By Andy Grossman, CEDR Foundation Director
On Monday, the Guardian reported on a survey by law firm McGrigors, that businesses complaints to the Office of Government Commerce regarding public sector contracts had reached its highest level since the recession. It states that there has been a 55% increase in complaints from last year, an amount quadrupled from 2007/8. Of these cases, 89%, as opposed to 45% last year, were investigated.
Stuart Cairns, director at McGrigors, gives some reason to this increase: “The recession has meant that public sector contracts are at a premium. There are fewer contracts to go round, so disputes over how contracts are awarded have become more frequent and bitterly fought.”
Cairns also says that the government are coming under increasing pressure to investigate these complaints as organisations are becoming more conscious of their rights under procurement law and as such increasingly likely to take the matter to court.
In these matters, it would appear that in order to reduce this year on year rise in complaints regarding the procurement of public sector contracts, a change of practice is needed. Moving away from throwing dwindling resources into court cases and investigations and moving towards more collaborative problem solving might facilitate the formation of a more appropriate and achievable contract, whilst reducing the overall spend dramatically. However before this step can be taken, a change in attitude is necessary, away from win-lose culture in business towards a win-win. Essentially many of these businesses could benefit from working together to adapt a contract, rather than setting themselves opposed to the government and fighting it out.
‘The pie’ may be smaller due to reduced resources in all areas, however this could mean there is more opportunity to collaborate and work closely with the other parties to attempt to realize shared goals. There will inevitably be disagreements of some form in business, especially in times of low resources, yet how this is defined is by how these disagreements are managed. Working collaboratively gives the opportunity for a disagreement to become the positive point of change.
CEDR has been looking at the practice of relational contracting (or alliance contracting) of which one facet is that a contract is not just one long term agreement, but works from the basis of building in many shorter term contracts to allow for review and reflection, giving those involved the chance to tackle any substantive issues before the need for any possible complaints. In order to carry this forward effectively a change in attitude is necessary. Perhaps strengthening this through the inclusion of a clause within the procurement process, stating that in the expected event of a disagreement, parties will seek a collaborative solution prior to starting an action, could help change their approach.
Whilst the government looks at getting it right the first time, another area of examination could be the contract itself and perhaps attempting to build in more collaborative working processes to manage the inevitable disputes that arise. At least this way they may not only achieve the adaption of the contract to make it more “winable”, but also find out more about the driving values and needs behind its formation.