UK

#24 - Warren Smith (Digital Marketplace, Government Digital Service)

The UK's Digital Marketplace

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Interview with Warren Smith, Director, Digital Marketplace, part of the Government Technology in the Government Digital Service. He enthusiastically and wilfully oversteps the mark to meet user needs in public procurement, in public sector procurement and contracting. He’s currently transforming the way that the public sector commissions products and services by thinking small about big problems, and thinking big about small successes.

Transcript

It’s good to have you here, I’ve had you in the list for an interview for some time. Every now and again I like to interview someone from practice, who can bring a completely different view and perspective to what we would call legal, or academic problems, related to public procurement. So it’s great to have someone with a wealth of experience working in practice with public procurement. Speaking of that, could you tell us a little bit about your background, and what is a Digital Marketplace?

Sure. So I have been in procurement for 20 years now, I think. When I was fresh out of university I went straight into a procurement role. Really it’s only in the last five years, I would say, that I’ve been involved in quite transformative projects: working at scale and having a real opportunity to make a significant difference by introducing new ways of thinking about procurement and contracting.

I’ve really been focusing on trying to introduce the concept of user-centred design into procurement and contracting, as well as focusing more on outcomes rather than detailed input requirements, as well as introducing open approaches. 

What does that mean? It’s kind of being much more open about thinking, sharing information and visions, way in advance of actually procuring: so trying to engage with the market earlier. Also open standards and open data have a very important role. For me, making things open is a really fundamental tool for disruption, I think, which we can employ in many different areas. So that’s a little bit about me. 

I am a member of the Chartered Institute of Procurement and Supply, but I tend not to, to shout about that, but it’s a useful background, obviously, in the space that I’m in. But really my interest is in trying to take the focus away from procurement being a driving force, and make it, rather that procurement and contracting are enablers of better public service delivery. That’s a really important point. Often people who I’ve spoken to see procurement as being the end in itself, rather than a means to an end. That’s what’s brought me into the government. 

I had the good fortune of being asked to help GDS towards the end of 2012. I was brought in by the former programme director for the transformation programme, which was focusing on delivering the 25 exemplar services. These were the 25 largest government services by transaction volume, and it was the start of, really, the digital by default agenda within government. 

At this time different policy contexts were being set, Liam Maxwell, the former Chief Technology Officer had been brought into GDS to bring about reforms in the way that the government thinks about, mainly digital and technology. My role was to help rethink procurement in order to support those reforms of digital technology in government. 

So I’ve been here since 2012, and just something to correct you on, Pedro, and this is hot off the press, this week I’ve been appointed as the Digital Marketplace Director. Having been through an interview process, I’m now no longer the interim director, I am the appointed Digital Marketplace Director. 

Congratulations.

Thank you very much…

Speaking of the Digital Marketplace, what are its objectives, and what are you trying to achieve with it?

I think you summed it up quite nicely in the introduction, but basically we are all about helping the public sector buy what it needs to deliver great digital services.

This is a key strategic component of the technology group within Government Digital Service, and it’s important that I just go back to that mantra there of helping the public sector buy what it needs to deliver great digital services, because that, again, is the outcome that we are trying to support. 

Everything we are trying to do is about transforming procurement so that it can help that aim of better public services that are digital by default. We are looking at the entire, end-to-end process of procurement and contracting, and focus on the areas where we think we can make the biggest difference, deliberately, taking thin slices out of that end to end process, applying user-centred design to that, and then iterating wildly, so that we can continue to deliver better procurement and contracting experience for buyers and suppliers. 

Those are our real primary user groups: buyers and suppliers. At the moment we are looking at frameworks quite specifically. I know you, yourself, have spoken about that in some of your publications, Pedro, and I think there’s a real interesting opportunity here. Within the digital and technology space in government we are looking to disaggregate large requirement sets into capabilities that meet user needs, and thinking more about how we might diversify and open up supply chains into government. Actually from that what you can then start thinking, is that the work packages and the contracts change into shorter term, lower value and quicker delivery [pieces of work]. So therefore, the sub OJEU threshold might actually be a really interesting, untapped opportunity there. 

We’re developing the Digital Marketplace so that we can award a framework agreement, then provide an end-to-end buying process where buyers and suppliers use the framework, get through the evaluation process, award a contract, get on and do the delivery, using things like the Open Contracting Data Standard to improve the quality of the data that’s actually the published automatically out into wherever, contracts finder or similar.

Can you give us examples of changes and simplifications that you’ve done to the procedures and contracts for the digital services framework?

Well, actually, we started on that with the G-Cloud framework, Pedro. G-Cloud 7, as in the seventh iteration of the G-Cloud framework, was the first time where we ran the entire OJEU  procurement through the Digital Marketplace, so that enabled us to really challenge the  -- I have to be careful of my use of the word “challenge” describing procurement -- but challenge CCS and government legal department to think differently around  what are traditionally the selection and the award questionnaires that you would normally see. 

We looked closely at the invitation to tender templates as well as the framework and call off contract itself. That was where we changed the supplier application process. A supplier simply had to complete what was called a supplier declaration, where they answer a series of questions which typically would have been the selection questions. That became a page, or several pages within the Digital Marketplace where we reused the gov.uk design patterns for form elements to ask the right questions in a different order than normal. 

What we wanted to do was ensure that if a supplier was new to government, or even any supplier, it was easy for them to quickly decide, “Is this an opportunity that I want to go for?”. 

We wanted them to be able to make that decision as early as possible in the application process, for them to be able to decide, “Actually, no, this isn’t for me, I’m going to decline,” rather than going through a load of questions, only to realise that actually, “This isn’t an opportunity that either I am interested in, or isn’t relevant to me.”

It follows the principle of fail early, fail fast. We found that what might seem like a logical order of questions to a procurement person or a legal person, wasn’t a logical order to a supplier, and we’ve found that out through quite simply asking the suppliers, and undertaking user research with the suppliers to understand, well, ‘what are your needs, and how can we design an application process to better meet those needs’? 

That was really a fundamental point in time where we changed a supplier’s experience of applying to be on a government framework. That’s really the first moment where a supplier who maybe has not previously been interested in doing business with government, that’s the first moment where we’re saying, “Hey, come and get involved with  government,” and so we think it’s really important that that first experience is actually a -- dare I say it -- a delightful one…!

