The future of procurement in the NHS - part 1

It’s fair to say that procurement in the NHS has had a turbulent few years since the pandemic.  

A lack of funding, staff shortages and caps on the number of contractors persist, causing challenges for NHS Trusts that want to take control of procurement.

We spoke to Richard Woodard, on assignment through Boston Hale with an NHS Trust, about how to embed best practice into public sector procurement. Richard has over ten years experience working in senior procurement roles in the private and public sectors.

Stakeholder Engagement

Richard’s first point is crucial. Achieving good procurement outcomes is all about building relationships with stakeholders. 

Creating a collaborative process, based on mutual trust, enables all parties to work together to achieve the end goal.

Sounds easy, right? Far from it.

Within the NHS, the stakeholders are usually busy clinicians who just want to know they have a steady supply of the things they need. Procurement is a tiny part of their job, and usually way down the priority list. 

Procurement teams, on the other hand, have very little insight into the products they are purchasing – they are not clinicians, they don’t know what’s good and what’s not. But, they are experienced professionals who understand the supply chain, can navigate the world of tendering, objectively analyse competing bids and negotiate contracts.

Richard says

You can’t presume that stakeholders know what we know as procurement professionals and must conduct the process with this in mind. Why would a doctor know the price of steel or the issues involved in getting equipment out of Germany?

Building trust

There are several things Richard does when starting a contract to build trust. It starts with honesty.

In the first meeting, I explain I don’t have a medical background, requirements will need to be explained in layman’s terms. I’ll do the same when talking about the procurement process. If you strip away jargon, the level of trust immediately increases.

He then asks lots of questions of the current users. Why are they using the current product? Is it fit for purpose? What are their issues and problems? How are products usually ordered? Is it an easy process? Will the requirement change in 12 months time?

Often, it’s possible to identify some easy, quick wins and build trust that way. It creates a great first impression for an interim, gaining momentum and good-will in the run up to working on bigger projects. 

And, the more stakeholder engagement he can generate, the better the result.

Innovation and future-proofing

Richard says:

The way to achieve the best outcomes is to go back to the requirement and redesign it, rather than default to ‘repeat purchase’, a process that can only be done in collaboration with the experts.

Instead of a rushed decision based on ‘gut feel’ or ‘we’ve always used this supplier’, Richard advocates taking the stakeholders on a journey through the procurement process. 

Innovation comes by talking to suppliers about the requirement, finding out what’s different and new to the market, how they can meet the stakeholders’ need. 

Can they demonstrate it? Can they explain it? Do they have case studies? How does their supply chain operate? What product development is planned?

By involving the stakeholders in this process, they can ask suppliers questions directly, properly consider the alternatives and weigh up the benefits. Procurement can look further ahead and future proof, rather than focusing on the ‘now’.  

Tendering and cost-savings

Objectivity is injected through the tender process. It’s tempting for stakeholders to think short term, a quick fix for an immediate problem. But tendering, although more time consuming, is a robust process enabling innovation for long term gain.

A good procurement process will remove the bias. It should all be about facts and figures. The point of a written tender process is that each question is scored. It’s totally objective.

Rightfully, public sector procurement spending is carefully scrutinised. Every penny of public money spent must be justified. The procurement of PPE during the pandemic has also put future purchasing under the spotlight.

Tendering is a regimented process that has to be done properly and meet set standards.  

Non-Compliant contracts

A less obvious but equally important consequence of building good stakeholder relationships in the public sector is that procurement can root out non-compliant work. 

All public bodies have to adhere to rules, including the ‘challenge rule’. Within a 10 day period after a contract has been awarded, it can be challenged by other suppliers, who can argue that a tender has been mis-scored, for example.

A successful challenge can end up costing a huge amount – work stops, the challenger could claim for losses, legal costs can spiral. And, the whole process must start again – adding more time, effort and costs into the process.

Non-compliant procurement is extremely risky, but it does exist! Anything that lives outside of the core procurement department and process can cause huge problems. 

An interim who is able to build good relationships will be able to mitigate that risk by bringing everything into line.

In summary, there are many benefits to employing good procurement practice within the NHS, including:

• Bringing stakeholders on a journey to innovate
• Ensuring value for money and cost savings
• Questioning and challenging deep set habits,
• Engaging well with suppliers on product developments
• Planning for the long term and mitigating risks
• Identifying and improving non-compliant procurement

This blog was written following a discussion with Richard Woodard – Interim Procurement Contractor currently working through Boston Hale, who has worked on multiple contracts within the NHS and in the private sector.

Our 2nd post covers how implementing contract management more widely in the NHS will lead to better outcomes, and how interim consultants can make a huge impact on NHS procurement departments looking to improve procurement practices, processes and strategies. Read it here.

To meet one of our interim procurement professionals, or talk about your wider procurement hiring project, talk to Marie O’Driscoll

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