the previous period to 50% of all cases.

One third (35%) of the PQQ issues related to financial requirements, particularly in relation to the bidders’ strength. Other PQQ issues included a lack of understanding in how the document would be scored and what constituted a good response.

Other key findings from the report for September 2012 to February 2014 include:

  • Issues within the wider public sector accounted for 70% of all the service’s cases, and within these wider public sector issues, the biggest concern remained the procurement process and PQQs in particular.
  • In central government there had been a further move towards more centralised procurement of common goods and services. “We have seen more cases where suppliers have told us that frameworks were not used where one exists. This is common in the ICT field.”
  • The service still saw issues where suppliers felt that frameworks favoured larger or incumbent suppliers. “The issues here are demonstrated by overly short timescales being set for mini competitions when calling off from framework agreements and the acceptance of ‘pro bono’ bids. Our advice is to allow sufficient time for the market to respond to mini-competitions and to be careful not to encourage uneconomic bids which can waste the time of smaller suppliers.”
  • In relation to contract management, the majority of issues falling below the first tier were payment issues. “Suppliers have contacted the scheme regarding average payment days increasing or where payment has not been made at all.”
  • A number of referrals had been received concerning the procurement of schools Management Information Services in England.

The Cabinet Office also reported an increasing number of complaints from suppliers who were holders of existing contracts, but who were not being given the chance to bid for new ones.

“It seems some incumbents are not being made aware that contracts will be changing in size or structure and are not told when, how or where they will be advertised. Often no rules have been broken, but the problem is simply a lack of communication,” the report said.

“The concern is that this is not only poor procurement practice, but can also lead to time consuming complaints for authorities and potential legal challenges. Our advice therefore is to talk to incumbents. This does not mean giving them an unfair advantage, but just making sure that as the end of their contract approaches, suppliers know what is happening.”

On the mystery shopper service as a whole, the Cabinet Office claimed that all sides had played a part in making it a “huge success”.

The report said: “With over 580 cases brought to our attention [since launch], we have worked to lift the barriers to supplying the public sector and policy gaps are now being identified and addressed.

“Contracting authorities have also taken on the challenge of working with the Mystery Shopper service to resolve issues. Sometimes this means correcting live procurements and often authorities are changing procurement behaviour for the future.”

The Cabinet Office also highlighted the expansion of the service to include spot checks. These see 20 sets of procurement documents checked each month on Contracts Finder; any issues found are highlighted with the relevant department.

The report claimed that 79% of all the service’s closed cases had resulted in a positive outcome. “This includes changes being made to a live procurement, recommendations accepted to change future procurement practice or cases where we find nothing wrong with the procurement process but we are able to assist our mystery shopper in understanding what has happened.”