That was the first thing. And then the learnings and the insights we gain from that, we’re able to then apply to subsequent framework applications. Digital Outcomes and Specialists (DOS) was the next framework where we really fundamentally redesigned a broken framework. The digital services framework had received quite scathing coverage within the technology press, labelling it not fit for purpose, talking about the relationship between GDS and CCS as being “dysfunctional”, so we had to, and…..Yeah, absolutely. This was escalated to quite a senior level within government, so we had to make a difficult decision which was, we can’t continue with the traditional approach of delivering procurements and contracts in government. 

We needed to stop, we needed to take a different approach. And that was where we agreed with CCS and Government Legal Department that we would form a multidisciplinary team, we would use the GDS design principles as our guidance on how to design and deliver user-centred frameworks and procurements, and using the body of better practice that is the service design manual to basically guide us in all of those things. 

The approach was: working in an agile way; being open; being more engaging with the market to design a completely different framework agreement. And also going live with what we classed as the earliest, what others would say is the minimum viable product, but actually we wanted to call it the earliest usable product. 

This was the buying journey of digital outcome specialist within the Digital Marketplace, so that needed some handholding with CCS to say, “Look, it’s okay to go live with a product or a service that is not complete, because there is no better thing than putting it in front of real users, who are using it for real,” so that we can actually get feedback from those users, by those suppliers, about how is it working. To answer the question: ‘What do we need to change’? 

We could also to use data, as well, analytics from the usage, to inform our iterative service design. That’s never been done before in government, and I’m always proud to be able to say we’re chalking up quite a few government firsts here. 

My next thing, which hopefully we’ll go on to talk about, is just the fact we can iterate and incrementally improve a procurement and contracting experience for buyers and suppliers. This is a massive paradigm shift, I think, in government procurement.

It is, because usually what I’ve seen over the last, let’s say, 10 or 15 years of working in procurement is that once a certain procedure or practice is developed, and usually it’s done organically without any research and looking at what actually works, and without considering the impact it may have on the supplier side, once that is done, it’s done, and it stays there. 

There’s no incentive and there’s no work to revisit what is being done today, to say, “Okay, if you were redesigning it from scratch, how would we do it? And how would you improve it because you now have different technologies, you have different techniques, you can do things differently?” that doesn’t happen in public sector in general. I don’t see this as a criticism more than as a statement of fact. 

So a few years ago, as you know, when I was working with local councils to improve their practice in contracts below the thresholds, that was very obvious, that I looked at procedural, or documentation for the public procurement procedures that you’re following, and you could see it growing up over the years, with new stuff being added without any consideration exactly about what is happening, or what are the reasons for those extra questions or extra elements of fact or whatever to be added into the mix, and

I think it’s very important to get out of that frameset, and instead look at what is being done today, and say, “Okay, do we really need to do this? We really need to improve this.” On that note, bearing in mind that you’ve done a lot of work in simplifying contracts and procedures, have you seen any correlation, or at least relation, between simplifying the contracts and procedures and increasing the participation of SMEs in public procurement?

Absolutely. There is a strong positive correlation. I think, if I state that correctly, that we’ve seen just by simplifying the application process and being more open and describing our intent and what we need, and describing the contractual situation in plain language, I think that we can demonstrate a significant difference between digital services framework, which is the one that was receiving a lot of the criticism, which had something like 150, 160 suppliers on it, across the UK, to Digital Outcomes and Specialists which now has over 1,200 suppliers across the UK, and over 90% of them are SMEs. 

Now, what that is is us creating the opportunity for these suppliers to do business with government, because as we all know, being on a government framework is no guarantee of every actually winning any business, right? But at least we have created the market so that these significant number of suppliers now have that opportunity.

So getting that step one right is really fundamental, because unless you open the door, you’re not going to enable those suppliers to be able to win the business. That’s the first step. 

What we now have to do, and we’re still relatively in the early stages of Digital Outcomes and Specialists, which only went live on the 27th of April, the day before my birthday. We’re approaching three months of usage, but already we’ve seen something like over 160 supplier opportunities published, and we publish those in the public domain, on the Digital Marketplace, because we want suppliers, and not just suppliers, actually, we want suppliers and the public to see, what’s the demand of government? 

What’s the opportunities that, if you’re not a supplier currently on this framework, you’ve actually now got visibility of the demand of government for digital specialists and services associated with the design and delivery of better public services. Having that information in the open is, again back to the open contracting point, is helping to, transform the relationship between the citizen and the state. 

I think we’ll be able to see very soon what’s the actual business that’s being won by suppliers as a result of the changes that we’ve brought about through digital outcomes and specialists. We already have some data about G-Cloud usage. Since its inception, business through G-Cloud has helped the Digital Marketplace go to sales of something like £1.3 billion as it is now. The bulk of that is through G-Cloud, but I think we’ll see it, I’d be very interested, and wait with anticipation, to see what the shift might be from cloud into Digital Outcomes and Specialists, and indeed the growth of cloud as we approach things like G-Cloud 9. 

We’ve just kicked off a discovery to go back and understand how we might need to adapt the design and delivery of that framework based on an understanding of how the changes of the needs within government have happened since 2011/2012, and also how the market has shifted, as well. 

Again, we’ll reuse the approach we took to Digital Outcomes and Specialists to apply a user-centred design approach to deliver the 9th iteration of the G-Cloud framework.

Speaking of what you were saying before, and classified it as a world first, you’re trying to move the government to adopt open data standards, am I correct? So what do you actually want to do in terms of practical changes to the way that the government works, and what do you think is going to be the impact of adopting open data standards in procurement?

What does it mean practically? Well, first it’s great we’ve made this progress. In its open government partnership national action plan for 2016 to 2018, published on the same day as the anti-corruption summit that the UK government hosted, there are very firm and clear commitments around implementing open contracting, as well as a number of other fantastic commitments. 

That gave the backdrop that we can actually then get on and do something. I applaud Crown Commercial Service for making those commitments to implement the OCDS within their operations by October. It’s fantastic, and same with HS2, and beyond that, across governments. 

I saw this as an opportunity to ensure that we’re doing what we can to support those commitments, which is why I’m championing the Open Contracting Data Standard going through the standards hub process right now. Once that’s mandated, that’ll ensure that the OCDS is used across government as an adopted standard across government for open contracting. That’s a practical step to support that. 

Then, as part of that process, we’ll be understanding, “Well, what are the opportunities and the challenges of implementing open contracting, and the OCDS specifically?”. Because we’re effectively designing and delivering an end-to-end buying and procurement and contracting process, in Digital Marketplace we have quite a unique opportunity to embed OCDS and open contracting as a default component of our own platform development.That’s effectively what we’re doing, and we, you know, our ambition is to be the default place for buying digital and technology within government, the Digital Marketplace to be that, and also we can open up our platform for use by others. 

