Don’t believe e-procurement hype

What much of the public understands by procurement seems to surround BBC chairman Gavyn Davies. He has invested £590,000 in UKprocure, an e-procurement solutions firm with Oracle software and four NHS trusts, four primary healthcare trusts and one private health organisation among its clients.

Tories and firms not into New Labour want us to be angry at UKprocure. After all, Gordon Brown has just told Britain’s 300 NHS trusts to buy everything online. Many cry foul, pointing out that Sue Nye, Gavyn Davies’ wife, works for Brown. In the same way, they indict Sir Alan Sugar’s Viglen. That firm has “enhanced status” because it is on the Gcat2, a list of 26 preferred government suppliers to 900 public bodies. Yet Sugar doesn’t just own Viglen; he also gives money to New Labour.

Conflict of interest, avaricious corporations corrupting the body politic in search of fat contracts, cash for favours, Tony’s cronies: it’s a familiar narrative. But suppose there’s another story altogether…

Compared with the US, the UK’s government is way behind on e-procurement. Much of it doesn’t have enough bandwidth to support e-procurement. One year back, industry secretary Patricia Hewitt announced herself “determined” to structure public sector procurement of broadband services in rural areas to “speed up the roll out”. But surf the Cabinet Office Web site today and the initiative appears to be lost.

“Continue to drive forward e-procurement and e-tendering” is, however, Recommendation 21 of the Action Plan of our e-envoy. Moreover, the Office of Government Commerce has just published eProcurement: cutting through the hype. It does indeed cut through the hype. Appendix B shows seven government departments are running e-procurement pilots. Accenture’s Ariba and Epylon systems are being tested by the National Assembly for Wales and the Police IT Organisation. Directa, from Biomni, is being used by the Council for the Central Laboratory of the Research Councils, the DTI and two standards agencies – Driving and Food. Elcom, from Cap Gemini Ernst & Young and Elcom, is having a trial at the Environment Agency.

It sounds impressive. But it isn’t. Two months in, the pilots have together procured less than £160,000 of stationery, office furniture, IT and the rest. Half of everything has been bought by the National Assembly for Wales.

No wonder New Labour wants private sector firms to accelerate government e-buying. Yet its anxiety about lack of progress in this aspect of public service reform is matched only by the desperation of corporate suppliers. They may be avaricious, but they rely on public expenditure to stay in business. So forget about UKprocure and the NHS. The accounting giant, the ad agency, the legal firm, the railway supplier: each would be nowhere without government contracts, whether these are e-contracts or, as seems more likely, plain old hard-copy ones for years to come.