Rob Levene 27 March 2018

Purchasing professional services

Amid a backdrop of budgetary pressures, a trend is emerging in the procurement of professional services as local councils look for a more effective and innovative way to buy consultancy services.

Preventing project scope and cost creep is an all too familiar challenge for many local authority procurement teams. Picture the scene: a consultant is brought in for three weeks’ worth of consultancy on a project at an agreed day rate only for the project to suddenly experience unexpected internal delays or for there to be a change of requirement mid-project. Suddenly that three week project takes twice the time and as a result, costs double the amount that was originally quoted.

As a spend category, professional services is a difficult one for procurement professionals to get right. Firstly, you’re buying expertise and it’s often hard to articulate your requirements for the type of person who’ll be a good cultural fit in your organisation in a tender document. Secondly, reputations are at risk if an important and costly project goes wrong, so ensuring the right person or team is in place to deliver on the project is critical.

Managing internal demand for consultancy services while keeping track of who is working where in your organisation and for what purpose is another key issue for local authorities. Without close management, visibility on organisational-wide spend and details on what the project is expected to achieve becomes almost impossible to keep track of.

There is another way to mitigate risk, find the right people for your organisation and gain control to avoid increasing project scope and costs. More and more local authorities and other public bodies including the NHS, the police and universities are now choosing to buy professional services via NEPRO, a neutral vendor, outcomes-based solution.

Responding to the challenges posed by buying professional services and recognising the limitations of traditional frameworks, as a neutral vendor solution buyers have access to a vast community of suppliers across a multitude of categories from accounting to ICT.

We’ve all heard stories about contractors appointed to carry out a particular project and staying on with the organisation on a hefty day rate long after the project has finished. Without any firm outcomes or deliverables in place it’s easy to see how a contractor can remain with an organisation far longer than was originally intended, or is hi-jacked by another department for a different project, at huge cost from what was originally agreed.

With a focus on outcomes the solution prevents local authorities from buying professional services without clearly defined goals and consultants are only paid on completion of the project or specific milestones. Local authorities wouldn’t place an order for 1,000 laptops if they only needed 500, and would check that those 500 had been delivered and work as per the agreed specification and the exact same principles should apply in the purchasing of professional services.

This fully OJEU compliant approach is about fully understanding what the buyer needs and finding the right supplier to fulfil the brief. It also helps cut the red tape that comes with traditional tender processes meaning that consultants are in place and ready to start work much more quickly.

There have been countless examples of high profile public sector projects that have cost millions and failed to deliver. Local councils can no longer afford to bring in consultants without knowing the exact outcomes and costs of the intended piece of work. Fortunately, many are now realising that there is another, more effective way to buy the services you really need.

Rob Levene is executive director and co-founder of Bloom

This feature first appeared in Local Government News magazine. Click here to sign up for your own free copy.

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