And in terms of another government first, you know we’ve been approached by the Australian Digital Transformation Office to support them with their creation of a Digital Marketplace, so rather than just simply reinventing the wheel, we’ve already shared all of our code, we’ve given them access to our hub repositories, all of our guidance, all of our know-how, and anything that we can share, we have shared. I’m very excited to tell you, we’re sending two of our team over to Australia this weekend, for two weeks, to help the Australian Digital Transformation Office to really accelerate their own development. I’m really excited to see, actually, rather than simply just giving them access to what we’ve done, how might we actually work from a common code base and not just code, but a common asset base for things like the contracts, the design patterns, etc, to really do, government to government collaboration on an area where we have very, very similar challenges and problems around reforming procurement and bringing procurement into the digital age. I think that’s really exciting. We’ve also been talking to the US around similar things, so I see some quite interesting opportunities to collaborate between governments to do great things.

It’s great to see that you’re able to collaborate across borders with other governments, you know, Australia and eventually in the US, as well, but in terms of the rollout in the UK, one of the things I’ve noticed is that there’s a delay or a gap, or even a complete ignorance, to a certain extent, in other levels of government, in comparison with what is being done centrally, in this area, let’s say, of improving procurement practice, in changing procedures, changing contracts, all that and the other. And that, for me, is very, it’s very strange, because coming from a different country where practice is dictated by law, effectively, everyone works in lockstep, so the procedures are very similar in central and local government, or original government, so there’s not too much deviation. So whatever is done centrally, sooner or later rolls out to regional and local governments in Portugal, but to a certain extent that doesn’t seem to be the case here in the UK. So is there anything that can be done to change and improve the rollout of the great stuff that the GDS is doing in other levels of government?

Yes, absolutely, and that’s a really important part of our aim of GDS to transform government together, and work with the wider public sector, not from a position of imposing central mandate or anything like that, but actually being able to reuse what’s considered to be better practices and standards, ways of working, and practices, to help everybody transform themselves into digital organisations, effectively. 

There’s already been some great examples of reuse and collaboration so, for example, the digital service standard, which is, new policy for central government in terms of design and delivery of citizen-facing, and actually internal systems and services, that has been reused and adapted for local government. Now they have their own digital standard for local government, which is, by and large, very similar to the one that was put in place for central government, but, because they recognised that that actually is the way forward, but it wasn’t about us saying, “This is what you have to use,” they recognised that, they took it, they adapted it to reflect the nuances of local government, and they’re now putting that in place.

That’s just one example, and I know that there’s already some interest around looking at things like the technology code of practice, which is again a policy within central government for digital and technology spend controls, which GDS has the delegated authority from Cabinet Office and Treasury to ensure the right behaviours and the right approaches are taken for digital technology spend.

So this technology code of practice is being updated currently, and I think that will be really great to see that reused across the wider public sector, because that’s about helping government to think differently about the way that it approaches its requirements for digital and technology, for service design, for making sure that user needs are at the heart of that, that you’re disaggregating, you’re favouring more competition, from a broader and more diverse range of suppliers, you’re using open standards, you’re making sensible decisions around security, and you’re supporting, effectively, delivery of government as a platform. I think there are some really interesting opportunities. 

There are going to be some interesting conversations along the way. Some of these things are different to some of the entrenched ways of working, and ways of thinking. Helping people to be comfortable with using, for example, public cloud services, you know, more utility-type services, which can be consumed on a pay-as-you-go basis, rather than on-premises infrastructure, takes time. That requires being available to help coach and mentor, and to build the capability and the confidence of people within government and wider public sector who aren’t used to this new way of thinking and working. That’s very important.

One final question. I saw last week a blog post written by you and Jason Waterman from the Crown Commercial Services, about working together to simplify the contract language, and the way that contracts are drafted in public procurement. Can you tell us a little bit more of what you’re trying to achieve, and what are going to be the next steps with that?

Yes, sure. This is, I think, one of the most exciting things that I’m involved with currently, and will be involved with going forward. This is an opportunity to fundamentally transform contracting and procurement within, initially, central government, but I think once we go through the project we’ll see the wider use cases. So Jason Waterman, who’s responsible for policy delivery within Crown Commercial Service, he came to me with a, kind of, a plea for assistance, let’s say. 

Having seen what we’d managed to achieve for digital outcomes and specialists, in terms of a very different way of working, and an output which was a framework agreement that was plain language, it was HTML, I mean, imagine a contract in HTML rather than .docx [laughter] which conforms to the GOV.UK style guidelines, which are very strict quality control to ensure that what gets published on GOV.UK is actually clear, simple, etc.

Very briefly: the process we went about to design and deliver that framework was we had content designers who are actually holding, let’s say, holding the pen, in a digital sense, who are writing the content, but taking input and working alongside procurement and legal subject matter experts to ensure what was created was correct. 

So rather than it being legal or procurement people who were holding the pen, it was people who were trained in designing content. So that gave us a very interesting opportunity to think very differently about the structure, the form of the language, the layout, the usability, the interaction of a government framework agreement. Now, this is not to say that what we’ve delivered for digital outcomes and specialists is the finished product, it’s the nirvana, but what we have done is prove a point that you can apply a very different way of thinking and working, of user-centred design and thinking of the thing as a digital product. 

It’s for the internet, it’s of the internet, it’s applying the digital age, to an area of government that has yet, really, to be transformed and disrupted in this way. To go back to one of your comments earlier, Pedro, is these contracts in government often, accrete over time, based on, case law or whatever. They may have been through a legal challenge and therefore a successful upholding or whatever it meant that we need to do things in a certain way. 

I wanted to introduce the idea that actually we can challenge that in a sense of, “Let’s understand, what are the user needs of a contract? Who are the users of a contract? What are they trying to do?. In terms of the model contract in government, “What currently is working, and what currently isn’t working?” and you’ll see on that blog post, there’s a picture of a contract, or actually it’s a framework agreement, which has been hacked by the user. 

They’ve gone through it and they’ve stuck little sticky notes into the important areas, and they’ve put handwritten labels on that to help them navigate and get quickly to the points within the contract that are important to them. So why don’t we actually design a contract based on an understanding of what the important points are? 

I know we’ve spoken in the past about, one-page summaries, or whatever, but you know, by thinking of this thing as a digital product, we have a unique opportunity to design something that meets the needs of the buyers and the suppliers. Actually thinking of the users being the people who actually need to work together on a day-to-day basis to design and deliver a contract which actually helps buyers and suppliers successfully deliver projects, or whatever it is that they need to do to have sustainable commercial relationships that meet the needs of those two organisations. 

