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How the latest round of Scottish Ministers marketing procurement made jaws drop and agencies challenge the outcome

By Giles Moffat

March 25, 2013 | 6 min read

It’s been 10 days since The Scottish Government wrote to inform agencies whether they had been successful with their tenders for the next four years of marketing activity.

Agencies are set to challenge the rosters

My, there were some surprises. Even within the corridors of the Scottish Government’s marketing department, jaws allegedly dropped (though those same jaws are now resolutely locked for legal reasons). Both Stripe and Newhaven were notable by their absence. Scuppered, for the time being, on price analysis thrown askew by some rogue bidding. More on that later.

Now, no company has a God-given right to keep its public sector business for eternity. Indeed the purpose of these procurement exercises every four years is to keep agencies on their toes, turf out dross, drive value for money, and briefly open doors for newcomers to get in on the act.

For the first time in living memory though, a number of agencies are challenging the outcome. This effectively puts the brakes on the appointment of the new rosters for now.

Only the agencies involved will know their grounds for challenging, but it’s worth speculating on why they might have felt moved to take this action.

I have seen leaked documents showing various scores for various lots, and in a couple of instances it is obvious that wildly unrealistic pricing has had a disproportionate effect on overall score. Pricing from agencies that are in some opinions, not up to scratch, but who must have done a good job on paper.

So out of kilter was one of the bids that I doubt if it could be matched even by freelancers. Alarm bells should have gone off in procurement. Alarm bells should be going off in that agency for, anyone who has worked on Scottish Government business (and indeed related public sector accounts) will know that it is not the gravy train it used to be in the 1990s. Nowadays you might break even at a push. Mediacom, it was reported a few years ago, took on the business at a loss. And when you factor in the onerous mini-competitions required for every piece of work, I predict the bargain basement agencies will feel the pain very quickly. The mini-competitions are an expensive lottery, which Barkers and Merle found out to their cost.

Forgive the bout of nostalgia, but the Chris Dempsey era was undoubtedly the last time the Scottish Government’s roster of agencies was managed sanely and sensibly. Chris and Roger Williams opened it up to a group of agencies – not too many, not too few – all of which were well-suited to the requirements, but had different skill-sets. Chris and Roger handled them judiciously, and treated them fairly. If you were new, you were given smaller projects to prove yourself on, and if you performed well, you were entrusted with more. The best agencies were rewarded, and anyone who under-delivered was punished.

This is how Mars, P&G, Nestle, Unilever, Coors, Kelloggs, Inbev, Bank of Scotland and a thousand other multi-nationals with rosters of agencies operate. They get to know their supply chain. They understand their strengths and weaknesses. They modify their procurement practices to suit the industries they buy from.

They also use their rosters intelligently to their advantage. They play agencies off against each other, which helps set benchmarks on prices, and encourages competition. The agencies strive to be the best, and the clients pay ‘a fair wage for a fair day’s work,’ as Chris used to say. And both parties, as in any relationship, get to know each other: their strengths, and their foibles. Chris and Roger knew their agencies.

As a buyer of services looking for the best deal, you would think it appropriate to get to know the market. You should understand the supply base. You should know your subject.

You can learn more about an agency in five minutes, by visiting the premises, than you will in 18 months of pouring over paperwork.

Since 2009, Procurement (the practice, not the people) has caused nothing but damage. It builds a self-created wall between buyer and seller. A wall made up of piles of paper and spurious spreadsheets. The buyers know nothing about the vendors, and the vendors are spending half their time trying to work out what the buyers are trying to buy. It’s ludicrous. To quote the IPA, the way The Scottish Government handles this is, ‘a waste of national resources, and sets a bad example to commercial sector’.

Some will say, stop whining and play the game. My response is, many of us have learnt how to play this game, and it’s not a good game. The game itself needs to change.

The sadness is, nowadays there is no-one in charge. No Solomon figure whose authority, good judgment, and common sense can be appealed to. Decision-making and authority have been outsourced to the spreadsheet department.

And so, every four years, meaningful and effective relationships are put to the side while the industry goes off on one big ‘blind date’. For the sake of future campaigns, let’s hope the Scottish Government finds that the goods in the box are the same as they were in the brochure. And let’s hope they look more closely at what they are about to buy, and what they are about to discard. There are undoubtedly jobs on the line.

Giles Moffat is managing director of Zeitgeist and [in the interests of full disclosure] is working on Better Together's pro-UK campaign ahead of the Scottish Independence referendum.

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