Tuesday, 24 April 2012

In which I explain something about public procurement to Eoin Clarke


The ever passionate and often completely wrong Eoin Clarke has uncovered dark truths about the relationship between Monitor, the NHS regulator and McKinsey, a leading consultancy firm. As readers here will know, I’m no fan of public procurement (here and here and here)  processes and am prepared to accept that some established suppliers can and do muddy the waters of process. However, in this case there is absolutely no evidence of impropriety – by supplier or contractor. Eoin has made his soup from the thinnest of stock!

Let’s look at the allegations and claims:

1, McKinsey has earned (at least Eoin accepts they did some work) £468,000 from the NHS since May 2010. Note that Eoin hasn’t asked whether this leading consultancy business did any work for the NHS prior to May 2010. I’m prepared to bet that it has done. However, it does not seem to me that paying consultants 0.0005% of the total NHS budget for advice on management and strategy is a terrible thing.
2. Officials at Monitor accepted hospitality and what Eoin calls “trinkets” from McKinsey – a trip to the opera, a seat at a black tie dinner and attending a summer drinks reception. Apparently this practice blurs “...the lines between government and private contractor and should be discouraged especially where a health watchdog is concerned.” There is no suggestion that officials of Monitor acted improperly by taking this hospitality or even that it might have influenced decisions on the appointment of external consulting contractors.

3. McKinsey “...improperly used private channels...to discuss several commissioning decisions.” This consisted of the firm seeking feedback after the tender decision because they hadn’t got the business. It may be news to Eoin but providing feedback to unsuccessful bidders is normal – and good – business practice. And it is also normal for this to be done verbally.

4. Eoin appears also to have a problem with McKinsey asking for something and not being given it – “McKinsey also harried Monitor to prematurely divulge the granting of NHS Trust status decisions...but to be fair to Monitor they sent a fairly curt reply.” So there you go – a consultant asks for information prematurely and isn’t given the information. Anyone got a clue what Monitor has done wrong there?

5. Our feisty investigator gets closer to pay dirt with using private channels to pitch for business – “They canvassed Monitor officials to have an input into decisions over how to deal with Heatherwood &Wrexham Park Trust... This in the end was accepted and McKinsey went on to have an input in the decision to close Heatherwood and flog the land.” When you look at the e-mails Eoin claims for private pitching, one is the sort of e-mail many businesses would send existing contacts and another says:

“Can someone get back to us about this tender?”

So it wasn’t a private deal – indeed the e-mail traffic suggests that there was a tender process since McKinsey refers to being “shortlisted” and to a formal ITT number. In other words Monitor conducted a proper process to appoint advisors for a given project.

6. Apparently hosting (at no cost to the taxpayer) foreign delegations is wrong because “...UK government officials are possibly inadvertently aiding McKinsey's solicitation of business in France, and de facto advancing McKinsey's financial gain.” Shouldn’t the British government be keen to showcase the wonders of the NHS (we know from Eoin just how much better it is than any other health system) and to support British firms in getting foreign business?

7. And finally Eoin complains because McKinsey asked Monitor for a reference. It’s pretty clear that Eoin has never completed a public sector “pre-qualification questionnaire” since that would require at least two (and in one awful case I recall, six) references. And the expectation is that these references will be public sector references from places where the bidder has delivered a contract. Again this is normal and proper business practice.

It seems to me that Eoin Clarke, in his enthusiasm to castigate the current government, has turned what appears to be normal business practice into something of a scandal. There is nothing in the e-mails to suggest that Monitor has acted improperly in tendering for and appointing consultants or other contractors. Indeed, all Eoin can do is call for “clearer boundaries” despite the evidence here that Monitor’s officers – regardless of the relationship with McKinsey – have resisted any requests from the firm that might compromise the procurement process.


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