When we start thinking in those terms, there’s a very different set of opportunities which start, coming to the surface. What about if, instead of thinking of the model contract, which is the usual starting point, what about if we have model terms? 

Those model terms themselves will be plain language by default, but also possibly visual, as well as language. They could be visual to help convey what are often complex concepts in, you know, either intellectual property or liability or exit or whatever, that they can actually visualise as well as describe clearly. 

And once we start thinking of model clauses, once we then start trying to understand, what’s the context? What’s the commercial context that this particular contract is there to meet? How would we then assemble those clauses with an understanding of what that context is? So we right-size a contract based on an understanding of that context, rather than starting with all possible clauses with some guidance around, “Well, you don’t, you take this out,” or, “You make sure this is in,” which means you’ve got a really unwieldy starting point. We actually build a contract based on an understanding of what that context is. 

As a digital product, it also means we can put in, and weave into it, the open contracting data standard, so that we simplify the ability to actually disclose consistent, machine-readable data into portals such as Contracts Finder, or the other ones that are available, or even any web service where actually they can just take this information, because it’s publicly available and it’s consistently machine-readable. 

So really, what I wanted to do within that blog post with Jason was just set out what we envisioned is something that’s going to be very, very transformative across all of the common goods and services of government, not just digital and technology. We’re going to be recurrently building the team, and we’ll be kicking off a discovery and then going through the design phases of the service design manual of discovery, alpha, private beta, public beta, then into a live service, but even when it’s live it then won’t be sitting still and stagnating, it will be subject to continuous improvement based on user feedback, user needs and data.

Yes, I think that’s a great project, and something that is going to take some time and energy to get going, and get it to the level it needs to, but I totally agree that is an area that needs to be looked at, and I was listening to you, and effectively immediately came to mind something that has been used for ages in international contracts, or international trade, which is what we call Incoterms, which is effectively a term that contains a clause which is very  clear and very detailed and very stable, so that when you say that whatever you’re buying is subject to Free On Board, which is the name of the Incoterm, you know exactly what it means in any context. So, in effect, to a certain extent, I’ve written about that, on my blog, that one of the things we should be doing in procurement, instead of having only the CPVs for the procurement procedures is having something similar for the contracts and the contract delivery, so some sort of Incoterms for procurement. So I’m really, really excited that you guys are looking into this, and perhaps that is an area that you could explore as a starting point, to see what is out there and what is working already, in a completely different area of work.

Thank you, yes.

We have to finish, it was a great, it’s a shame, I mean, we could have kept on talking for another hour or so, but we need to close it down. So thank you very much for accepting the interview request and giving us almost an hour of your time for a really, really entertaining and engaging talk.

 

 

#13 - Ama Eyo (Bangor University)

Electronic procurement and dynamic purchasing systems

Interview with Dr. Ama Eyo, Lecturer in Law at Bangor University and Director of the LL.M in Public Procurement Law and Strategy.  Ama has done extensive research on electronic auctions in public procurement and has now turned her attention to dynamic purchasing systems.

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Transcript

Let’s start with a small introduction to talk about e-procurement. How do you think e-procurement is going to change in the near future?

E-procurements over the last couple of years, we’ve seen significantly how the attention has turned towards modernising the way procurement processes and procedures are undertaken, as well as in terms of the whole lifecycle of the procurement process end to end, ensuring that e-technology, the advantages that come from it, are deployed within the public sector. Almost in the similar way as the advanced processes we have in the private sector. So looking forward to the next couple of years, what I envision that is likely to happen is more public sector world is going on board with this new appetite, I mean when we look at regimes, such as the former Eastern Europe, they are picking up pace and there are a lot of electronic procurement activities going on there. Then from April next year, with a mandatory e-procurement that’s going to come into force, hopefully, we would likely see more traditional procurement practices giving way to less paper-based transactions and more digitalisation, so that’s something we should be looking forward to.    

It’s not only in Eastern Europe, I mean, Portugal has been using e-procurement as the default way of organising procurement procedures since 2009 I think?

Yes, I mean, the advantage of regimes such as Portugal is that they’re given the kind of learning experiences that the younger generation of EU member countries can look forward to. Practical lessons is to some of the success stories as well as share in some of their faulty experiences in order that those experiences are not repeated in the new regimes, because one of the things that we need to be very conscious about is that the deployment of e-procurement does not, on its own, solve the bad procurement practices, it is an enabler, so we still need to make sure that there’s appropriate training and there’s appropriate specialisations in relevant areas.

How do you think that dynamic purchasing systems are going to fit in in a world where procurement needs to be done online by e-procurement tools?

Dynamic purchasing systems, as we all know, is a procedure which is available for contracts, for works, services and goods, and mainly commonly used with requirements available on the market. Its main distinguishing factor is the fact that as a procurement tool, it is to be used on a completely electronic platform. So for organisations who would be using this tool, it’s possibly the first step towards an end-to-end electronic process engagement that they would be involved in. It could be used potentially as a means of them gaining practice and experience with electronic procurement technologies.

But why would people start with the dynamic purchasing systems if they need to do electronic procurement, why not just adapt existing procedures and do them online?

I think one of the advantages of the dynamic purchasing system is the fact that throughout its lifetime, it’s going to be open and is going to provide access to a pool of contractors. So potentially, what this means is that if you are engaging in a procurement where you want to keep afresh, or you want to keep your options open regarding potential suppliers that may likely become appropriate for that market, this is a tool that could potentially enable you take advantage of that option, because unlike some other practices, I mean, it’s not going to be the solution for all contracts, we all know that, it’s not even being used or touted as such, but it is for commonly required purchases where potentially the contracting authority wants to dispense with a need of going through the whole full tendering processes at each specific time, but then have a platform of potential suppliers, so it gives it that flexibility to bring in new supply base, while at the same time encouraging other good procurement practices if deployed effectively.

True. If my memory serves me well, DPS, dynamic purchasing systems, were introduced in 2004, in the directive 2004-18, am I correct or wrong?

Yes, they were.

So, with over a decade of potential experience in the use of this procedure, why are dynamic purchasing systems not being used more often?

Potentially I think one of the main drawbacks of the old regime on the 2004 directive was some of the requirements in the way dynamic purchasing systems were organised. For example, one of the requirements was that indicated tenders had to be submitted on every opportunity, and also the fact that a lot of systems were not set up at that moment, infrastructure was not ready. At the moment, we do have on the shelf tools that contractor authorities can buy into, that its experience has been gained over the years generally with e-procurements and then the new framework has also, in some ways, enabled the system in a better manner, in such a way that what needs to be done at the outset, it’s to clarify the qualification information of the suppliers and that are admitted onto the framework, with less requirements upfront at that stage.

One of the things I’ve heard on the grapevine about dynamic purchasing systems and why they’re not used as often as they could be, particularly as an alternative to framework agreements is that they imply an increase in transaction costs over the lifetime of the system

Yes. In reality, you will have that drawback still coming in, but again, the decision as to what procedure a contracting authority would elect, it’s based on a number of reasons. Some may be in-house, strategic reasons, and those kind of decisions may be what influence the uptake or maybe they decline. If we look back to things like electronic auctions, for example, we know that when they first started out, because of the government funding, there was support, that was given to support the uptake, a lot of contracting authorities used them, but it’s almost like it’s now on a decline, but again this is something that each contracting authority has to make on the case-by-case basis as to whether this is suitable for them. There are resource implications that have to be looked into. Would a contracting authority prefer to have a standard contract established for a period of years, and dispense with the need to go out to the market every so often, or is it the market’s such there might be benefits in opening up the supply base and inviting new suppliers who could help refresh what is available and out there. So it’s a consideration that needs to be made on a case-by-case basis. Obviously a lot of contracting authorities are treading with care to make sure that they only use it and not create additional burdens on themselves.

True. But one of the things I’ve heard, or one of the things I personally consider to be underlying the reason why framework agreements are more popular than dynamic purchasing systems is that on a framework agreement, you have a higher degree of control, it’s almost the system of set it and forget, you do a selection stage or framework award stage at the beginning, and then the framework is set and is not going to change for its duration, whereas with the dynamic purchasing system, it implies a need and an interest of the contracting authority to be up-to-date with what’s out there in the market and to accept new suppliers into the system.

And that totally aligns with what I’ve just been saying, that it’s a strategic decision that would need to be made by the contracting authority as to what is the imperative for going for dynamic purchasing system. We recognise the fact that it’s one of the advantages of the current regime, is the fact there’s a number of flexible procedures out there for each contracting authorities to choose from, the directive does not mandate as to what must be used on each occasion but each contracting authority takes into consideration what it wants to procure and it’s enabling environment in terms of any national framework that may regulate or implement the directive in future, and that would be the rational for whether it would opt for this or not. Obviously, what we are likely to see in the future is that, for contracting authorities who have not had the experience of monitoring this or using it, the other additional burdens of, and the loss of control which you have mentioned could potentially deter them, but again, what we are seeing in some sectors, especially from local councils here in the United Kingdom, for passenger transport services, is that they seem to find this suitable for that kind of requirement, whether it is the financial agenda or imperative, or whether it is the fact that they want to get, to refresh their market that’s making them go for this, I do not have the evidence to say, but we can see that it’s picking up pace, I mean I’ve been monitoring the use recently, and it’s picking up pace at a much faster rate than before, but only time will tell whether it’s something that is sustainable or whether it’s something that’s likely to die out once the initial inertia is off.

Do you have any numbers?

I couldn’t quantify them but I mean, if you look at current notices, there are about 24 out there.

Which is still a very small number nonetheless.

Yes it is a small number and they seem to be limited to certain sectors. Again, it might be just that somebody’s waiting for someone to use it and then learn from that experience, who knows?

What sectors are those?

The councils are using it, like I mentioned, for, recently home to school or college transportation. With those few examples of set-up or selection by the HMRC, there’s also business and management consultancy related services being set up using this approach, the dynamic purchasing services. Again, you can see that the imperative for this is almost that they don’t want to lock out potential suppliers in the market by using a framework, but then they’re also keeping in case that requirement is not actually used by the end of the day, so it lends itself to that flexibility, and that could be one of the reasons why certain contracting authorities would go for it and others may not go for it, but only time will tell whether the use would gain more acceptance.

Are we seeing a focus on certain contracting authorities or certain sectors?

My research has shown that a number of councils tend to use it, but more towards the Social Services kind of requirements, yes. There’s a couple of community-based interventions that are being procured by this procedure, well, by these routes to market, let me put it that way. Again, you would say that it would potentially be maybe sectors that were under the excluded services regime that are thinking that, ‘OK, we could use this as a way to see what is out there, we know and how to operate things more easily.’

In terms of the advantages that dynamic purchasing systems bring over other procurement procedures and techniques, which ones would you highlight?

I think for me, the most important one would be the wider choice of potential suppliers that are out there, giving the duration of the system, because unlike possibly the framework that you were set up for four years and the suppliers are locked out, this gives you that ability to refresh the pull of suppliers who can participate in that opportunity. Then also, potentially, if in future you have new requirements that can be put in within the current advertisement without breaking the rules on modification or new contracts, that could also be catered for in a more flexible way, so those are some of the key benefits of the DPS.

And on the other side, what drawbacks will you have?

I think, like I mentioned, like you mentioned, the loss of control is there, and obviously if it’s not money taught properly, it could end up in disastrous consequences. I would chip in here with a practical scenario of what happened in one of the cases where this system was used to set up passenger home to school transport system by council. Unfortunately, the nature of the system was such that it meant that vulnerable members of the society were kind of affected by the constant change in the service provider. Essentially, what happened was that the council forgot to exclude the transportation of students with autistic needs from their requirements, and some of the parents complained that it was very difficult for their kids when a different taxi company or transport service turned up to pick up their kids to school. So these is some of the things that need to be looked at, what are the requirement, what are the needs of the stakeholders for the requirements, and how can that be carved out in such a way that while trying to get the imperative of value for money, which seems to be what is driving it amongst some councils, we don’t lose the stakeholders’ needs and concerns in the process.

But that is true for any procurement procedure, I mean, what you’ve just described could have happened as well with the framework agreement.

Yes it could, but you have a longer system of control, but the way this was was that this particular council had a situation where for, it was unable, it actually intended establishing a contract with some transport service providers, but it was unable to do that. The loss of continuity had more effect than if there was a longer term contract in place.

How do you think we could increase the use of dynamic purchasing systems in the near future?

I think one of the good things that we could do, or one of, it’s probably sharing of experiences. In my conversations with some of the councils, one of the drawbacks is that traditionally, people kept doing things the way they’ve always done them, without thinking about how innovative, I mean, nowadays we talk about innovative procurement. Yes, innovative procurement can be, you know, going the long-haul, but maybe, if a rethinking the way we were accessing the market, maybe rethinking is there a possibility for DPS, would it be suitable, that can be one of the ways to improve its, increase its use. Also sharing the lessons, the poor lessons that have been realised from practice so that other councils don’t make those similar mistakes. Personally, my first encounter with DPS was a while back, it was in 2010, and this was before it became really popular, I mean it’s not that popular in the UK but as popular as it is now, I was actually shocked initially when the option was presented on the table as one of the possible routes to market, but reflecting on it and reflecting on the lessons that we learn from that exercise, I can see some of its benefits, this was, we used it to get training associates for teacher qualification training, and it was used to actually revitalise some of the pool of trainers that we had on the contracts with the organisation that I walked with at the time, so I can see some of the benefits, but again, we need to think about how do we deploy it in a way that brings effective realisation for consumers of these services, as well as the contracting authorities.

Just to finish it off, in dynamic purchasing systems, are you including it in the materials of the LLM procurement law and strategy?

Yes, it is part of the module that our students are to, our students take, and one of the things that we’ve done is actually for them to learn how one of the local councils here in Wales, Cardiff Council, has used it practically for Social Care Services as well as the home to school transport, as well as the practical lessons and drawbacks that they can pick from these experiences.

To conclude the interview, I would like to move the discussion into the LLM. So you started, or we started the LLM back in 2011, it’s now 2015 or 2016, in the last five years, what has changed in the field of predicament and in the way that we teach procurement subjects to students?

OK, great, thanks for that question. Uniquely, one of our imperatives in introducing the LLM was to provide a pool of training to experienced and inexperienced procurement staff. Over the years, we noticed that public procurement was taught at the Masters level, the postgraduate level, so one of the things that you’ll be pleased to note is that in order to enable some of the younger participants in our community to graduate from university with some knowledge of procurement, so we’ve got a module, we’ve actually got two modules at the undergraduate module. This is a significant change in that they are being equipped with legal education, albeit from the procurement and the strategic aspects of engaging in public sector contracts, and some of them have gone out to tender which has served them well either in private or the public sector. In terms of the distribution of offerings that we have on the module, the unique aspect of our programme is that we see that, well you cannot do procurement without the knowledge of legal principles. However, legal principles can only take you so far, you also need to have an awareness of some of the strategic imperatives that drive the organisation when engaging in procurement activities, and this is why we feel that there is a need to align both aspects. So in our offerings we combine those kind of issues, so the students look at not only the law but also the corporate strategies, as well as national and international imperatives.

Thank you very much Ama, I think that’s a great way to finish the podcast.

Thank you for having me and do have a good day.

You can find me at my blog Telles.eu or on Twitter where I use two handles, @Detig for general discussion and @publicprocure for public procurement related topics. As ever I am very grateful for the support of the British Academy Rising Star Engagement Awards which made possible this project, which includes both the podcast and also the conference.

 

 

#9 - Franco Peirone (University of Piemonte Orientale)

How can we minimise corruption in public procurement? A look into the USA, UK and Italy

 

 

Interview with Dr Franco Peirone, a Postdoctoral researcher at the Department of Business and Enterprise at the University of Piemonte Orientale in Novara, Italy. Franco’s carried out his doctoral research on corruption in public procurement and remains an active researcher in this area. It is no surprise then that the topic of the conversation is corruption in public procurement, in particular the experience in the USA, UK and Italy.

iTunes

Transcript

Thank you very much for accepting, and also thank you for accepting to speak at such a late hour. It’s almost like, as you said, a late night David Letterman Show.

It’s true, but it’s good.

Let’s start with a short introduction about yourself and your PhD research.

I started my PhD research at the University of Turin. Everything hasstarted during the economic crisis in 2011, I was just come back from the Maastricht University where I spent a period within the Erasmus Program, and the focus on Italy was really high, because everybody was scared about Italian historical deficiencies, such as corruption or inefficiencies in the public sector, so I tried to discover what really went wrong in the Italian public sector, and I decided to draw my attention on public contracts and corruption. To this end, I decided to focus on anti-corruption systems and particularly on an anti-corruption system that really works well, as the United States was, and for this reason, I spent a visiting period at the George Washington University under the supervision of great teachers, as Professor Schooner and Professor Yukins, and there I developed some conclusion about corruption, public procurement and public policy.

Once I came back to Italy in 2014, I was able to compare these two anti-corruption systems and focus more on corruption in public procurement. What does it mean? Which kind of frame we can think about it, and which is going to be the next direction of public procurement and anti-corruption tools? My PhD thesis, at the very end, really focused on compliance and ethics programs. They could be considered a broad and flexible anti-corruption tool. It is really interesting that anti-corruption programs, as compliance and ethics programs, moved from one legal system to another one, from the United States they have been spread all around the world and they have been implemented in Italy, in the United Kingdom, in Germany as well as in Japan and in Australia. It’s really interesting also noting that anti-corruption programs have been moved twice; there has been a double legal transposition, for instance, in Italy. From the United States to Italy, and from the private sector also to the public sector. So now we’ve got compliance programs both in public and in private sector in Italy. 

Let’s focus for a minute on those compliance programs. What do they entail? What’s included in them?

Compliance programmes are an interesting topic, because they bridge together criminal law, administrative law and public procurement law. Compliance programs were born in the United States legal framework for avoiding the corporate liability in case of an employee misconduct. The legal assumption at the basis of compliance programs is the criminal law principle of corporate liability. Due to that, if an employee commits a crime, he acts on behalf of the corporation, and if the crime can advantage the corporation itself, also the corporation has to face a trial. Corporations are therefore held accountable for the crimes committed by the employees unless an effective and compliance programs is implemented. To this end, a compliance programs consists in a set of tools such as code of conduct, training programs, auditing, reporting, disciplinary measures, directed to prevent and to repair the employee misconduct such as corruption, for example. By criminal point of view, a criminal law point of view, by adopting an effective and compliance programs, corporations may demonstrate to have used all the force needed to prevent misconducts or crimes such as corruption.

Do you apply the compliance programs before the crime occurs, or after the crime occurs as a means to reduce the impact of the crime?

Well this cuts in both ways. I mean, having a compliance program is both important having ex ante, that is before the crime is committed, because in this way you demonstrate that the crime has been committed by one employee of your corporation, but you have adopted all the needed preventive measures, but you can also adopt after the crime has been committed, so in this way you can demonstrate that you have adopted all the measures needed to repair, such as affronting payment to the victims or collaborating, cooperating with the prosecutors authorities. In this way, you can demonstrate to be a good corporate and obtaining lower fines, or be even absolved during the trial. It is interesting, this approach has been adopted by all the anti-corruption tools, all around the world, and there is no a great matter about which kind of responsibility the corporation is facing with. It’s no matter if it’s called criminal responsibility, rather than administrative responsibility, or something different. What is important is that all the anti-corruption legal tools take corporation as accountable for the crime committed, so all the corporations all around the world need compliance programs to prevent, or to repair, what has been done by its employees.

Okay, but what legal systems will actually demand the compliance programs? Is it just the USA, or do other jurisdictions also demand that?

No, lots of jurisdictions demand that. In Europe, it’s the case of Germany, Italy, United Kingdom, as I already told you. What’s important, and it’s really interesting is that the United States government has gone beyond. Interestingly they adopted compliance programs even in public procurement law, because through compliance programs, the United States government can select which kind of corporations it wants to deal with. The government use compliance programs as a benchmark for corporation reliability in government contracts. This has happened since 2008, the compliance programs have been implemented and required for federal contractors within the general legal framework for federal contracts in the United States. This is called responsibility determination. It’s a way to testify the integrity of the contractor, and for justifying this integrity, the government requires that a contractor has to have compliance programs.

So how is the assessment done? So you say it’s used by the federal government to assess a contractor.

Well, it’s done before getting the award, the Government looks if the corporation has implemented an effective compliance programs. The Federal Acquisition Regulations that are the general legal framework for this kind of government purchasing provides that before the award is done, the compliance program has to have implemented within itself a code of conduct, a training program, and especially such kind of measures that can prevent corrupting activities from the corporation in governmental contracts. So it’s the last stand that the awarding authority does before making the award. So in the United States the perspective is before evaluating the tender and just at the very end evaluating the contractor, because it’s a kind of cost-effective perspective. In this way, they are just going to give the award to really responsible contractors, who have implemented within themselves all the needed measures to prevent corruption.

So why don’t they do that at, let’s say, selection stage, like we have here in Europe?

This is a really interesting topic, and the legal thinkers from Europe and United States really discuss and argue about this. From their perspective, they do at the very end, because it could be perceived as an anti-competitive issue, stating who is a good contractor before and so will limit the competition if they will do this at the very beginning of the award selection, as we do in Europe. Another point could be that, by the United States government point of view, they think that in this way they can select the good contractor at the very end, and so it is really cost-effective because they just can pass to another contractor if the first one has not implemented the compliance program. It’s a really different perspective. I think the United States mood is not really the most objective way to award the contract, but at the very end it really complies with the law and ethics, because these compliance programs are really strict and the Governmental Accountability Office really takes care about integrity from governmental contractors.

That is the view in the US. You said before that the UK, and also Italy, they do have compliance programs. How do they compare with the American one?

Well, the implementation in Italy and in the UK have been really different, and I have chosen these two countries because they are both EU countries, but it’s a good way to show how it’s difficult and different implementing legal tools from a system to another one. Italy has adopted compliance programs in 2001 for regulating its corporate criminal liability, but the Italian implementation of the model has substantially failed, because several reasons. The legal tools for supporting the model, such as the code of conduct for the training programs, have been poorly realized in the Italian framework, and many Italian corporations have just copied the standard compliance and ethics program without adapting them to their specific needs, and last, the list of criminal conducts that the corporations have to avoid is really too extended. As a consequence, corporations cannot really focus on the white-collar crimes to prevent, such as corruption, and so the deterrence effect is really low in Italy. Lastly, the model has not been used by awarding authorities to stimulate governmental contractors’ reliability. They have been totally ineffective in promoting the integrity in public procurement.

So in your view, what should have been changed in the transposition from the USA to Italy?

Well I think what we should do is linking more criminal law, public procurement law and administrative law - this would be really a good step in promoting integrity in public contracts, if each kind of contractor will be proven and tested by its integrity within the supply chain, and with its commitment to integrity.

It’s really notorious that all the Italian corporations really have great problems with managing integrity within themselves, and training its employees to towards ethics and compliance with the law. By a legal point of view, as I say, the Italian model is really complicated because it is referred to such a kind of not-criminal liability of the corporation, because there is, after all, the criminal law principles that a corporation cannot be sanctioned by criminal sanctions, but must be sanctioned otherwise. This really shows that the legal principles can hinder the effectiveness of compliance programs. As I see, otherwise, as we were mentioning, the UK government has implemented the same tool in a really effective way, because they did not stick on with really difficult transposition of such kind of corporate liability. They have just set up a new, completely new criminal law provision that is the “failure to prevent bribery”. If a crime is committed within a corporation, the corporation is sanctioned just for having failed to prevent a crime, such as bribery, within themselves. This has been done within the Bribery Act of 2010 that has been considered the most advanced legal tool in fighting corruption, and the United Kingdom government have done really well, because it has also stimulate the corporation to commit themselves towards integrity, for example promoting the whistleblowing against other corporations or promoting the self-reporting during criminal trial. All this stuff does not exist in Italy, because we move in another, totally different criminal law context, which does not allow this kind of cooperation among corporation and public authorities. The overall approach in Italy is really bureaucratic, it’s really rigid, while in the United Kingdom, as I’ve seen, as I’ve studied, it’s really flexible and proactive, and it really helps to ensure integrity within the public and private relationships.

My question will then be, if that is the case, how can you be sure that the UK model would work in Italy well, when the American one didn’t?

 This is a really good question. Well, I think that the path, which at this point will be operating at the EU level, should be settled while implementing the new EU Directive on public procurement. We know that corruption is a really important point, as everybody has noticed, within the directive, because as we say at Article 57, we see corruption as a ground for exclusion, it could be considered corruption according to the national law of the tenderer, rather than the national law of the awarding authority, rather than the EU directive, the notion of corruption in directives on internal security, or according to EU convention against corruption. So the focus on corruption is really high. As I see, Article 57 could represent a step for all the awarding authorities in all Europe to evaluate corruption. So commitment to integrity for the corporations, no matter what the legal framework is at the basis of the national legal system. By operating at the EU-level the awarding authority, they can decide themselves if the corporation has effectively implemented a compliance program, if they have effectively committed towards integrity.

In your view, what should change at the EU level?

Well at the EU-level I think that it could be and should be improved the function of compliance and ethics program. Article 57 of the new EU directive really provides the possibility for the corporation and for the awardee to adopt the self-cleaning measures, but these self-cleaning measures have just been viewed until right now as a general provision that could be considered as an exception to exclusion, but cannot really push a corporation to act with integrity and complying with the law. I think Article 57 is an interesting starting point, but should be really implemented by the national legal system, giving more broad scope to compliance programs and where it is possible being required to the government a contractor as actually happens within the United States legal system.

Awarding authorities at the EU-level have a real important task right now. Being able to evaluate if a contractor could get the award because it complies with integrity and at the same time not being too much strict in evaluating the corporation if it’s not complying with a traditional scheme of compliance and ethics programs, because we know that these awarding authorities operate at a really low level, so they have not the same human resources or technical capacities to debar a company as happens in the United States legal framework. So it’s a really hard task, but I think the commitment to self-cleaning within the compliance and ethics program is the mood needed to merge together awarding authorities and corporations towards integrity within public procurement.

Do you think that should be then at the contracting authority level or at the member state level, or even at EU level? Because it’s one thing for you to, let’s say, block a company that has been accused of or been found involved in bribery actions as a contracting authority. It’s something different for the company to be sanctioned at the member state level or even at EU level.

Well, as I see, I think that what we can call the responsibility determination, I mean, verify if a contractor is good for getting the award, could be done at the awarding authority level. So each kind of awarding authority could be done for itself. Usually the awarding authority is the authority who knew more about the contractor, so should have the needed discretion for giving an award or not, according to Article 57, to the grounds of exclusion. What shall be instead done at the Member State level, rather than at the EU level, I think should be the debarment or the suspension of the corporation. In this case, a company, the corporation that has been debarred from an awarding authority, from a single Member State state, should be excluded from all the contracts from all the European Union awarding authorities. As I said, this is the same way they have done in the United States legal system. If a company has been debarred, let’s say, at the federal level, the same company cannot get an award at the state level. The debarment is automatic. So, as I see, we have started doing responsible assessment and it should be done at the awarding authority level without prejudice to the corporation, while a serious administrative decision as debarment it should be done at a higher level, maybe from a higher authority which should have extraterritorial jurisdiction, I mean operating in all the European Member States.

Very well. Speaking still on corruption, what should happen to contracts where corruption is found? Public contracts? 

Yes, sure. This is another topic I’ve dealt with during my PhD thesis, and starting from the United States legal system that has been my main reference, it’s really interesting noting that within the United States legal framework, the awarding authority has a really large discretion to terminate the contract if it’s proven that there awardee obtained the same contract due to corruption. There is no need for a criminal conviction for terminating the contract. It’s enough having a decision from the same awarding authority that certifies that the corruption has happened within the award. Nonetheless it is interesting noting that in many cases, especially in the most expensive contracts, even in front of corruption, awarding authorities prefer not to terminate the contract and going along with the original, even if criminal, awardee. This is the notorious case of Boeing, the case is also known as the Darleene Druyun Debacle, wherein a public official has manipulated the score in favour of Boeing and the company got the award. Well even in front of corruption, the needs of the military sector, in this case, the overall interest of the government, always prevail, and so the awarding authority preferred to continue the contract and not to terminate it, and continue with the previous awardee. I would like to underline that this happens also in Italy and also in other European Union Member States. The public interest to fulfil the contract always prevails. This also happens within the Expo case, that is a big case of public procurement corruption in Italy.

Which Expo? The Expo in Milan?

Exactly. Within Expo event in 2015 there was a big corruption scandal about the award of the public works for building the main pavilion, the main infrastructure in Italy, and even if it was possible to terminate the contract since they awardee had corrupted the award commissioned for such kind of public works. The supreme admissive judge in Italy decided the contract was to put on a compulsory administration that means that there is a legal expert coming from the State that managed the award, but the contract had not been terminated because the governmental authorities prefer not, they never want to terminate the contract, and this at the very end penalised the honest contractor because even in front of big corruption, they never get the award.

There are two different things here. One is a public interest in getting the job done, and I suspect that more often than not the contracting authorities don’t really care about the corruption, they just want to get the job done, because at the end of the day, that’s where their interests lie and also that’s where they’re exposed in terms of reputational risk. Whereas the corruption, it’s almost like, okay, so they’re corrupt but they’re still doing the job, so you need the job done. So it’s probably underplayed by the contracting authorities, in the decision makers’ heads, in their own framed set of values.

I absolutely agree with you, exactly.

So how can we change this?

Well, I have similar view to this regard. I mean, what could be done and what should be changed in this way it is preferring to terminate the contract and going on with another award. There are several contractual tools, they are called by Transparency International integrity pacts. Through these paths, adopted within the award, it is possible to provide that if the awardee has corrupted they award commission, and so the overall award has been corrupted. It’s possible to instantly terminate the contract and get the contract to the second economic operator within the award or to the other competing operators.

The thing is, it’s easy to do that if you catch the corruption, or you find the corruption and you’re that certain about it, which is not always easy, but if you do it straight away after you awarded the contract. If you’re six months or a year into the contract, you simply may not have the ability to go back to the second contractor because they may no longer be interested or have the resources to undertake that contract.

I totally agree. I think in this point is you really need better communication between criminal law and procurement law, because as we see in Article 57, for instance, we always need a final judgement about criminal conviction of corruption, and we know, at least in Italy, this really takes a lot of time, providing a final criminal conviction of corruption. What should be done, as it’s done in the United States, it is just relying on an initial decision by the awarding authority that something has gone wrong, something has been corrupted within the award, and so not waiting for the criminal conviction but evaluating if the integrity of the awardee is questionable, this could be done even at the EU level according to Article 57. It provides that a tender may be excluded where its integrity is questionable. I think this could be done also once the contract is awarded, and if the integrity of the awardee is questionable, terminate the contract as it’s possible according to Article 73 of the same directive, and so letting the second economic operator scored get the award.

Again, that still depends on a very quick finding that the tender is questionable and the tender is subject to those problems.

Absolutely, and I think this is far more better than waiting for a criminal conviction. It’s always a the decision that the awarding authority should take timely and should take, of course, with hearings and notice and comments from the awardee. Well the other path is waiting until the contract is done, discovering after that the corruption has been made, and then giving relief to the second economic operator, and this is going not to promote integrity with public procurement, but it is going to be an economical and a financial loss to the awarding authority: also to give relief to the second economic operator. So the damage is doubled at the very end. You have paid a corrupted contractor and then later you have paid an honest contractor because he didn’t get the award that he had deserved, by the way.

Very well. I think we are up to the limit of our time. Thank you very much, Franco.

 Thank you very much, Pedro, it was really interesting and thank you for your time.